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The paper shows that income inequality may theoretically lead to higher economic growth if public consumption enters the utility function. Empirically, baseline estimations and a sensitivity analysis show that income inequality is positively, and most of the time significantly, associated with economic growth. These findings stand in sharp contrast to the negative association between inequality and growth propounded by Alesina and Rodrik and by Persson and Tabellini. [ABSTRACT FROM AUTHOR]

This paper studies the impact of the EU Structural Funds Program for the period 1989-93 on the growth paths of the major recipient countries, Greece, Ireland, and Portugal. It uses an endogenous growth model of private, public, and human capital accumulation in which the public sector and current account balances play a crucial role. Simulation results show that these programs had a substantial impact on economic growth in these economies and contributed markedly to their convergence to EU standards. Their relative long-run position, however, would still be far from EU standards, which suggests the importance of continuing the transfer program. [ABSTRACT FROM AUTHOR]

This paper identifies the major factors explaining GDP growth in a number of Southeast Asian countries during the 1980s and early 90s. Estimates of the contribution of technological change, increases in the endowments of labor and capital, movements in the terms of trade, and changes in domestic output prices are reported for Hong Kong, Japan, South Korea, the Philippines, and Thailand. Partial results for Indonesia and Malaysia are also shown. An index number approach is used; it has a tight theoretical foundation being based on the GNP/GDP function approach to modeling the production sector of an open economy. [ABSTRACT FROM AUTHOR]

This paper studies the relationship between infrastructure expenditure and endogenous growth generated by spontaneous evolution of division of labor. It identifies the necessary condition for infrastructure expenditure to take place and its equilibrium time path. Dynamic equilibrium shows that the optimal infrastructure expenditure, the size of the market network, and the level of division of labor increase concurrently. While infrastructure can promote the evolution of division of labor through reducing the unit transaction cost, the total transaction cost each consumer-producer incurs rises as the optimal income share of infrastructure expenditure increases with economic development. [ABSTRACT FROM AUTHOR]

Abstract: This study contributes to the aid‐effectiveness debate using panel data from 43 sub‐Saharan African countries over the period 1980–2013. Its novelty lies in assessing the intermediary role of institutions and the importance of recipient and donor heterogeneity. The long‐run growth effect of (aggregate) aid from “traditional” donors is robustly non‐positive, and the indirect effect is negative. Disaggregation reveals donor heterogeneity. Chinese aid outperforms aggregate aid from traditional donors with respect to growth; however, it has a negative institutional effect. Recipient heterogeneity is largely a short‐run phenomenon, with only a few countries showing some deviations from shared long‐run parameter sets. Comparing donor behavior suggests that the future of aid would benefit more from focusing on quality – particularly, specialization and donor alignment. [ABSTRACT FROM AUTHOR]

A stylized prediction of the development economics discourse is that informality will disappear with development, and yet in the last 20 years conventional measures of informality, far from declining, have either remained stagnant or have actually increased. This includes countries such as India where economic growth has been at historically high levels. What exactly is informality and what are its magnitudes and trends? What are the causes of informality and why is it not decreasing as predicted by standard theories of development? What are the consequences for inclusive economic growth of a large and increasing informal sector? What are feasible and desirable policy responses to informality? These are the questions that motivate this broad based overview of informality. The questions will be addressed based on recent and ongoing research on India and globally. [ABSTRACT FROM AUTHOR]

The general policy prescription for resource-rich countries is that, for sustainable consumption, a greater percentage of the windfall from resource rents should be channeled into accumulating foreign assets such as a sovereign public fund as done in Norway and other developed but resource-rich countries. This might not be a correct policy prescription for resource-rich sub-Saharan African (SSA) countries, where public capital is very low to support the needed economic growth. In such countries, rents from resources serve as an opportunity to scale-up the needed public capital. Using a panel data for the period 1990-2013, we find in line with the scaling-up hypothesis that resource rents significantly increases public investment in SSA and that this tends to depend on the quality of political institutions. Moreover, we also find evidence of a positive effect of public investment on economic growth, which also depends on the level of resource rents. [ABSTRACT FROM AUTHOR]

This study presents a novel theory on the interaction of social norms, fertility, education, and their joint impact on long-run economic development. The theory takes into account that sexual intercourse is utility enhancing and that the use of modern contraceptives potentially conflicts with prevailing social norms (religious beliefs). The theory motivates the existence of two steady states. At the traditional steady state, the economy stagnates, fertility is high, education is minimal, and the population sustains a norm according to which modern contraceptives are not used. At the modern steady state, the population has abandoned traditional beliefs, modern contraceptives are used, fertility is low and education and economic growth are high. Social dynamics explain why both equilibria are separated by a saddlepoint-equilibrium (a separatrix), i.e. why it is so hard to transit from the traditional regime to the modern regime. [ABSTRACT FROM AUTHOR]

Sub-Saharan Africa will be undergoing substantial demographic changes over the next 15 years with the rising working-age share of its population. The opportunity of African countries to convert these changes into demographic dividends for growth and poverty reduction will depend on several factors. The outlook will likely be good if African countries can continue the gains already made under better institutions and policies, particularly those affecting the productivity of labor, such as educational outcomes. If African countries can continue to build on the hard-won development gains, the demographic dividend could account for 11-15% of gross domestic product ( GDP) volume growth by 2030, while accounting for 40-60 million fewer poor in 2030. The gains can become more substantial with better educational outcomes that allow African countries to catch up to other developing countries. If the skill share of Africa's labor supply doubles because of improvements in educational attainment, from 25 to about 50% between 2011 and 2030, then the demographic dividends can expand the regional economy additionally by 22% by 2030 relative to the base case and reduce poverty by an additional 51 million people. [ABSTRACT FROM AUTHOR]

Different types of capital inflows have varied effects when predicting banking crises in emerging and developing economies, and these relationships have meaningfully changed over time. In a sample of 29 developing and emerging economies over the period 1976-1991 increases in short-term debt inflows raised the probability of a banking crisis while increases in inflows for long-term borrowing by the private sector had the opposite effect. Conversely, over the period 1992-2007 increases in inflows for long-term borrowing by the private sector and for equity investment both increased the probability of a banking crisis. The findings suggest distinct optimal capital account liberalization policies between the two periods. [ABSTRACT FROM AUTHOR]

We construct a political variable-the number of ministers of all national government departments born in each province weighted by provincial population-to examine its effect on economic growth in China during 1981-2010. We find that the lagged per capita political variable has a significant, positive effect on economic growth in both ordinary least squares ( OLS) estimation and system generalized method of moments ( GMM) estimation. We also find that the lagged per capita political variable has a significant, positive effect on financial deregulation policies distributed across provinces, which offers a possible mechanism for the political variable to impact growth. [ABSTRACT FROM AUTHOR]

A popular policy target in emerging markets is the real exchange rate as an undervalued real exchange rate is seen to enhance international competitiveness. Within an augmented Dornbusch model it is shown that the implicit tax of low remunerated reserve requirements represents an efficient tool to depreciate the real exchange rate. The model is empirically tested for a panel of Latin American, East Asian and Eastern European countries. Controlling for the impact of fiscal policies and direct capital controls, the reserve requirement tax significantly explains real exchange rate misalignments. [ABSTRACT FROM AUTHOR]

Given a series of crisis events after 2007 the discussion about the adjustment channels of current account imbalances has been revived. We examine the role of exchange rates vs macroeconomic policies as determinants of current accounts for a set of 86 mainly emerging market economies between 1990 and 2013 to identify adjustment channels for global imbalances. We find that nominal exchange rates are not the main determinant of current account positions. Instead, depending on the region, monetary and/or fiscal policies are identified as the main driving force of current accounts. For East Asia and the oil exporting countries sterilization policies, i.e. relatively tight monetary policies, are the main determinants. In contrast for many European periphery countries fiscal policy stances are at the core of current account positions. Only for the Latin American countries does the exchange rate play a significant role as determinant of current account positions. [ABSTRACT FROM AUTHOR]

Zimbabwe has been facing growth and external competitiveness challenges, as shown by declining shares in global exports, high current account deficits, external debt and a widening productivity gap with South Africa. Estimates of the real equilibrium exchange rate reveal periods of sizeable misalignment, both prior to 2008 and under the current multicurrency regime. Misalignment has an asymmetric impact on growth. While overvaluation hampers growth, we have not found robust evidence that undervaluation would raise it. Replacing the multicurrency regime anchored in the US dollar by the South African rand would help reduce overvaluation and stimulate exports and growth. Under any currency regime, Zimbabwe needs to implement sound macroeconomic policies and an environment conducive to investment. [ABSTRACT FROM AUTHOR]

From 1998 to 2012, the Peruvian economy exhibited rapid growth. Moreover, the composition of the labor force improved in terms of education and experience, two variables that are typically associated to higher human capital. The average worker in 2012 had a higher level of education and was one and a half years older than in 1998, reflecting the impact of the demographic transition. However, the average real wage was roughly constant. We show that a decline in the wage premium for education, and to a minor extent for experience, is responsible for the lack of growth in the average real wage. Had these two premia remained constant throughout the period of analysis, average labor earnings would have increased by about 2.6% per year, of which 0.7 percentage points are accounted for by the changes in the composition of the labor force in terms of age and education. We explore the role of the relative supply of workers with different levels of human capital as an explanation for the decline in the wage premium for education. Finally, we analyze the implications of these findings for some macroeconomic variables, as earnings and wage inequality, the labor share and total factor productivity. [ABSTRACT FROM AUTHOR]

The expansion of agroforestry crops in South Asia has resulted in the reallocation of local agricultural resources, including labor force. Based on two‐wave panel data collected from more than 600 smallholder rubber farmers in southwest China, this study examines the impacts of rubber expansion on the migration of rural labor. The results show that smallholders planting more rubber plantations have significantly fewer migrant family members and lower likelihood of migration, revealing a significantly negative effect of rubber cultivation on the migration of rural labor. Given that the migration of rural labor is a major trend in rural economic transformation, rubber farming appears to result in the resource curse in rubber planting areas. In addition, a positive interaction effect between rubber cultivation and the price of natural rubber on the migration of rural labor reveals that the resource curse effect of natural rubber decreases with the decrease in the price of natural rubber. A period with a relatively low price of natural rubber provides an opportunity to foster the migration of rural labor in rubber planting areas. [ABSTRACT FROM AUTHOR]

This study investigates the relationship between access to domestic and international communication and economic development. It does so by constructing two indices of linguistic distance, domestic and international, capturing language acquisition costs, which are higher when acquiring linguistically more distant languages. The domestic linguistic distance index captures the constraints of communication among speakers of different mother tongues within a country, while the international linguistic distance index captures the constraints of global communication via English. This study's results reveal a negative association between domestic linguistic distance and GDP per capita, whereas international linguistic distance has no significant association. Moreover, by investigating the mechanisms of the negative association of the domestic linguistic distance, we find that communication difficulty among different language groups hinders economic development through a channel of less employment requiring communication‐based operations. Furthermore, we determine that the negative association of the domestic linguistic distance may be mainly driven by relatively poor countries such as many in Africa. [ABSTRACT FROM AUTHOR]

This study examines the key drivers of the information and communication technology (ICT) sector's growth and the dynamics of its sectoral relationships in the Chinese economy, about which little is known, by using four updated and harmonized input–output tables for the period 2002–2017. The decomposition analysis shows that the ICT sector's growth was mainly driven by the expansion of export and domestic demand in the 2002–2007 period and by domestic demand expansion in the 2007–2012 and 2012–2017 periods. Furthermore, causative matrix analysis demonstrates that the ICT sector was consistently externalized throughout the study period, regardless of whether it received limited feedback from non‐ICT sectors' final demand in the 2002–2007 and 2012–2017 periods or substantial feedback in the 2007–2012 period. Finally, linkage analysis reveals that the ICT sector has had profound intersectoral linkages with both supply‐ and demand‐side effects in the economy. We conclude that the ICT sector has been the engine of economic growth in China and that stimulating its growth is a key tool for economic development. [ABSTRACT FROM AUTHOR]

Understanding economic growth has been a primary pursuit for generations of economists. Hidalgo and Hausmann (2009) (Proceedings of the National Academy of Sciences, 106, 10570–10575) charted new territory in this pursuit by using bipartite international trade networks to characterize the economic complexity of a country based on the capabilities implied by the products it exports. The resulting Economic Complexity Index (ECI) correlates strongly with income levels and predicts subsequent economic growth with some statistical precision. We propose an innovation‐adjusted ECI (i‐ECI) that uses a high‐resolution patent–trade concordance to construct trade networks weighted by domestic and international patent application flows. The i‐ECI thus reflects firms' decisions about where to seek patent protection on industry‐specific inventions, allows for heterogeneity in the relative importance of patenting across industries, and implicitly captures firms' perceived innovation potential in the recipient countries. Although the i‐ECI is highly correlated with the ECI (correlation coefficient greater than 92%), it is a stronger and more statistically precise predictor of economic growth than the unadjusted ECI. [ABSTRACT FROM AUTHOR]

Economy-wide and hydrological-crop models are combined to assess the economic impacts of historical climate variability and future anthropogenic climate change in Zambia. Accounting for uncertainty, results indicate that, on average, current variability reduces gross domestic product by 4% over a 10-year period and pulls 2% of the population below the poverty line. Socioeconomic impacts are much larger during major drought years, thus underscoring the importance of extreme weather events in determining climate damages. Climate change scenarios draw on projections for 2025. Results indicate that, in the worst case scenario, damages caused by climate change are half the size of those from current variability. The paper concludes that current climate variability, rather than climate change, will remain the more binding constraint on economic development in Zambia, at least over the next few decades. [ABSTRACT FROM AUTHOR]

Using data from 65 countries over the period 1980-2003, this paper investigates the role that cultural dimensions play in the process of technological change, innovation and adoption and consequently on the steady state level of output per worker and its growth, using spatial econometrics techniques to account for spatial dependence between countries. Initial findings indicate that differences across cultural dimensions act as a leveling effect but not as long run growth determinants. In addition, when controlling for physical and human capital accumulation, culture plays a much smaller role in explaining differences in income per capita than initially thought, with little effect on output per worker growth along the transitional dynamics path. Spatial econometric considerations are relevant in explaining differences across rates of growth of per worker output, but not in terms of steady-state levels of income. [ABSTRACT FROM AUTHOR]

Aspects related to the links between international migration, foreign aid and the welfare state are highlighted in this paper. Migration is modeled as a costly movement from an aid-recipient developing country with low income and no welfare state, towards a rich donor, developed country with a well-developed welfare state. Within this model, it is found, among other things, that the best response of the developed donor country is to increase aid as the co-financing rate by the recipient country increases. When the immigration cost decreases, e.g. as a result of greater economic integration between the two countries, it is beneficial for the donor country to increase aid and the recipient country to increase the co-financing rate. [ABSTRACT FROM AUTHOR]

This paper utilizes the instrumental variable threshold regressions approach to reassess the trade-development link. It finds evidence that trade openness contributes to uneven development. Greater trade openness tends to have beneficial effects on real development of high-income countries. For low-income ones, however, trade openness appears to influence real income in a significant and negative way. The data also reveal that greater trade openness has a positive effect on capital accumulation, productivity growth, and financial development in high-income countries, but a negative impact in low-income ones. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to examine how effectively the wholesale interest rates are transmitted to the retail rates and whether the interest rate passthrough is symmetric or asymmetric in Greece, Bulgaria, and Slovenia. The disaggregated general-to-specific methodology is applied for testing the symmetry hypothesis in these economies. It is evident from our results that variations exist across the countries examined regarding the monetary transmission process and the symmetry hypothesis alike. This can be interpreted as an indication of a different level of competition, development, and liberalization among the banking systems in these Southeastern European economies. [ABSTRACT FROM AUTHOR]

This paper explores the link between currency crises and the stock market in emerging economies. By integrating foreign stock market investors in a currency crisis model, we reveal a new fundamental inconsistency as a potential crisis trigger: since emerging economies' stock markets often have high returns, whereas central bank reserves grow slowly or decline, the amount of reserves foreign investors can deplete when selling their stocks and repatriating the proceeds grows over time and is considerably higher than funds that have been invested in the stock market. Capital withdrawals of foreign stock market investors can trigger currency crises by depleting central bank reserves, particularly in successful countries with booming stock markets and large foreign investment. [ABSTRACT FROM AUTHOR]

This paper examines and resolves a puzzling issue associated with less developed country (LDC) export compositions. Since the newly industrialized country (NIC) takeoff during the early 1970s, LDC exports have involved an increasingly broader and diversified export base. Yet trade theories, both 'old' that focus on classic comparative advantage, and 'new' which rely on scale economies, lead to expectations of growing specialization as a concomitant of LDC takeoff. This study examines periods of rapid growth and structural transformation of trade for a representative group of LDCs covering a wide geographic and temporal sample. [ABSTRACT FROM AUTHOR]

This paper analyzes the dynamic pattern of Japanese manufacturing foreign direct investment (FDI) in Asia. Japanese electronics firms shifted manufacturing operations abroad in the 1990s. We focus on the timing of the surge in FDI: why in this period did Japanese electronics firms increase manufacturing FDI in Asia? The empirical findings indicate that, in addition to productivity improvements, learning experiences from FDI were the primary determinants of the FDI wave. Firms' own past FDI experiences, the experiences of other firms (spillovers), and the presence of own distribution services encourage manufacturing FDI. [ABSTRACT FROM AUTHOR]

This paper focuses on the dimensions shaping the dynamics of technology. We present a model where the knowledge stock of a country grows over time as a function of three main factors: innovation intensity, technological infrastructures, and human capital. The latter two variables determine the absorptive capacity of a country as well as its innovative ability. We then carry out an empirical analysis that investigates the dynamics of technology in a large sample of economies in the last two-decade period, and studies its relationships with income per capita growth. The results indicate that the cross-country distributions of technological infrastructures and human capital have experienced a process of convergence, whereas the innovative intensity is characterized by increasing polarization between rich and poor economies. Thus, while the conditions for catching up have generally improved, the increasing innovation gap represents a major factor behind the observed differences in income per capita. [ABSTRACT FROM AUTHOR]

Many studies suggest the positive causal effects of trade on productivity and growth. However, controversies are still prevalent among vast empirical studies on the issue. In this paper, I propose a standard empirical framework for investigating GDP growth and apply the framework to estimate the growth effects and transmission channels of per capita trade. Based on prior information, theoretical reasoning, and various empirical evidences, I conclude that international trade has positive independent effects on economic performance. A 1% increase in per capita trade raises the equilibrium GDP growth by 0.29%. [ABSTRACT FROM AUTHOR]

This paper analyzes the evolution of urban output per capita across Chinese cities in post-reform era. Our results suggest no evidence of output convergence across cities from 1984 to 2003. We find that cities with comparable output per capita are likely to be located in the same region; furthermore, cities tend to mirror the mobility of their counterparts located in the same province, but not the same region. The divergence in urban output per capita across the nation will continue if the current economic growth pattern persists in the future. [ABSTRACT FROM AUTHOR]

This paper constructs a two-country (Home and Foreign) general-equilibrium model of Schumpeterian growth without scale effects. The scale effects property is removed by introducing a distinct specification in the knowledge production function which generates semi-endogenous growth. In this model of semi-endogenous growth, an increase in the rate of population growth rate raises Home's relative wage and lowers its range of goods exported to Foreign. An increase in the size of innovations increases Home's relative wage but with an ambiguous effect on its comparative advantage. The model generates a unique steady-state equilibrium in which there is complete specialization in both goods and R&D production within each country. [ABSTRACT FROM AUTHOR]

One “stylized fact” about trade policy is that trade taxes as a proportion of total tax revenue are inversely related to a country's economic development, as in countries with poor administrative capabilities trade taxes represent the easiest way for governments to raise revenue (Administrative Capabilities Hypothesis). In this paper we develop an alternative explanation based on political economy considerations: using data from 64 developing countries from 1982 until 1997 we find that the Administrative Capabilities Hypothesis must be complemented with a political economy explanation in order to be able to provide a better account of the relevant empirical evidence. [ABSTRACT FROM AUTHOR]

This is an introduction to the Special Issue. The author provides the background to the development aid arena—to which there clearly exists a pressing need to evaluate progress to date—and introduces and links together the papers that constitute the Special Issue. [ABSTRACT FROM AUTHOR]

The author applies the theory of the soft budget constraint to explain some stylized facts regarding the outcomes and practice of international aid, including ineffectiveness, white elephants, and volatility. The soft budget constraint can also make aid counterproductive. Nonetheless, actual aid institutions may be constrained optimal responses to soft budgets and commonly suggested reforms such as improved donor coordination in aid, focus on fewer countries and projects, and less volatility of aid may lower the effectiveness of aid. The soft budget is also consistent with conservative project selection and the recent focus on “ownership.” [ABSTRACT FROM AUTHOR]

Within a theoretical framework, the author analyzes the effects that both workers' remittances and financial intermediation have on economic growth. It is found, among other things, that remittances can have significant positive long-run effects on growth. The author confronts the implications of the theoretical model proposed with panel data for countries in Latin America and the Caribbean. After considering the effect of long-run investment and demographic variables, and controlling for fixed time and country effects, the empirical analysis indicates that financial intermediation tends to increase the responsiveness of growth to remittances. The overall conclusion is that making financial services more generally available should lead to even better use of remittances, thus boosting growth in these countries. [ABSTRACT FROM AUTHOR]

Recent empirical studies reveal that effectiveness of aid on growth is ambiguous. The authors consider aid proliferation—excess aid investment relative to recurrent cost—as a potential cause that undermines aid effectiveness, because aid projects can only produce sustainable benefits when sufficient recurrent costs are disbursed. They consider the donor's budget support as a device to supplement the shortage of the recipient's recurrent cost and to alleviate the misallocation of inputs. However, when donors have self-interested preferences for the success of their own projects over those conducted by others, they provide insufficient budget support relative to aid, which results in aid proliferation. Moreover, aid proliferation is shown to be worsened by the presence of more donors. [ABSTRACT FROM AUTHOR]

Recent developments in economic integration show rather diverse patterns of integration in the world economy. Some countries remain predominantly in the low-tech industries whereas other countries succeed in becoming competitive in high-tech industries as well. The authors postulate that a country positioning itself at the lower end of the spectrum of high-tech industries is more favorable to its long-term development than aiming at the upper end of low-tech industries. They argue that countries which specialize in the lower end of the medium–high-tech activities are rewarded by faster productivity increases also in the upper end of the high-tech industries. In contrast, early specialization in medium–low-tech branches yields positive spillovers, mainly in the low-tech sector, which is not conducive to increasing activity in high-tech industries. The authors sketch a theoretical outline of this idea and present econometric results, including four aggregate manufacturing branches across 37 countries. [ABSTRACT FROM AUTHOR]

The authors use a new cross-country dataset to estimate the strength of the links between different dimensions of social and economic development, including indicators of health, fertility, and education, as well as material wellbeing. This differs from previous studies in employing data for different income groups in each country in order to provide direct evidence on factors driving inequality, and in using a unique measure of material wellbeing that does not rely on PPP comparisons. [ABSTRACT FROM AUTHOR]

The authors attempt to highlight the effects of the recent surge of FDI in the enlargement states on domestic investment and growth. A similar analysis is carried out for the EU-15 in order to ascertain whether this type of capital inflow has a differential impact in these two regions of the European Union. Empirical analysis, based on dynamic panel data models, suggests the existence of a positive contribution of FDI to greater domestic investment and economic growth in the new member states. The evidence obtained for the EU-15 old member countries confirms the FDI-growth nexus but does not suggest a positive impact of FDI on domestic investment, which would be consistent with these capital inflows being of a different nature for these more advanced economies. [ABSTRACT FROM AUTHOR]

We analyze gender bias in school enrollment by developing a two-period model where women become part of extended families of their in-laws. Each family decides how many sons and daughters are sent to school and thus become skilled. Gender bias occurs due to failure of the families to internalize inter-household externalities. “Groom-specific” dowry worsens the situation. Under “bride-specific” dowry, bias exists if and only if the skill premium in the labor market is bigger than that in the marriage market. A specific discriminatory “food-for-education” policy is shown to reduce bias, but increase total enrollment. [ABSTRACT FROM AUTHOR]

The study uses aggregate and manufacturing sector data for a group of ten OECD countries for the period 1971 to 1995 to estimate a system of two equations implied by a model of R&D-induced growth in steady state. These equations relate R&D intensity to productivity growth and the latter to output growth. The author finds evidence of a positive impact of aggregate R&D intensity on the growth rates of productivity and output. The null hypothesis that growth is not induced by R&D is rejected in favor of the Schumpeterian endogenous growth framework without scale effects. The R&D impact for the aggregate economy is distinctly larger than for the manufacturing sector. Finally, an extension of the empirical model shows that openness has a positive impact on productivity growth. [ABSTRACT FROM AUTHOR]

Abstract The author studies East Asian economic performance relative to the experience of a sample of rich, industrialized countries. On combining the coefficients from an augmented Solow model of growth for a sample of industrialized countries with the actual levels of factor accumulation in East Asia, no evidence is found that the region as a whole is over-achieving. Only Hong Kong and Taiwan can be characterized as over-achievers. Further, Indonesia and Thailand (when income growth is measured in per-worker terms) are actually significant under-achievers, growing slower than forecasted growth in every period. [ABSTRACT FROM AUTHOR]

The authors analyze an endogenous growth model with economy–wide increasing returns, in which a public input is essential for private production. Within such a framework, it is shown that a continuum of equilibria and global indeterminacy can arise for reasonable parameter values, simply due to the presence of endogenous public policy. This can potentially account for “leapfrogging” or retroceding growth experiences. It is demonstrated how fiscal policy can serve as a selection device among different convergent paths. [ABSTRACT FROM AUTHOR]

Proposes a formal framework to assess the plausibility of a development strategy which is centrally based on an initial, successful transformation of agriculture as a springboard for a developing country's efforts toward industrialization. Structural change in the economy as a result of technological advances in agriculture; Longer-run prospect of economic growth.

Individuals engaged in rent seeking accumulate sector-specific human capital through learning-by-doing. If agents specialize, small reforms of the trade regime may fail to reduce the level of the rent-seeking activity. The size of the reform necessary to induce movement out of rent seeking is increasing in the time that controls have been in place. If rent seeking and production are complementary activities, agents will not specialize in either, and will fully respond to a small reform of the trade regime. This is true even though they accumulate human capital specific to rent seeking. [ABSTRACT FROM AUTHOR]

This study aims to assess whether counter‐cyclical fiscal policy to release infrastructure bottlenecks achieved the goal of "Beyond Keynesianism," that is, to stimulate long‐term economic growth. The proactive fiscal policy during the Asian financial crisis dramatically expanded the National Highway System in China. Taking the highway project as an example, we evaluate its impact on per capita output and employment growth and investigate the underlying mechanism. Using provincial panel data from 1995 to 2016, our system generalized method of moments estimation finds that this large‐scale high‐rank road infrastructure project leads to an increase in per capita GDP growth. Automobile‐intensive industries benefit most from it. A channel analysis indicates that the growth effect is driven by structural transformation. Further, the project increases overall employment, mainly in secondary industries. It also creates extra demand for road transportation and longer‐distance road freight transport by facilitating the flow of both commodities and passengers. [ABSTRACT FROM AUTHOR]

A model is proposed with the following features: (1) there is a publicly accessible transport technology, which is more advanced when there is more specialized labor in it; (2) a high population density facilitates the development of the transport technology; (3) an improved transport technology facilitates a finer division of labor, which in turn increases per capita income. These features are compatible with the phenomena of economic development described by Boserup in 1981. It is also shown that, provided the infrastructure sector can charge the users, and individuals are free to choose jobs, the competitive equilibrium will be Pareto-optimal. [ABSTRACT FROM AUTHOR]

The focus of this study is twofold. First, inclusive growth is measure by setting up five distinct criteria for inclusive growth in relation to productive employment. Second, the growth experience of five countries is evaluated against these criteria using standardized household data assembled by the World Bank. The results support the notion that the experience of each country is highly unique, as all the five countries exhibit different results. The multidimensional method allows the identification of the most critical aspects of the growth process of a specific country. [ABSTRACT FROM AUTHOR]

The Frankel, Romer and Lucas theories of endogenous growth rest on the assumptions of knowledge-based externalities and price-taking representative agents. It is argued that, in a context of long-run growth, these assumptions are mutually incompatible, that representative agents will cooperate to internalize the externalities and will cease to be price takers, and that, therefore, the relevance of theories based on those assumptions must be questioned. [ABSTRACT FROM AUTHOR]