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Fertility and per capita income are now positively associated across most high income OECD countries. Low fertility and a gender wage gap persist in Japan. This paper presents a model where endogenous increases in the price of child-care and gender equity in the allocation of capital play important roles in the effect of per capita income growth and rising female relative wages on fertility. Results indicate that a positive relationship between fertility and per capita income is not robust: overall fertility rises with female relative wages if child-care productivity is sufficiently high; female relative wages may not rise with per capita income if men work with increasing capital relative to women. [ABSTRACT FROM AUTHOR]

This paper analyses the effect of federalism on fertility and growth. In a model with human capital accumulation and endogenous fertility, two regimes of education finance are compared: central and local. I find that local education finance yields higher growth at the price of increased inequality. The effect of federalism on total and differential fertility rates depends on the elasticity of substitution between children and consumption. The paper also empirically examines the relationship between fertility rates and fiscal decentralisation on a panel of OECD countries and finds a weak negative effect of decentralisation on total and differential (poor minus rich) fertility. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between trust and economic growth. Taking panel data and using a fixed-effects estimation for a 41-country sample over the time period from 1980 to 2004 and with a total of 129 observations, the paper points out that economic growth is negatively related to an increase in trust. This negative finding is in contrast to most empirical findings using a cross-sectional design. The common knowledge which has governed the nature of discussions in social science and economics for the last ten years, that trust is generally positively related to economic performance, must be seriously questioned. From a policy point of view an increase in trust is crucial for countries with low levels of trust, but can likely be neglected by countries with sufficient levels of trust and may even hamper economic performance in countries with high levels of trust. The relationship is tested in the context of EU countries, OECD countries and developing countries. Interpersonal trust and systemic trust is differentiated. [ABSTRACT FROM AUTHOR]

The defence-growth nexus has been investigated by many studies and has always been a controversial area of research. By applying an Augmented Solow Growth Model integrated with a military burden variable, this paper examines the effect of military expenditure on economic growth for 21 OECD countries during the period 1960-2009. Different panel estimation methodologies are used to analyze the economic effects of military expenditure. The empirical results suggest that military expenditure would appear to have a negative effect on growth. [ABSTRACT FROM AUTHOR]

There is significant academic evidence that growth in one country has a positive impact on growth in neighbouring countries. This paper contributes to this literature by analysing the heterogeneous strength of growth spillovers across world regions and by investigating the contribution of transport and communication infrastructure to explain this heterogeneity and promote neighbourhood effects. By defining neighbourhood on the basis of membership of regional trade agreements, we focus on spillovers that work through regional integration and trade. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in sub-Saharan Africa (SSA). We further find strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional 'success stories' in SSA and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread - most importantly connective infrastructure such as transport and telecommunication links. [ABSTRACT FROM AUTHOR]

This paper examines the role of the banking sector in the overall economic activity and its contribution to the convergence/divergence in fifteen OECD countries over the time period of 1980–1997. We resort to a non-parametric technique (DEA) and estimate a world wide macro-economic as well as a worldwide banking frontier. We find a very similar pattern in the evolution of banking and macro-economic efficiency. We further study the evolution of the macro-economic and banking productivity and discover, in both cases, convergence over time. Our first finding is that the performance of the banking sector helps to explain the overall economic performance. Our second finding is that the financial orientation of each country constitutes a relevant feature for the last mentioned explanation. [ABSTRACT FROM AUTHOR]

This paper investigates the empirical relationships between military expenditure and unemployment rates. A set of global panel data on 46 countries is utilized, and a panel data version of the Granger causality test is applied. The results indicate that there is little evidence of the causality running from unemployment to military expenditure regardless of how we measure military spending and determine group countries. In contrast, the causality running from military expenditure to unemployment receives empirical support if military expenditure is measured in terms of its share of GDP and if data are taken from middle- and low-income countries or non-OECD countries. [ABSTRACT FROM AUTHOR]

To date, more than half of the output in the major OECD countries has been knowledge based. This paper argues, however, that the current growth-oriented exposition of the knowledge economy rooted in the conventional concept of free competition is insufficient for promoting the long-term development of human societies. Although we now live in a knowledge economy, most countries have been concurrently characterized by serious phenomena such as environmental degradation and growing economic inequality. The prospect of meeting global commitments, for instance, to reducing inequality, as outlined in the 1995 World Summit for Social Development in Copenhagen and endorsed in the United Nations Millennium Declaration, is bleak and the global society as a whole has become less and less sustainable. Indeed, the world is better seen as composed of numerous (but finite) knowledge economies. To take up the challenge of sustainable development of human societies, we have to develop a pluralistic perspective of the knowledge economy and fully acknowledge the characteristics of each unique knowledge system (such as indigenous knowledge possessed by a small tribe). Once we can help each individual knowledge system develop into a specific set of economic institutions that freely exchange concepts and beliefs with each other in a global environment, we will be able to develop a global economy that embodies a value-committed basis that assures a sustainable path of development on earth. [ABSTRACT FROM AUTHOR]

In this paper we show how moving from the neoclassical model to the more recent endogenous growth paradigm can lead to markedly different interpretations of the same growth accounting data. In neoclassical theory, even if between 30 and 70 per cent of the growth of output per worker in OECD countries can be 'accounted for' by capital accumulation, yet in the long run all of the growth in output per worker is caused by technological progress. Next, we develop a hybrid model in which capital accumulation takes place as in the neoclassical model, but productivity growth arises endogenously, as in the Schumpeterian model. The hybrid model is consistent with the empirical evidence on growth accounting, as is the neoclassical model. But the causal explanation that it provides for economic growth is quite different from that of the neoclassical model. [ABSTRACT FROM AUTHOR]

Growth accounting models consider technology as exogenous which are determined outside the model. Even though Solow type model measures the contribution of technology as residual which is left over from the contribution of labor and capital, it does not provide tool to directly assess the role of technology. Endogenous growth models emerged to overcome this shortcoming. In the recent decades, many empirical studies have explored the direct role of technological change in economic growth in the long-run. Researchers have used various variables to endogenously study factors affecting economic productivity. R&D spending is considered one of those factors. However, since it takes a longer time to see the impact of R&D spending, many developing countries do not truly appreciate its importance for economic growth. This paper is aimed to provide further evidence by exploring the relationship between total factor productivity (TFP), information and communication technology (ICT) capital services, R&D expenditures, and a set of auxiliary variables (labor quantity, labor quality, non-ICT capital services) using the Pooled Mean Group approach for OECD countries. The objective is to show if and to what extent TFP is sensitive to ICT and R&D over both long- and short-term periods by controlling for auxiliary determinants. The study has found a positive significant relationship between TFP and ICT capital services over the long-run, and between TFP and both ICT capital services and R&D expenditures over the short-run. It is also found that TFP positively responds to changes in all auxiliary determinants over the short-run. The impact of all variables on TFP is smaller for short-term than long-term. The study highlights the great importance of investing in R&D by developing countries to catch up with the developed countries. The findings are expected to encourage developing countries to invest more in R&D to accomplish long-term sustainable and competitive economic growth. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between fluctuations in economic growth, unemployment, and voting along a left-right axis. I estimate a model that explains how political fluctuations are caused by economic fluctuations in the OECD countries. I find that higher economic growth causes a shift to the left of policy sentiments. I hold the provision of social insurance by the welfare state to be the key to understanding this relationship. I also find that the relationship changes over the sample period. I hold the tax increase needed to finance the expansion of the welfare state to be the reason for this. [Copyright &y& Elsevier]

This note briefly addresses two questions related to growth performance in the OECD area, namely: 1) why have so few OECD countries seen an increase in productivity related to investment in Information and Communications Technology (ICT); 2) how does the environment for firm creation affect growth in OECD countries? The note points to some recent empirical work with firm-level data on these issues and suggests that further cross-country research with such data could be very helpful. [ABSTRACT FROM AUTHOR]

The relationships between growth, inequality, and poverty is widely discussed area in the development economics, which fairly overcrowded by linear and non-linear growth components, however, while developing an index for pro-poor growth, the non-linearity portion of growth has been widely ignored that address in this study by using a panel of 18 selected Latin America and the Caribbean countries from 1981 to 2012. The study proposed a new measure of pro-poor growth index, called ‘Poverty Interdependence Growth Index (PIGI)’, which further extended in order to satisfy the monotonicity criterion of pro-poor growth and poverty reduction, called ‘Poverty Interdependence Equivalent Growth Rate (PIEGR)’. The results show that the impact of per capita survey income and income inequality on poverty measures are ‘linear’ in nature when controlling the non-linear components of growth, however, if this assumption is relaxed, the study doesn’t established either ‘U-shaped’ and/or ‘asymptotic’ relationship between the variables. The non-poverty measures including educational expenditures, health expenditures and population growth significantly increases F-G-T measures of poverty. The estimates of PIGI and PIEGR reveal that out of 18 countries, there are 4 countries shows highly pro-poor growth, 11 countries shows negative pro-poor growth index (i.e., immiserizing growth scenarios, where a positive growth increases poverty), and the remaining 3 countries shows pro-rich. The study illustrates that our new measure of pro-poor growth index fairly provides conclusive findings. [ABSTRACT FROM AUTHOR]

DIW Berlin has examined the effects of investment in research and development on economic growth in Germany and other OECD countries. Their results show that an increase of one percentage point in research and development spending in the economy as a whole leads to a short-term average increase in GDP growth of approximately 0.05 to 0.15 percentage points. The coeficient for Germany is at the upper end of that range. The analysis shows, however, that it is dificult to separate the effect of aggregate R&D into contributions from private- and public sector R&D. R&D investment in both sectors has seen strong growth in Germany in recent years, particularly when compared internationally. For a country that owes its prosperity largely to its research-intensive manufacturing sector and to production-related, knowledge-intensive services, research and development remains key to future growth. It is therefore essential that Germany does not ease up on its efforts to increase R&D investment. [ABSTRACT FROM AUTHOR]

Economic growth depends on human resources and human needs. The demographic age structure shapes both of these factors. We study five-year data from the OECD countries 1950–1990 in the framework of an age structure augmented neoclassical growth model with gradual technical adjustment. The model performs well in both pooled and panel estimations. The growth patterns of GDP per worker (labor productivity) in the OECD countries are to a large extent explained by age structure changes. The 50–64 age group has a positive influence, and the group above 65 contributes negatively, while younger age groups have ambiguous effects. However, the mechanism behind these age effects is not yet resolved. [ABSTRACT FROM AUTHOR]

Economic history has contributed significantly to the formulation of economic theory. Among the economists who have found history an important source for their ideas are Adam Smith, Karl Marx, Alfred Marshall, etc. Failure to take account of history, has often led to a misunderstanding of current economic problems by investigators who have not realized that their generalizations rested upon transient circumstances. This article sketches a theory of the secular decline in morbidity and mortality that takes account of changes induced in physiological functioning since 1700. The synergism between technological and physiological improvements has produced a form of human evolution, biological though not genetic, rapid, culturally transmitted, and not necessarily stable, which is still ongoing in both OECD and developing countries. Thermodynamic and physiological aspects of economic growth are defined and their impact on growth rates is assessed. Implication of this theory for population forecasting, measurement of national income, demand for leisure, pension policies, and demand for health care are considered.

The apparent convergence of OECD income levels since 1950 is subjected to rigorous testing which suggests that there has occurred a systematic process of catching up in levels of total factor productivity. An econometric model of relative economic growth exhibits parameter stability over three decades, including the period after 1973, and statistical robustness, particularly with respect to sample selection. A reassessment is made of OECD comparative economic growth performance. [ABSTRACT FROM AUTHOR]