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This paper explores the impact of the political hierarchies of cities in China from different perspectives. First, we examine the economic disparities between prefectural cities and municipalities. Furthermore, this paper draws upon a quasi‐ experiment to analyze the impact of upgrading Chongqing to a municipality in 1997 using the synthetic control method. The city‐upgrading policy significantly increased Chongqing's gross domestic product (GDP) in the following 4 years. Finally, we find that the policy increased GDP in treated cities within 1200 km of Chongqing by about 10%–13% relative to the control cities. [ABSTRACT FROM AUTHOR]

In this paper, we reassess the impact of inequality on growth. The majority of previous papers have employed (system) GMM estimation. However, recent simulation studies indicate that the problems of GMM when using non‐stationary data such as GDP have been grossly underestimated in applied research. Concerning predetermined regressors such as inequality, GMM is outperformed by a simple least‐squares dummy variable estimator. Additionally, new data have recently become available that not only double the sample size compared to most previous studies, but also address the substantial measurement issues that have plagued past research. Using these new data and an LSDV estimator, we provide an analysis that both accounts for the conditions where inequality is beneficial or detrimental to growth and distinguishes between market‐driven inequality and redistribution. We show that there are situations where market inequality affects growth positively while redistribution is simultaneously beneficial. [ABSTRACT FROM AUTHOR]

China joined the Paris Agreement, and the global 2°C and 1.5°C warming targets will be supported by China. In order to achieve these targets, China's CO2 emissions need to be cut deeply by 2050. The present paper presents studies from the integrated policy assessment model for China (IPAC) team about the impact on China's economic development of deep cuts in greenhouse gas (GHG) emissions, in order to realize the Paris climate change targets. With the requirement of deep cuts in GHG emissions in China, China's economic development will also be impacted in moving toward a low‐carbon or zero‐carbon emission‐based economy by 2050. This means the Chinese economy needs a strong transition over the next three decades, a relatively short time. All sectors in the economy need to seek ways to reduce GHG emissions, and this could change activities, industry processes and technologies in order to make the deep cuts in GHG emissions happen. This is the meaning of the economic transition toward to a low‐carbon economy. The findings of the present paper include: a significant transition in the energy supply sector; a high rate of electrification in all end‐use sectors; and a technology transition in the transport sector. Transitions will also occur in the traditional industrial sectors, including steel making, cement manufacture, and the chemical sector. The availability of low‐cost renewable energy could change the allocation of industries, which could potentially have a strong impact on regional economic development. Deep cuts in CO2 emissions in China need not be a burden for economic development, as the IPAC results show there will be a more than 1.5% increase of gross domestic product by 2050 in the deep cut scenario compared with the baseline scenario. [ABSTRACT FROM AUTHOR]

This paper examines the importance of good institutions in harnessing the growth effects of the bulging economically active population in sub‐Saharan Africa (SSA). The paper utilizes a panel dataset comprising 39 countries over the period 2002–13. Based on the system generalized method of moments estimator, this paper finds that an increase in the relative size of the working‐age population has no direct significant impact on growth, except through the presence of strong and high‐quality institutions. The paper also finds that control of corruption, rule of law and political stability are the specific aspects of institutions that matter the most in reaping the dividend. These results do not only highlight the primacy of strong institutions but also shed light on the key institutional pillars that need to be strengthened to rake in the positive effects of an increasing working age population on economic growth in SSA. [ABSTRACT FROM AUTHOR]

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Argentina is the only country in the world that was developed in 1900 and developing in 2000. Although there is widespread consensus on the occurrence and uniqueness of this decline, an intense debate remains on its timing and underlying causes. This paper provides a first systematic investigation of the timing of the Argentine debacle. It uses an array of econometric tests for structural breaks and a range of GDP growth series covering 1886–2003. The main conclusion is the dating of two key structural breaks (in 1918 and 1948), which we argue support explanations for the debacle that highlight the slowdown of domestic financial development and trade protectionism (after 1918) and of institutional development (after 1948). [ABSTRACT FROM AUTHOR]

The article analyzes the benefit of using a gross domestic product (GDP)-linked sovereign paper or sukuk in stabilizing economic growth of developing Islamic countries through risk sharing macro instruments from Islamic finance. Topics discussed are impact of debt servicing on real GDP per capita for lower income countries, and the Sharpe ratio for all the countries based on investor analysis of returns in a risk-adjusted framework.

This paper investigates whether the geographic characteristics of a country can explain cross-country variations in income levels through their ability to explain cross-country variations in cultural traits that enhance economic development. In other words, this paper attempts to determine whether the geographic endowment can serve as an instrument in examining the effect of culture on economic development. The paper conducts two-stage least-squares regressions. The second stage is a regression of the logarithm of real gross domestic product per capita on each of the cultural attributes that are considered in this study. In the first stage, the geographic factors that statistically explain a cultural aspect are used as instrumental variables. The results of the empirical estimation show that the cultural variables, instrumented by the geographic variables, explain cross-country variations in economic development. [ABSTRACT FROM AUTHOR]

This paper seeks to provide new empirical evidence that demonstrates the importance of digital technologies in promoting economic growth, drawing on the literature on advances in growth and leveraging a broader and more robust country-level panel dataset. In particular, this paper estimates the long-run economic impact of digital technologies using mobile phone penetration and internet usage as broad indicators. The empirical results suggest that, between 2004 and 2014, the diffusion of digital technologies significantly improved economic output in Australia and abroad, contributing to steady-state gross domestic product per capita growth of approximately 5.8 per cent on average. These findings could serve as the starting-point for predictions about the likely impact of future technologies, providing a better understanding for policy-makers in prioritising initiatives that will continue to lift living standards in the coming years. [ABSTRACT FROM AUTHOR]

Given the scanty and inadequate studies on Serbia's growth performance before the First World War, this paper presents production‐side GDP estimates for Serbia for six years between 1867 and 1910. It probes into the growth dynamics, assessing convergence with the more developed countries of north‐western Europe, as well as progress towards achieving modern economic growth. Although the economy showed some dynamism in terms of overall GDP, per capita GDP in pre‐First World War Serbia grew by only 0.28 per cent per annum, as much of the overall GDP growth was eroded by rapid population growth. Far from converging with north‐western Europe, Serbia continued to fall behind. Sluggish structural transformation and slow income per capita growth suggest that Serbia's transition to modern economic growth was in its infancy. Growth in the dominant agricultural sector was extensive, driven by expanding arable land and population growth. Land was affordable and easy to obtain; hence, peasants invested little in new technologies. Meanwhile, the modern industrial and service sectors were below a threshold that could sustain rapid growth. Nevertheless, this study also highlights the rapid expansion of a small modern sector and export diversification that reflected emergent 'green shoots' in 1905–10. [ABSTRACT FROM AUTHOR]

Abstract: Using panel data on 47 African countries from 1980–2013, this paper investigates the effects of aid on Africa's economic growth from the perspective of political stability. We find that international aid can promote economic growth in Africa, but the effectiveness of aid depends on countries’ political stability. Further, the intensity of aid affects its effectiveness. When the aid–GDP ratio is between 0 and 69 per cent, aid can promote economic growth in recipient countries, and when this ratio is 27 per cent, the marginal impact of aid on economic growth is maximized. The findings of this paper suggest that providers of aid should avoid providing a substantial amount of aid to countries at risk of political unrest, and they must determine the optimal scale of aid based on the economic development of recipient countries in order to enable aid to generate better results. Recipient countries should maintain social and political stability and ensure that they do not develop an excessive dependence on aid so that they can achieve the self‐sustainable development of their own economies. [ABSTRACT FROM AUTHOR]

This paper examines the behaviour of G7 economies and decomposes their GDP into trend and cycle components using the Kalman filter. The general model of the paper encompasses a number of alternative specifications about trend growth, therefore accommodating diverse views on growth. The business cycle characteristics of G7 economies are then discussed, compared and deliberated in this framework. The empirical results overwhelmingly favor a mean-reverting stochastic process for the growth rate, the general and unrestricted specification of the paper, across G7 countries, though the restrictions are statistically rejected in less than half of the cases. Further reflection on the properties of cycles makes the specifications and the results of this study more reasonable in capturing the characteristics of GDP series, and contributes to solving the controversies in model specifications in some previous studies. [ABSTRACT FROM AUTHOR]

Abstract: This paper aims to assess the efforts of the Saudi government in diversifying its economy. A descriptive analysis was used to evaluate the efforts the Saudi government exerted to enhance economic diversification through nine development plans covering 45 years (from 1970 to 2014). Two measures of economic diversification were applied, instability of private gross domestic product (GDP) and its relation to oil price instability, and relative contribution of private and public sectors to GDP. The research concludes that Saudi government has succeeded in moving towards economic diversification in the last two development plans compared to the previous seven development plans, although the economic diversification was a slow‐paced process. The performance of the private sector is still low which calls for a prompt intervention from the Saudi government to improve the legislative environment, competition, and attracting big international companies to enter Saudi market and raise the level of efficiency of the private sector and achieve its main goal of being less dependent on oil sector and its revenue. [ABSTRACT FROM AUTHOR]

Recent headlines frequently refer to rising inequality and its implication on economic growth and social welfare. Addressing the latter is difficult and requires more than simply looking at GDP, as Kuznets long ago pointed out. In this paper we focus on the importance of the income measure underlying the inequality measure when examining the relationship between GDP growth and inequality. We create a mapping using Census Bureau household survey data and Bureau of Labor Statistics (BLS) consumer expenditure data to create distributional measures of the Bureau of Economic Analysis (BEA) personal income. We show that for the period 2000-2012, inequality using personal income is substantively lower than inequality measured using Census Bureau money income, and the trends in both inequality and median income are different. This demonstrates the importance of using a measure a national accounts based measure of income when examining the relationships between inequality and growth. [ABSTRACT FROM AUTHOR]

This paper presents estimates of the effects that terms of trade volatility has on real gross domestic product (GDP) per capita growth. Based on 5-year nonoverlapping panel data comprising 175 countries during 1980 to 2010, the paper finds that terms of trade volatility has significant negative effects on economic growth in countries with procyclical government spending. In countries where government spending is countercyclical, terms of trade volatility has no significant effect on growth. Conditional on the mediating role of government spending cyclicality, the GDP share of domestic credit to the private sector has no significant effect on the relationship between growth and terms of trade volatility. [ABSTRACT FROM AUTHOR]

This paper proposes a theoretical method to account for historical episodes of growth disparity. A numerical computation shows that the properties of the local dynamics of the proposed model are consistent with the facts indicated by selected episodes. [ABSTRACT FROM AUTHOR]

In this paper, we investigate the effect of corruption on the economic development of the Latin American and Caribbean countries. Using panel data covering the period from 2000 to 2018 and leveraging on two‐way fixed‐effect and system generalized method of moments estimators, we show that a one standard deviation increase in corruption, as measured by the reversed Transparency International's corruption perception index, is associated with a decrease of 12.2% in gross domestic product per capita and a decrease of 3.05% in economic growth. This supports the view that corruption "sands the wheels" of the development of Latin American and Caribbean countries rather than "grease the wheels" perspective that corruption may help compensate for bad governance. We also assess the potential mechanisms through which corruption affects economic performance, providing evidence that corruption is associated with lower investment in physical capital and lower foreign investment flow. Finally, a panel Granger causality test indicates a bidirectional causality between higher corruption and lower economic development. [ABSTRACT FROM AUTHOR]

The export-led growth hypothesis is tested using monthly time series data for Shanghai (one of the major exporting provinces in China) using the Granger no-causality procedure developed by Toda and Yamamoto (1995) in a vector autoregresion (VAR) model. This paper builds on the existing literature in three distinct ways. This is the first study of the export-led growth hypothesis which employs a regional dataset (Shanghai). Second, the paper follows Riezman et al . (1996) in controlling for the growth of imports to avoid a spurious causality result; and finally, the use of the methodology by Toda and Yamamoto is expected to improve the standard F -statistics in the causality test process. The research finds one-way Granger causality running from GDP to exports. [ABSTRACT FROM AUTHOR]

In this paper, the convergence clustering in 31 Chinese provinces regarding several important economic indicators over the period 1952 to 2016 was empirically investigated. Several provincial clusters were identified in the per capita (real) gross domestic product (GDP), consumption–income ratio, retail price, and consumer price inflation rates, using a club convergence and clustering procedure. The empirical findings are as follows. First, it was found that all series of the original data contain a significant nonlinear component. Second, it was observed that there are five significant clusters for the per capita income in China. Third, it was found that there are four significant clusters for the consumption–income ratio. Fourth, it was observed that there are four significant clusters for the retail inflation rates and two significant clusters for the consumer inflation rates in China. These results will enable local and central planners to implement economic growth, savings and price adjustment policies for different groups of provinces. [ABSTRACT FROM AUTHOR]

A Fisher's Identity model is established to study Northern Song China's (960-1126) level of velocity of money using money supply and gross domestic product ( GDP) data. Results of the exercise help rationalize what is called the 'bronze coin' puzzle, which is the massive amount of minted coins seemingly incommensurate with price levels. It is shown that the velocity of money was increasing and comparable to pre-industrial England levels. This paper argues that the driving forces of the short supply of money are greater than usual hoarding by the state treasury and coin outflows to Song's trading partners via smuggling. Since velocity of money is an indicator of economic development in ancient societies, this paper provides a realistic validation of the premise of the Needham puzzle. [ABSTRACT FROM AUTHOR]