Endogenous Growth: A Knife Edge or the Razor's Edge?*

According to much of the recent growth literature, the dramatic worldwide decline in fertility currently taking place should ultimately lead to global economic stagnation. This pessimistic prediction is not shared by the original innovation‐based growth literature. In recent years, however, this strand of the literature has been criticized for resting on implausible knife‐edge assumptions and for its inconsistency with available evidence. In this paper, we argue that this conclusion is unwarranted.     

Measurement matters: understanding China’s growth rates

The recent decline in year-on-year (y/y) growth rate has sparked fear of a China ‘hard landing’. However, the literature found that y/y measures can be inadequate in catching cyclical turning points, especially when, as now in China, a short, sharp deceleration has occurred but bottomed out within the past 12 months. We regard three-month/three-month seasonally adjusted annualized growth rates (QSAA) as a better leading indicator for identifying patterns than y/y growth rates given that QSAA not only irons out very short-term volatility by taking a three-month moving average, it summarizes information from the previous six months (y/y indicators only exhibit the latest data point and information 12 months ago). Based on a sample of six important Chinese economic indicators, we find the new measure shows a different growth trajectory relative to that measured by the y/y growth rate. Thus, policy makers may find the new measures complementary to the widely used y/y growth rates in decision making.     

Population growth and savings rates: Some new cross‐country estimates

It is widely recognised that population growth can have two conflicting effects on savings. It reduces savings as it leads to more dependent children, but if balanced it can also increase savings by increasing the number entering the working part of the life cycle and hence the number of potential savers. However, this positive effect has largely been ignored in the empirical literature. Based on the population growth rate as its measure and an augmented cross‐country life cycle regression model evidence for its existence is confirmed. Confidence in the estimates is undermined by tests indicating that in many countries over the relevant period population growth was not in steady state balance. This is ameliorated by the high regression R²s and by comparable labour force growth rate estimates, but it was also found that the estimates could not be interpreted as evidence that countries with more rapid population growth rates actually save more. This is because the negative impact of larger families was found to outweigh any increase in savings because of more families. The net elasticity effect was calculated to be ??0.08. The paper concludes that savings continues to be a cost of rapid population growth, but perhaps not quite as debilitating as some might have presumed.     

Applying Intermediate Microeconomics to Terrorism

The authors show how microeconomic concepts and principles are applicable to the study of terrorism. The utility maximization model provides insights into both terrorist resource allocation choices and government counterterrorism efforts, and basic game theory helps characterize the strategic interdependencies among terrorists and governments.     

Political economy and the closet: heteronormativity in feminist economics

Abstract

Returning to a question raised by M. V. Lee Badgett in the first issue of Feminist Economics, this paper traces the persistence of heteronormativity in feminist economics to assumptions that kinship is organized around conjugal bonds. These assumptions let “the family” stand automatically for a husband, wife, and their children. “Heteronormativity” is not a synonym for heterosexual privilege, but rather names tacit conceptions about what is socially normal, conceptions that make it possible to think of heterosexuals or homosexuals as essential categories of people. Critique of heteronormativity makes visible a pattern of state repression that makes proper citizens by opposing them to improper ones, a process that simultaneously shapes gender, sexuality, citizenship, and race. Such critique opens the opportunity to better understand gender, integrate scholarship on lesbians and gays, link gender analysis more directly to racializing processes, and reopen the category of heterosexuality.