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This paper examines the trajectory of global income inequality since 1981. Commonly used (relative) definitions indicate a decline in global inequality since the late 1980s. Looking ahead, it has been intuited that the influence of China's economic development—and that of other rapidly growing, populous nations—on the between-country component will, at some juncture, diminish and start to add to global inequality should economic growth persist. Our paper formalizes the turning point of global inequality through a simple model. For illustrative purposes, we empirically present the implications for the timing of the turning point in the context of a weaker post-pandemic growth recovery versus a stronger, albeit improbable, post-pandemic growth recovery. We conclude by arguing that the era of declining global income inequality is likely over, considering the forces influencing both the between-country and within-country components. [ABSTRACT FROM AUTHOR]

We build an endogenous growth model featuring a new mode of human capital accumulation in a data economy. Data are generated as the byproducts of economic activities and then used by consumers for human capital accumulation apart from education. Although we find similar growth patterns compared with those in the related literature, economic growth is further accelerated by the new use of data factor. Quantitative analyses suggest that although the accumulation of human capital is promoted by the increasing importance of data, this promotion is not unlimited since data may over-absorb resources and crowd out education. In the transition dynamics, we see that consumers suffer temporary welfare loss. However, as data become a key factor in human capital accumulation, welfare ultimately increases. Our paper provides a first view of the effect of the data factor in the process of human capital accumulation. • Digital economy promotes economic growth through human capital accumulation. • A model is built to incorporate data into human capital accumulation. • The promotion effect of data on human capital accumulation is not unlimited. • In transition dynamics, consumers may face temporary welfare loss. [ABSTRACT FROM AUTHOR]

In this paper, we develop a three-period gender-based Overlapping Generations (OLG) model of economic growth for Côte d'Ivoire in which life expectancy is endogenized and the rate of change of the poverty rate is linked to the growth rate of output per capita. We then calibrate the model using the country-specific calibration data to illustrate the role of public policies in the model, and its implications for long-term growth, gender equality, and poverty in Côte d'Ivoire. To this end, we discuss three sets of quantitative experiments: broad-based development policies (increase in education spending and infrastructure investment, and governance reform), gender-based policies (reduction in gender bias in the market place, increase in women's bargaining power, and reduction in family bias against girls' education), and a composite reform program (combination of pro-growth, pro-gender policies). Overall, our findings suggest that Côte d'Ivoire could achieve better growth and poverty outcomes if the country could implement a composite reform program that includes comprehensive development and gender-based policies. [ABSTRACT FROM AUTHOR]

• This paper tests whether personal income inequality can be considered exogenous to subsequent economic growth in Brazil. • Using a massive spatial dataset for all the 5564 Brazilian cities observed in 1991, 2000, and 2010, data reject the assumption of exogenous income inequality regarding subsequent growth. • The employed instrumental variable estimators identify causal effects from inequality to growth on average and conditional quantiles. • A decrease by 1 Gini point is associated with an increase in a cumulative economic growth of 2.5 percentage points in the following ten years. • Neglecting the endogeneity of income inequality to economic growth can lead to wrong conclusions. This paper estimates the impacts of personal income inequality on subsequent growth in a massive spatial dataset for 5564 Brazilian cities observed in 1991, 2000, and 2010 using instrumental variables methods. Based on Brazilian cities' data, the Wu-Hausman test rejects inequality exogeneity regarding growth. Instead of assuming exogenous inequality, we relax this assumption and let the data speak for themselves. Our methods identify causal effects between inequality and subsequent growth in conditional quantiles beyond the average. On average, the magnitude of the estimate implies that lowering personal income inequality by 1 Gini point would translate to an increase in a cumulative economic growth of 2.5 percentage points in the following ten years. Our findings call attention to the risk of following Litschig and Lombardi [ J. Economic Growth , 2019, vol. 24, pp. 155–187] when studying the influence of inequality on growth, neglecting the endogeneity of the former to the latter. [ABSTRACT FROM AUTHOR]

• Impacts of export quality on economic progress are examined. • The role of economic complexity for economic growth is investigated. • 28 OECD country's data is utilized from 1990 to 2019. • Export quality and economic complexity induce sustainable growth. • Institutional quality is a significant determinant for economic growth. It is important to unearth the role of structural change factors for sustainable growth in developed economies. Economic complexity, export product quality, and institutional indicators represent the overall structural change and transformation in an economy. This paper probed the influence of export product quality and economics of complexity on economic growth for 28 OECD (Organization for Economic Co-operation and Development) countries using the data from 1990 to 2019. In doing so, the study employs three-panel data econometric models to investigate the role of economic complexity, export quality, and institutional quality on economic development. The paper performs the empirical tests, including the cross-sectional related dependency methods and cointegration techniques. As per the results emerging from fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimation, export quality and financial development positively and significantly strongly impact growth in the long run. The empirical conclusions report detailed discussion on sustainable growth and discuss novel implications concerning product quality and institutional performance. The conclusions stress the practical implications for sustainable economic growth of OECD economies. [ABSTRACT FROM AUTHOR]

A long tradition in economic theory has seen the real exchange rate (RER) as a key determinant of trade performance. Several empirical studies, however, have found low estimates of macro trade elasticities and, as a result, questioned this argument. In this paper, we show that to understand and estimate the effect of RER on trade performance, it is crucial to explore the existence of heterogeneous responses of individual products to RER movements. Using trade data from Argentina, we employ the Mean Group method to estimate macro trade elasticities by individual products disaggregated at four digits of the SITC; rev.2. We find a wide range of heterogeneous responses of exports and imports to RER movements at the individual product level. We find that the estimated RER-elasticities in differentiated products and labor-intensive manufacturing goods are substantially larger than those of primary and homogeneous products. Based on the estimated elasticities at the product level, we obtain a "low" aggregate RER-elasticity of exports when we weigh them by the country's trade basket. We show that this result is a consequence of Argentina's economic structure, a country whose exports are heavily specialized in primary and homogeneous products. Our results are important because they help build a bridge between two conflicting views in the RER-economic development literature. Even in countries with "low" aggregate macro RER-elasticities, the real exchange rate may be an important variable for economic performance. An undervalued RER may facilitate economic growth by stimulating investment in activities producing more complex/differentiated goods in countries that specialize in the production of primary and homogeneous goods and, as a result, have "low" trade elasticities. This seems to be the case of several countries in Latin America, including Argentina. • We find a wide range of heterogeneous responses of exports and imports to RER movements at the individual product level. • The estimated RER-elasticities in differentiated products and labor-intensive manufacturing goods are substantially larger than those of primary and homogeneous products. • Based on the estimated elasticities at the product level, we obtain a "low" aggregate RER-elasticity of exports when we weigh them by the country's trade basket. • We show that this result is a consequence of Argentina's economic structure, a country whose exports are heavily specialized in primary and homogeneous products. • Our results are important because they help build a bridge between two conflicting views in the RER-economic development literature. Even in countries with "low" aggregate macro RER-elasticities, the real exchange rate may be an important variable for economic performance. [ABSTRACT FROM AUTHOR]

• The paper investigates the effects of agricultural exports on agricultural growth and overall growth in ECOWAS countries. • The instrumental variables approach is applied to control the cross-sectional dependence and endogeneity issues. • Findings indicate that the agricultural export-led agricultural growth hypothesis is verified. • We show that agricultural export increases the overall economic growth while the combined effect of the agricultural export and agricultural growth does not affect overall growth. • To increase foreign exchange earnings and avoid vulnerability to external shocks, ECOWAS' policymakers should pursue the implementation of outward-looking strategies, and agricultural export promotion and adopt market diversification policies. Given the urgent need to increase farming income and foreign exchange earnings, a substantial expansion of agricultural production for export is often a rational policy in developing countries, including the Economic Community of West African States (ECOWAS). The study analyzes the effects of agricultural exports on agricultural growth and overall economic growth in the ECOWAS region for the period 1996–2018. It also explores the combined effect of agricultural exports and agricultural growth on economic growth. We use the instrumental variables approach to control the endogeneity issue. Findings indicate that agricultural exports significantly enhance agricultural growth and overall economic growth. Moreover, the effect differs considerably from the agricultural growth equation to the economic growth equation. We also find that there is no complementarity nor substitutability effect of agricultural exports and agricultural growth on economic growth. These findings have important policy implications in agricultural development policy design and implementation in ECOWAS countries. [ABSTRACT FROM AUTHOR]

• Different dimensions of wellbeing present heterogeneous trends, encouraging to resort to a multidimensional index for an inclusive overview on Chinese development based on household microdata. • Between 2011 and 2015 the average level of multidimensional wellbeing stagnated. Although a slight decrease in well-being is nominally recorded, the overall trend is stable when controlling for other phenomenon (such as the ageing of the sample). • Individual characteristics (such as age and gender) and residence matter in terms of multidimensional wellbeing. As expected, wellbeing decreases in old age following a non-linear trend, and women record lower outcomes too. Inhabitants of coastal provinces and urban citizens (provided they possess an urban hukou) have higher than average scores. The impact of these characteristics is not homogeneous across the distribution of wellbeing. • Heilongjiang province, an emblematic case of economic stagnation in the north-east, reports a significantly worsening well-being trend, significantly different from the remaining "pooled" data. On the contrary, the catching-up Guizhou province records faster growth in the multidimensional wellbeing index. After many years of outstanding GDP growth and structural changes, China is now facing an economic slowdown. This paper aims to analyse the effects of this slowdown on individual well-being, from a multidimensional and provincial perspective. The empirical analysis is based on data obtained from the China Health and Nutrition Survey, for the 2011 and 2015 waves. The notions of moderate prosperity, harmony and balanced growth pursued by the Chinese Government are used to select nine dimensions. These dimensions – based on 56 variables – are aggregated into an individual well-being index using the Multidimensional Synthesis of Indicators technique. The econometric results reveal that, in the 2011–2015 period, individual multidimensional well-being stagnated; moreover, some dimensions were affected much more than others, according to individual characteristics (e.g. age, gender) and geographical differences (e.g. urban/rural, east/west provinces). This creates new challenges for the central and provincial governments of China, in their pursuit of a more 'harmonious' and balanced development. [ABSTRACT FROM AUTHOR]

• China implemented the heavy industry priority development strategy rather than the comparative advantage development strategy in the early years of new China. • A dynamic optimization model including the labor-intensive goods sector, the capital-intensive goods sector, and the final goods sector is constructed to study the rationality of the heavy industry priority development strategy. • The relationship between the total social output per capita and the share of heavy industry capital stock is inverted U-shape. • Heavy industry, as basic industry, provides the necessary material conditions for the subsequent comparative advantage development strategy. Based on the objective fact that new China had a weak industrial base during the planned economy period and the policies implemented, this paper constructs a dynamic optimization model that includes the labor-intensive goods sector, the capital-intensive goods sector, and the final goods sector. The basic conclusion of the theoretical model is that there is an inverted-U relationship between total social output per capita and the share of heavy industry capital stock on the optimal dynamic path of capital accumulation with government intervention, i.e., the relationship is positive until a specific threshold is reached, beyond which it becomes negative. The results of the benchmark regressions and endogeneity tests confirm the inverted-U relationship, although the threshold share of heavy industry capital stock differs among the empirical models. [ABSTRACT FROM AUTHOR]

• Export structure is less diversified in low-income countries (LICs) and small states. • We explore the linkages between export structure and economic growth/volatility in LICs and small states. • Export diversification can produce economic gains through two distinct channels, diversification in export products and in export partners. • The analysis finds that export diversification can promote economic growth and reduce economic volatility in LICs and small states. • It further documents that the economic benefits of export diversification are larger for relatively small and poor countries within a group of LICs. Export structure is less diversified in low-income countries (LICs) and small states that generally face constraints in resources and economic size. This paper presents an empirical analysis on the linkages between export structure and economic growth/volatility in LICs and small states, by using a variant of export concentration indices. The analysis documents that export diversification in products or industries may promote economic growth and reduce economic volatility in these countries. The analysis further demonstrates that the economic benefits of export diversification differ by the country size and income level—larger gains for relatively small and poor countries within a group of LICs and small states. In addition, diversification in export partners or markets tends to be beneficial for economic growth and stability. [ABSTRACT FROM AUTHOR]

• Market services have proved to behave as a key sector in fuelling economic growth in developing regions. • Distributive trade and business services show strong increasing returns of scale. • Business services are particularly relevant for output and productivity increases. The paper analyses the contribution of services vis-à-vis manufacturing as a driving force of economic growth in developing regions. In doing so, we test Kaldor´s first and second growth laws for different service categories, providing a comparative view across Asia, Latin America, and Africa. The work focuses attention on the importance of sector-level disaggregation in exploring the relationship between productivity and economic growth. Hence, it accounts for services sector heterogeneity to help to disentangle those specific branches that may fuel economic growth in the different regions. Panel data estimations are performed for a sample of 32 countries during 1970–2010. Our findings support the key role of manufacturing for growth. However, they also emphasise how market services (particularly, business service activities) may also enhance productivity and output growth 'à la Kaldor'. The research supports recent claims for modernising industrial policy in a way that promotes but is not limited to manufacturing. [ABSTRACT FROM AUTHOR]

• This study presents a two-sector Kalecki–Kaldor growth model. • It analyses the interactions of income distribution, technical change, and demand. • Short-run steady state is Kaleckian: wage-, profit-led, and hybrid demand regimes. • Long-run economic growth mechanism is Kaldorian, featuring technical change. • Wage and productivity growth rates between the two sectors differ in the long run. This paper presents a two-sector Kalecki–Kaldor model of income distribution, technical change, and economic growth. The model is Kaleckian in the sense that it incorporates mark-up pricing, investment independent of saving, and excess capacity. It is also Kaldorian, in that labour productivity growth is led by Kaldor's technical progress function. In other words, productivity growth is endogenously realised through the technology embodied in new capital stock, which differentiates our model from previous two-sector models. Our extension drastically changes the standard Kaleckian implications. We find that although the economic activity levels in the short run are led by the demand and income distribution parameters, economic growth in the long run is realised by supply-side (i.e. technical change and the associated productivity and wage growth) parameters. The important implication of our findings is that a two-sector economy faces a trade-off between a high economic growth rate and the local stability of the steady state. [ABSTRACT FROM AUTHOR]