Search

Increasing returns to scale is essential to both spatial economics and macroeconomic growth. Spatial externalities imply external local increasing returns that generate an uneven spatial distribution of economic activity. While non-rival knowledge also implies increasing returns – in order to endogenise growth – this is not a spatial micro-foundation. Spatial theories of growth must be carefully specified to avoid unintended conclusions about the spatial economy and scale effects. This is demonstrated with a spatial endogenous growth model without scale effects that includes a spatial mechanism that facilitates agglomeration economies for innovation. In this class of models that combine spatial mechanisms with endogenous growth without scale effects, local increasing returns to scale imply that productivity, growth and interest rates are functions of the economy's spatial distribution, but not its scale. [ABSTRACT FROM AUTHOR]

In some classes of macroeconomic models with financial frictions, an adverse financial shock successfully explains a decrease in real activity but simultaneously induces a stock price boom. The latter theoretical result is not consistent with data from actual financial crises. This study aims to provide a theoretical explanation for both prolonged recessions and stock price declines. I develop a simple macroeconomic model featuring a banking sector, financial frictions, and R&D-based endogenous growth. Both the analytical and numerical investigations show that endogenous R&D investment and a shock hindering banks' financial intermediary function can be key to generating both a prolonged recession and a drop in firms' stock prices. [ABSTRACT FROM AUTHOR]

In this paper, we develop a framework to analyze stochastic dynamic optimization problems in discrete time. We obtain new results about the existence and uniqueness of solutions to the Bellman equation through a notion of Banach contractions that generalizes known results for Banach and local contractions. We apply the results obtained to an endogenous growth model and compare our approach with other well‐known methods, such as the weighted contraction method, countable local contractions, and the Q‐transform. [ABSTRACT FROM AUTHOR]

This research identifies the critical challenges surrounding agricultural value chains and their role in fostering sustainable industrial development in Sub-Saharan Africa (SSA) between 1990 and 2022, utilizing the Panel Least Squares (PLS) technique. The paper reports that agricultural value added (p < 0.01), farm machinery (p < 0.05), human capital (p < 0.01), and access to electricity (p < 0.01) exhibited a positive and significant influence on industrial sector output. Conversely, agricultural raw materials exports (p < 0.01) had a negative and significant impact on industrial sector output (p < 0.01). In conclusion, the study underscores the critical role of agricultural value chains in fueling sustainable industrial development in SSA and recommends that policymakers formulate plans to leverage agricultural value chains as catalysts for enduring economic growth and development. [ABSTRACT FROM AUTHOR]

This paper contributes to theoretical endogenous growth literature, establishing the role of efficiency of public infrastructure use by private/public production sectors and composition of public infrastructure (i.e. proportion of public infrastructure directed towards productivity-enhancing purposes) in growth-process. For a small open economy with private/public production sectors, at free trade, increases in efficiency of public infrastructure use by private/public production-sector increase balanced growth rate, ratios of economy-wide aggregate-level of (i) private to public capital and (ii) employment to public – capital, under restrictions on efficiency – composition mix of public infrastructure and the free trade price, given other model-parameters; i.e. effect of efficiency-increase depends on public infrastructure composition. Thus, assessment of macroeconomic implications of employment should consider efficiency and composition of public infrastructure. [ABSTRACT FROM AUTHOR]

Russia’s Arctic policy focuses on making large-scale progress in the Arctic’s social and economic domains, including the development of local natural resources and the Northern Sea Route and the establishment of high-tech centers that can create global value chains. One of the primary challenges and threats to the sustainable development of the Russian Arctic regions is the mismatch between regional higher education systems and the needs of the economy. The risks are significantly exacerbated by the global economic transformation and the advent of the Fourth Industrial Revolution. Therefore, when considering the prospects for the innovation-driven development of the Arctic’s economy, a critical issue is the accumulation of highly educated human capital, where higher education plays a key role. The article explores the issues surrounding the formation and accumulation of human capital from the perspective of regional economic growth. The goal of this work is to empirically test the theory of increasing returns on investments in education. The key premise is that human capital accumulation has constant returns and can therefore grow indefinitely. This made it possible to put forward the hypothesis that the better the population’s access to higher education, the bigger the human capital and, accordingly, the higher the growth of gross output per capita. An empirical assessment was conducted to check the test model of the influence of university enrollment rates on economic growth. The results indicated a high coefficient of determination from the regression of the time series of the studied indicators. Also, the model showed the presence of conditional convergence, which means that a decrease in university enrollment rates is compensated for by an increase in the return on human capital due to an increase in the quality of education.

China is currently entering a stage of high-quality development, with urban development and governance facing systematic reconstruction of internal and external conditions, showing clear differences and the complex superposition of multi-stage development. The steady progress of urbanization has facilitated significant changes in the population structure of Chinese cities. It is expected that the population and industries will further converge to urban agglomerations and big cities, indicating basic multicenter and network patterns. Therefore, analyzing the negative population growth risks of urban agglomerations at different development stages is crucial. This study examined the cities of 19 urban agglomerations in China by adopting the data of the seventh population census, employing the optimized fuzzy logic method, building a complex network of population flow with ArcGIS and MATLAB platforms, and using the intensity of population flow and the registered population fertility rate to represent exogenous and endogenous growth, respectively. The negative population growth evaluation index system was constructed with five indicators: child ratio, aging rate, average family size, population density, and sex ratio. The risk index of negative population growth was measured using the fuzzy logic method, and the growth mechanism of negative population growth risk in urban agglomerations in China was analyzed using the spatial measurement method. (1) The negative population growth risk of growing urban agglomerations was influenced by both exogenous and endogenous growth, with exogenous growth having a greater impact. (2) The dynamic mechanism of negative population growth risk in large urban agglomerations is exogenous growth, whereas that of nurturing urban agglomerations is endogenous growth. (3) According to the risk of negative population growth in China's urban agglomerations and its influencing factors, negative population growth in 19 urban agglomerations can be divided into eight types. 1) The state of population growth of expanding urban agglomerations can be divided into two types, with the middle reaches of the Yangtze River and Chengdu-Chongqing urban agglomerations as one type; the capital city has a low risk of negative population growth, while other cities have a high risk of negative population growth. The Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei city clusters are the same, with the capital and other cities having a relatively low risk of negative population growth. 2) The status of large urban agglomerations can be divided into two types: Shandong Peninsula, Central Plains, Guanzhong Plain, and Beibu Gulf urban agglomerations. The capital city has a low risk of negative population growth, whereas other cities have a high risk of negative population growth. The risk of negative population growth in capital cities and other cities is relatively low. 3) The state of population growth of cultivated urban agglomerations can be divided into four types: the Harbin and Changsha urban agglomerations and the central and southern Liaoning urban agglomerations, which have a high risk of negative population growth. Meanwhile, the northern slope of the Tianshan Mountain City cluster and the Hubao Eyu City cluster have low risk of negative population growth. The risk of negative population growth is low in the provincial capital city and high in the other cities, while endogenous growth is positive in the provincial capital city and negative in the other cities. In the Jinzhong City, Central Guizhou City, and Central Yunnan City groups, the risk of negative population growth is low in provincial cities and high in other cities. Endogenous growth shows that the capital city and other cities have positive growth. In conclusion, this study posits that upgrading urban agglomerations should consider the spatial balance of population distribution, large urban agglomerations should fulfill their role in "blocking the flow" of big cities, and nurturing urban agglomerations should "consolidate human capital." This study presents a comprehensive and in-depth analysis of the negative population growth risk and its impact mechanisms in different development stages of urban agglomerations. This can provide a decision-making reference for the formulation of scientific and reasonable population and economic policies in various urban agglomerations and plays a significant role for maintaining a long-term stable population, economy, and social growth in the region.

This paper argues that the joint relation between long-term orientation, environmental quality and innovation plays a key role in explaining the economic and the environmental dimension of sustainability. In our model multiple equilibria of economic development and environmental quality can arise due to a trade-off between the demand for innovation that promotes sustainability, and the ephemeral pleasure from polluting manufacturing that impedes it. Additional to traditional policies such as aid and technology transfers, policies that target behavioral changes through environmental protection may provide a double-dividend of economic and environmental sustainability through an environment-patience-innovation channel. [ABSTRACT FROM AUTHOR]

We consider a growing economy which is subject to recurring, random, uninsurable, and potentially large and long-lasting climate shocks leading to destruction of infrastructure, land degradation, collapse of ecosystems or similar loss of productive capacity. The associated damages and the hazard rate are endogenously driven by the stock of greenhouse gases. We highlight the important role of the relative risk aversion and provide analytical solutions for the optimal climate policy, the growth rate and the saving propensity of the economy. We stress the importance of jointly determining these variables, especially if the objective is to formulate meaningful policy prescriptions. If, for example, the growth rate or the saving rate are assumed to be exogenous, and thus independent of the characteristics of climate shocks and economic fundamentals, then future economic developments in the face of climate change and, consequently, the future mitigation efforts will deviate from the optimal paths. In a quantitative assessment we show that with log-utility and under favorable technological and climatic conditions the abatement expenditure represents only 0.5% of output, equivalent to $37 per ton carbon. Under less favorable conditions, coupled with a relative risk aversion which exceeds unity, the abatement propensity increases to 2.9%, equivalent to $212 per ton carbon, and it jumps to a striking 16% in the pessimistic scenario involving severe shocks and low efficiency of abatement technology. [ABSTRACT FROM AUTHOR]

The effect of university-industry collaboration is extensively studied at the firm and regional levels. Although collaboration is considered a source of competitive advantage for universities and industry, no studies are conducted internationally. However, many studies recommended that university-industry collaboration can affect economic growth, but the effect of university-industry R&D collaboration still needs to be tested in the international context. The triple helix concept suggests collaboration impacts economic growth, but its mechanism has yet to be explained extensively. This study aimed to investigate the causal effect of the university-industry R&D collaboration on economic growth through capital formation and human capital, which are variables of the endogenous growth model. Baron and Kenny's approach with fixed effect regression is applied. The result suggests that the university-industry R&D collaboration significantly and positively affects economic growth through capital formation. There is no such indirect effect in high and upper-middle-income countries separately. For 124 country panel data, we found a significant indirect impact of the university-industry R&D collaboration on log of real GDP per capita. [ABSTRACT FROM AUTHOR]

This paper investigates the theoretical foundation for developing renewable geothermal resources locally. For this reason, we pay attention to the role of communities in geothermal development. We derive it from the integral characteristics of geothermal energy next to the shift in the energy transition policies to focus on managing green resources locally. This study presents arguments for a framework that approaches geothermal resources as an endogenous factor of community development. To analyse it, we create a model that explains the local economic characteristics of geothermal exploitation beyond its geological conditions. It aims to conceptualise a community-based geothermal development standard referring to the endogeneity principle. Geothermal energy is given attention since the characteristics of this resource determine its use locally. This induces the internalisation of labour and technology in the local economic system, a specific condition for local geothermal projects where a community remains a prime beneficiary. We argue that the role of communities in geothermal exploitation is pivotal in the process of green growth for further expansion of geothermal energy use. [ABSTRACT FROM AUTHOR]

We study an endogenous growth model with publicly funded human capital accumulation and with public debt, where we allow for heterogeneous households. One household acquires human capital while the other remains low-skilled. Aggregate production is a function of physical capital and of high-skilled and low-skilled labor. The government can run into debt, but, sticks to the inter-temporal budget constraint. We analyze the steady state and we investigate effects of fiscal policy on long-run growth and on the distribution of welfare. Further, we analyze effects of switching from a balanced government budget to permanent public deficits taking into account transition dynamics. [ABSTRACT FROM AUTHOR]

China is currently entering a stage of high-quality development, with urban development and governance facing systematic reconstruction of internal and external conditions, showing clear differences and the complex superposition of multi-stage development. The steady progress of urbanization has facilitated significant changes in the population structure of Chinese cities. It is expected that the population and industries will further converge to urban agglomerations and big cities, indicating basic multicenter and network patterns. Therefore, analyzing the negative population growth risks of urban agglomerations at different development stages is crucial. This study examined the cities of 19 urban agglomerations in China by adopting the data of the seventh population census, employing the optimized fuzzy logic method, building a complex network of population flow with ArcGIS and MATLAB platforms, and using the intensity of population flow and the registered population fertility rate to represent exogenous and endogenous growth, respectively. The negative population growth evaluation index system was constructed with five indicators: child ratio, aging rate, average family size, population density, and sex ratio. The risk index of negative population growth was measured using the fuzzy logic method, and the growth mechanism of negative population growth risk in urban agglomerations in China was analyzed using the spatial measurement method. (1) The negative population growth risk of growing urban agglomerations was influenced by both exogenous and endogenous growth, with exogenous growth having a greater impact. (2) The dynamic mechanism of negative population growth risk in large urban agglomerations is exogenous growth, whereas that of nurturing urban agglomerations is endogenous growth. (3) According to the risk of negative population growth in China's urban agglomerations and its influencing factors, negative population growth in 19 urban agglomerations can be divided into eight types. 1) The state of population growth of expanding urban agglomerations can be divided into two types, with the middle reaches of the Yangtze River and Chengdu-Chongqing urban agglomerations as one type; the capital city has a low risk of negative population growth, while other cities have a high risk of negative population growth. The Yangtze River Delta, Pearl River Delta, and Beijing-Tianjin-Hebei city clusters are the same, with the capital and other cities having a relatively low risk of negative population growth. 2) The status of large urban agglomerations can be divided into two types: Shandong Peninsula, Central Plains, Guanzhong Plain, and Beibu Gulf urban agglomerations. The capital city has a low risk of negative population growth, whereas other cities have a high risk of negative population growth. The risk of negative population growth in capital cities and other cities is relatively low. 3) The state of population growth of cultivated urban agglomerations can be divided into four types: the Harbin and Changsha urban agglomerations and the central and southern Liaoning urban agglomerations, which have a high risk of negative population growth. Meanwhile, the northern slope of the Tianshan Mountain City cluster and the Hubao Eyu City cluster have low risk of negative population growth. The risk of negative population growth is low in the provincial capital city and high in the other cities, while endogenous growth is positive in the provincial capital city and negative in the other cities. In the Jinzhong City, Central Guizhou City, and Central Yunnan City groups, the risk of negative population growth is low in provincial cities and high in other cities. Endogenous growth shows that the capital city and other cities have positive growth. In conclusion, this study posits that upgrading urban agglomerations should consider the spatial balance of population distribution, large urban agglomerations should fulfill their role in "blocking the flow" of big cities, and nurturing urban agglomerations should "consolidate human capital." This study presents a comprehensive and in-depth analysis of the negative population growth risk and its impact mechanisms in different development stages of urban agglomerations. This can provide a decision-making reference for the formulation of scientific and reasonable population and economic policies in various urban agglomerations and plays a significant role for maintaining a long-term stable population, economy, and social growth in the region. [ABSTRACT FROM AUTHOR]

This essay offers reflective learning on how researchers in the Western science tradition connect to bodies of knowledge created and held outside that tradition. It begins with endogenous growth theory, which explains the unique role of knowledge as an input into economic production. The essay describes how Western science addresses the problem of validating and accessing knowledge, by hosting an expanding corpus of peer-reviewed publications. This academic knowledge does not contain all current knowledge. The essay therefore draws on the authors' experience in four large research programmes to consider business knowledge and mātauranga Māori. It reflects on agency, tikanga [right behaviour], global conversations about Indigenous knowledge, and decolonising research. The essay finishes with models of knowledge engagement in the interface between western Science and mātauranga Māori that support the mana and integrity of diverse knowledge streams. [ABSTRACT FROM AUTHOR]

In this paper, we study the effects of macroeconomic uncertainty shocks on the US economy in the long-run using an IV-SVAR methodology for the period 1960–2019. Following Piffer and Podstawski (Econ J 128(616):3266–3284, 2018), we use variation in gold prices as an instrument to identify the uncertainty shocks. We find that potential output decreases persistently in response to an uncertainty shock. Furthermore, our study shows that decline in the R &D investments and business dynamism are the two key transmission channels of the uncertainty shocks that generate long lasting effects on the economy. [ABSTRACT FROM AUTHOR]

This study develops a new dynamic general equilibrium model to explore the role of people's love of novelty as a cultural preference in innovation and innovation-based growth. The model considers (a) an infinitely lived representative consumer who has standard love-of-variety preferences for differentiated products and additional love-of-novelty preferences for new products and (b) technological progress driven by two costly and time-consuming innovation activities, new product development and existing product development. We demonstrate that consumers' love of novelty is a source of innovation-based growth, wherein economies with a moderate love of novelty can achieve innovation and long-run growth through endogenous cycles between periods in which new product development is active and those in which existing product development is active. However, if love of novelty preference is too weak or too strong, the economy is caught in an underdevelopment trap with less innovation and no long-run growth. We also provide some suggestive empirical evidence that supports our theoretical predictions. [ABSTRACT FROM AUTHOR]

Open innovation ecosystems play an important role in corporate and product innovation and contribute to the success of economic development at the municipal level, yet there is little research on the factors driving innovative behavior within a municipal innovation ecosystem (MIE). This study explores how the interpersonal and intrapersonal resources of the individuals involved contribute to innovative behavior within a city's innovation ecosystem. This study applies a mixed-method approach to build a novel framework to examine innovative behavior in the Mobile, Alabama, municipality. A moderated mediation model is tested using PLS-SEM. The qualitative findings presented in this study uncover new constructs useful for assessing innovation at the individual level in a municipality. Scale development steps are employed to validate these new constructs. The SEM results suggest that personal resources and social interactions impact innovative behavior in an MIE. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to determine the influence of Foreign Direct Investments (FDI) on economic growth in Sub-Saharan Africa (SSA). It examines the endogenous growth theory and the Environmental Kuznets Curve (EKC) theory, and how they relate to the regional data. Method: Using panel quantile autoregression models, this study explores the relationship between FDI inflows into SSA with energy consumption, carbon emissions, and economic growth. The study is based on data from 1975 to 2018. Result: The study findings conclusively demonstrate that foreign direct investment has a significant impact on the economic growth of the SSA region. Furthermore, the study reveals that energy consumption and carbon emissions in the SSA have consistently increased throughout the study period, with foreign direct investment being identified as the primary driver of this trend. These findings are consistent with the Environmental Kuznets Curve (EKC) hypothesis, as well as the endogenous growth theory, which suggests that FDI operations can have negative consequences on the host environment. Practical Implications for Economic Growth and Development: The study suggests that Sub-Saharan Africa should manage FDI carefully to balance economic growth with environmental sustainability by promoting green investments and creating an investment-friendly environment.

This paper revisits the theoretical framework of endogenous economic growth by considering models where human capital accumulation is at the center of the growth process. Our work is in line with Lucas (2015), who calls for not giving “too large a role to exogenous technological change” (p. 86) while advocating that “the contribution of human capital accumulation to economic growth deserves a production function of its own” (p. 87). The main finding of our research provides the long-term behavior of economies, where our main results locate and extend these discussions to infinite-horizon models in several ways. Correction Notice Correction to Tran, N. T. and Thai, H. H. (2023). Human capital as the source of economic growth. Dalat University Journal of Science, 13(4S), 30–41. As initially published, this article contained an error in the author list. In the corrected version of the article, Thai Ha Huy [University of Évry (University of Paris-Saclay), Évry, France] has been removed from the author list as the authorship of the article belongs solely to Tran Nhat Thien [The Faculty of Economics and Business Administration, Dalat University, Lam Dong, Vietnam]. The author list of this article has been corrected at the request of the Editor-in-Chief because the author list was originally incorrect. In November 2023, the Dalat University Journal of Science (DLU-JOS) became aware that the author/contributor list presented in the article was incorrect. The error was reported to the DLU-JOS by the two authors themselves. One of the authors was not aware that his name had been included in the author list of the article, and both authors agreed to request that the article be retracted. In accordance with the international guidelines established by the Committee on Publication Ethics, of which the DLU-JOS is a member, we have determined that these are not grounds for retraction. We have determined that the authorship of the article was disputed but that no reason exists to doubt the validity or reliability of the findings. Therefore, a correction to the author list should sufficiently address the concerns raised by the two authors. To ensure transparency and the accuracy of the scholarly record, we have decided to issue a formal correction to the author/contributor list of the article with the belief that the two authors have provided appropriate proof that such a correction is justified. The authors have agreed to this formal correction notice. The DLU-JOS regrets this incident and extends its apologies to its readers.

This paper assesses how the influx of skilled and unskilled refugees affects the technological-knowledge-bias and, consequently, the skill premium in host communities, looking in particular at the case of Poland following the war in Ukraine. We use a dynamic endogenous R&D general equilibrium model, in which labour endowments are related to the direction (or bias) of technological knowledge, which in turn drives the dynamics of key economic variables. With price channel dominance, the shock of the war causes an increase in the technological-knowledge-bias and thus the skills premium, given the increased supply of unskilled labour. Fiscal policy, driven by country governments and materialized through direct and indirect subsidies to R&D activity, has stronger effects on the growth rate when applied to unskilled workers. Monetary policy, driven by the central bank through a decline in the nominal interest rate, influences R&D activity through liquidity constraints and is limited by the zero nominal interest rate. To promote competitiveness and growth, a fiscal policy that subsidizes unskilled workers must be promoted. [ABSTRACT FROM AUTHOR]

This study assesses the effect of human capital expansion on China's export product quality. It employs the difference‐in‐differences (DID) framework based on a quasi‐natural experiment investigating the 1999 higher education enrollment expansion as the exogenous policy shock. The empirical results confirm that human capital expansion appreciably improved the quality of China's export products. Human capital expansion promoted the transformation and upgrading of old products and the development of new products in term of intensive margin; it strengthened the endowment advantages of incumbent high‐quality export enterprises while preventing low‐quality enterprises from entering the market through price competition on the extensive margin. This prevented quality decline. Further, the study reveals that the improvement effect driven by human capital came from both innovation‐induced and managerial efficiency improvement channels and was more prominent for large or foreign‐funded enterprises in the eastern region. Our findings highlight the role of human capital in China's remarkable export performance from an endogenous growth perspective. [ABSTRACT FROM AUTHOR]

We examine the factors behind Afghanistan's persistent underdevelopment. Drawing on various theories of development traps operating at the demographic, economic and institutional levels, we seek to assess whether and to what extent their functioning affects Afghanistan's development. To capture the functioning of development traps empirically, we use several empirical indicators, and we employ non-linear smooth transition models to evaluate the link between empirical indicators and economic development. We show that Afghanistan is caught in multiple development traps with entwined functioning, creating additional positive feedback loops that impede both the endogenous development of productive capacities and the broader social structural changes. [ABSTRACT FROM AUTHOR]

We develop a model of endogenous growth with automation to study the impact of industrial robots on growth and labour income. We incorporate human capital accumulation into that framework to examine the role of human capital in sustaining growth without displacing low-skilled labour. While automation replaces low-skilled labour with industrial robots in conducting routine tasks, horizontal innovation creates new varieties in which low-skilled labour has an employment advantage. Labour-augmenting technology takes place to improve productivity of low-skilled labour. As such, those latter types of innovation help counterbalance the adverse effect of automation on low-skilled labour. Human capital, the essential production factor that takes part in every economic activity, including conducting non-routine tasks, accumulates over time through education and training. We show that there exists a long-run equilibrium at which either robots or low-skilled workers are employed, together with human capital, to produce varieties. In the fully endogenous model, final output grows at the rate of human capital accumulation. An improvement in the quality of education and training leads to an acceleration of both automation and variety expansion, but not human capital growth. Our numerical exercise indicates that a permanent increase in automation entails a permanent impact on the range of automated varieties, long-run output level and human capital wage. The shock lowers long-run growth and low-skilled workers' wage and their effective income share. However, it has no effect on the effective income share of human capital. [ABSTRACT FROM AUTHOR]

We embed skill obsolescence and endogenous growth into a New Keynesian model with search‐and‐matching frictions. The model accounts for key features of the Great Recession: the "productivity puzzle" and the "missing disinflation puzzle." Lower aggregate demand raises long‐term unemployment and the training costs associated with skill obsolescence. Lower aggregate employment hinders learning‐by‐doing, which slows down human capital accumulation, feeding back into even fewer vacancies than justified by the demand shock alone. These feedback channels mitigate the disinflationary effect of the demand shock while amplifying its contractionary effect on output. The temporary growth slowdown translates into output hysteresis. [ABSTRACT FROM AUTHOR]

The relationship between military spending and economic growth has been a hot issue in defense economics for decades, but the empirical results have not been consistent. Considering the "learning by doing" effect of military spending and knowledge creation of R&D department, this paper takes the endogenous growth model as the framework, and, through the dynamic analysis of the growth rate of knowledge and capital, finds that the spillover effect of military spending will diverge the path of economic growth. The relationship between m and gY of the USA is further investigated, which shows the results of this model have a good explanatory power. On this basis, the enlightenment of the model results is analyzed. [ABSTRACT FROM AUTHOR]

This paper extends the standard Schumpeterian model of creative destruction by allowing the cost of innovation for followers to increase in their technological distance from the leader. This assumption is motivated by the observation that the more technologically advanced the leader is, the harder it is for a follower to leapfrog without incurring extra cost for using leader's patented knowledge. Under this R &D cost structure, leaders have an incentive to play an "endpoint strategy": they increase their technological advantage, counting on the fact that followers will eventually stop innovating—allowing leadership to prevail. We find that several results in the standard model fail to hold. In addition to the high-growth steady state in which only followers innovate, there now exists a second saddle-path-stable steady state: a low-growth steady state that features both leaders and followers innovating. A policy that increases monopolistic rents or extends parent duration can push the economy toward the low-growth steady state, causing, in some cases, irreversible harm to long-run growth. [ABSTRACT FROM AUTHOR]

We construct a continuous‐time overlapping generations model with an endogenous growth structure and consider fiscal sustainability under two fiscal rules: (i) the government fixes the budget deficit‐to‐GDP ratio and (ii) the government fixes the primary balance‐to‐GDP ratio. Under the constant budget deficit‐to‐GDP rule, fiscal sustainability is ensured when the initial public debt‐to‐GDP and budget deficit‐to‐GDP ratios are sufficiently small. Under the constant primary balance‐to‐GDP rule, it is difficult to ensure fiscal sustainability when the primary balance is in deficit or zero. However, fiscal sustainability is ensured when the primary balance is in surplus and the initial government debt‐to‐GDP ratio is sufficiently small. [ABSTRACT FROM AUTHOR]

This article analyses the balanced‐growth‐path effects of monetary policy (inflation) on the skill premium and the growth rate in the context of a directed technical change model with cash‐in‐advance (CIA) constraints specific to the unskilled and skilled sectors. Calibrating the model using data from 36 countries, the presence of more stringent CIA constraints in the unskilled sector, as supported by the literature, causes inflation to have a positive effect on the skill premium. Moreover, it also increases the negative impact of inflation on the growth rate in relation to the baseline scenario of homogeneous CIA constraints. A lower labour share and higher inflation in general magnify these effects on both variables while a relative lower importance of the unskilled sector does the opposite with respect to the skill premium. Therefore this article innovates in three important ways: (i) we add an additional channel through which inflation affects inequality; (ii) we highlight the importance of avoiding ignoring differences of liquidity constraints across the economy in the context of endogenous growth models to not underestimate the negative long‐run impacts of inflation; (iii) the results suggest that developing countries that have difficulty in achieving price stability in the long‐run can mitigate the negative effects of inflation by reducing constraints faced by the unskilled sector and promoting the development of the skilled sector. [ABSTRACT FROM AUTHOR]

This paper investigates the theoretical foundation for developing renewable geothermal resources locally. For this reason, we pay attention to the role of communities in geothermal development. We derive it from the integral characteristics of geothermal energy next to the shift in the energy transition policies to focus on managing green resources locally. This study presents arguments for a framework that approaches geothermal resources as an endogenous factor of community development. To analyse it, we create a model that explains the local economic characteristics of geothermal exploitation beyond its geological conditions. It aims to conceptualise a community-based geothermal development standard referring to the endogeneity principle. Geothermal energy is given attention since the characteristics of this resource determine its use locally. This induces the internalisation of labour and technology in the local economic system, a specific condition for local geothermal projects where a community remains a prime beneficiary. We argue that the role of communities in geothermal exploitation is pivotal in the process of green growth for further expansion of geothermal energy use.

Bu çalışmanın amacı Avrupa Komisyonu’nun AB15 ülkeleri için toplam vergi gelirleri değişmeden vergilerin dolaysız vergilerden dolaylı vergilere kaydırılmasının ekonomik büyümeyi uzun dönemde olumlu etkilediği önerisini genişleme sürecini temsilen Türkiye’yi de dâhil ederek test etmektir. Bu çerçevede 16 ülkenin 1970-2017 dönemi verileri kullanılarak havuzlanmış ortalama grup yöntemi ile elde edilen tahmin sonuçlarına göre gelir-nötr yaklaşım altında vergi gelirlerinin gelir vergilerinden tüketim vergilerine kaydırılması uzun dönemde ekonomik büyümeyi olumlu etkilemektedir. Ayrıca bu çalışmada vergilerin ilgili literatürde değinilmeyen kısa dönem etkileri de test edilmiştir. Vergilerin kısa dönemde ekonomik büyümeyi teorik beklentinin aksi yönünde etkileyebildiği sonucuna ulaşılmıştır. Bu sonucun arkasında yatan muhtemel nedenler kişisel gelir vergisi ile tüketim vergilerinde ülkelere göre uygulama farklılıkları ve kurumlar vergisinde küçük işletme sayısıdır.

Economics and the ideas of economists are often found to be closely linked with how society and individuals can enhance their economic well-being and how the process of growth and wealth accumulation can be encouraged. From the very beginning of economic thought, the idea of economic growth and the process of achieving it has been a prime concern among scholars of economists. The growth theory, put forward by Sir Henry Roy Forbes Harrod is popularly known as a starting of the modern views relating to growth theories. The paper tries to present a survey regarding the development of these modern growth theories of economics starting from Harrod to Romer, who got the Novel Prize for his endogenous growth theory.

Copyright of Modern Economic Science is the property of Modern Economic Science Editorial Office and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We explore the growth and welfare effects of monetary policy in a Schumpeterian economy with cash‐in‐advance (CIA)‐constrained research and development (R&D) investment in both the upstream and downstream sectors. We show that the nominal interest rate can have an inverted‐U relation with economic growth due to its effects on labor allocations between manufacturing and R&D and between the R&D sectors. Furthermore, aggregate R&D overinvestment is generally sufficient but not necessary for the Friedman rule of zero nominal interest rates to be suboptimal. Calibrated using data from U.S. manufacturing firms, our model features a positive welfare‐maximizing nominal interest rate despite aggregate R&D underinvestment. [ABSTRACT FROM AUTHOR]

We revisit the Friedman rule in a labor search model and extend Heer (2003), Cooley and Quadrini (2004), and Wang and Xie (2013) to one that allows for endogenous growth. We show that, even without a liquidity effect or a CIA constraint on firms' wage payment, our model offers a different channel for moderate money growth to increase welfare. Intuitively, in a one-sector endogenous growth economy, the technology is of constant returns with respect to capital. When the labor market is frictional, a moderate increase in money growth induces an expansion in vacancy and employment. Labor and capital are complements in production. With an increase in employment, when the technology is neoclassical, the decreasing return in capital leads to a lower marginal product of labor. However, in an endogenous growth framework wherein the technology exhibits socially constant returns in capital, the marginal product of labor is constant. Due to a constant marginal product of labor, modest inflation raises employment, enlarges economic growth, and increases welfare. Moreover, the optimal long-run inflation rate departs from the Friedman rule, even when the Hosios rule holds. Finally, we find that our model with sustainable growth fits the data better than that without sustainable growth. [ABSTRACT FROM AUTHOR]

I develop a dynamic model of consumption variety in status goods by introducing a realistic aspect that is new in the existing literature—that a good will not carry status appeal unless it is advertised. As advertisements will divert resources from new product research, growth in new products will be reduced. However, status-good advertisements also enhance distinctiveness of a good and increase a firm's profit. This will motivate more researches. With the two effects offsetting each other, the original market bias in a standard product-development model—insufficient research due to a general knowledge spillover—cannot be overcome. While introducing advertising into models of this kind does not reverse the original welfare implication of suboptimal growth, this makes available a new and better intervention option—taxing advertisements. This tax is superior to consumption tax, the conventional solution to inefficient status competition, as consumption tax is found to be ineffective in the present model. It is also superior to research subsidies, the conventional solution to suboptimal growth, as subsidies must be financed and is not a self-sufficient policy. [ABSTRACT FROM AUTHOR]

We try to explain the simultaneous increases in economic growth and income inequality in China with a heterogeneous endogenous growth-based DSGE model. It is found that: First, our model can simulate the positive correlation between economic growth and income inequality in China. China's economic development has created better conditions and incentives for the accumulation of human capital of workers with high initial human capital, thus stimulating them to contribute more to economic growth, but this widens the income inequality simultaneously. Second, the change in economic growth and the change in income inequality also exhibit a positive correlation under the influence of various policy shock. Any shock that raises economic growth, such as different types of technology shock and investment shock (after 8 quarters), will correspondingly widen income inequality. Conversely, any shock that reduces economic growth, such as fiscal spending shock, interest rate shock and investment shock (before 8 quarters) will correspondingly reduce income inequality. Third, the government's preference for workers with high initial human capital in the implementation of macroeconomic policies determines the positive correlation between the change in economic growth and in income inequality. Workers with high initial human capital are central to the effectiveness of macroeconomic policies. [ABSTRACT FROM AUTHOR]

We propose an endogenous economic growth DSGE model based on human capital accumulation theory. Then we estimate the DSGE model by the Bayesian method, using the economic data of China, the USA, and Japan from 1996: Q1 to 2018: Q4. It is shown that the estimated models can accurately predict the economic growth rates of the three countries and can tightly fit the economic data of the three countries. Therefore, the model proposed can be employed to predict the economic growth of a typical country and to analyse the determinants of its economic growth in the short and long term. We find that levelling up technology in all fields is helpful for economic growth in the short term, and stimulating labour supply, mitigating monopoly in the goods market and labour market, and increasing the contribution of physical capital in goods production are helpful for economic growth in the long term. [ABSTRACT FROM AUTHOR]

Conventionally, the Staples Thesis constitutes a hypothesis about both the historical and the geographical particularity of the developmental trajectories of resource-dependent economies (Staples Theory) and a methodology that prioritizes contextual or local knowledge (Staples Method). Situating the Staples Thesis in the conceptual framework of regulation theory, this paper develops a spatial econometric model of the dynamics of resource-dependent economies that is sensitive to place-based contingency. This model is grounded in a conceptual framework that distinguishes between a productivity regime and a demand regime whose qualitative properties depend on the assemblage of governance, regulatory and institutional norms that determine the coherence of the relationship between the structure of production and consumption. Within the limits of data availability, a spatial extension of a reduced-form Kaldorian growth model is employed to empirically test Staples Theory by focusing on the differential impact of both the demand regime and the productivity regime on the relative economic performance of Western Australian localities over the course of the recent (2001–11) resource boom. [ABSTRACT FROM AUTHOR]

Copyright of Mexican Journal of Economics & Finance / Revista Mexicana de Economia y Finanzas is the property of Instituto Mexicano de Ejecutivos de Finanzas and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The Great Recession has resulted in a seemingly permanent level shift in many macroeconomic variables. This paper presents a microfounded general equilibrium model featuring frictional labour markets and financial frictions that is able to replicate the business cycle features of establishment dynamics and generate the procyclicality of R&D expenditures. This makes it possible to demonstrate the channels through which productivity and financial shocks influence the aggregate endogenous growth rate of the economy, creating level shifts in its balanced growth path. The results indicate that financial shocks are an important driver of aggregate fluctuations and their influence is especially pronounced for establishment entry. Since the growth rate of the economy can in principle be affected by policy measures, the macroeconomic and welfare effects of applying several subsidy schemes are examined. Subsidising R&D expenditures and lowering barriers to entry were found to be welfare improving, in line with endogenous growth literature. At odds with this literature, static subsidies to incumbents’ operating costs were also found to be welfare improving, a result that only emerges under the stochastic setting.

Purpose – God promised pious individuals who obey to His commandments, to increase their economic well-being. Although it is difficult to demonstrate with figures in hand this causality relationship, Muslims must believe in its existence and robustness at both the individual and collective levels, as it is argued in Qur'an and the Prophetic Narration. We aim in this paper to model this positive relationship between Islamic work ethics and economic growth and prove theoretically its existence. Design/methodology/approach – We develop an endogenous growth model very close technically to Lucas–Uzawa model (1988) in which the human capital defined as the individual's skill level acquired through formal education and learning by doing is replaced by ethical capital (piety). Findings – The model proves theoretically that Islamic ethics are a key engine of endogenous economic growth and that the underdevelopment of Muslim populations is due to their low ethical capital (lack of piety). Practical implications – The study recommends some policies such as providing formal religious education at all educational levels (elementary, secondary and higher levels) and promoting ethical values such as piety, sincerity, transparency, etc., through media and cultural institutions. Also, managers could provide courses and training to their workers to teach them Islamic work ethics. Originality/value – This paper is the first to mathematically model Islamic work ethics as endogenous phenomena in socioeconomic systems and study theoretically their contributions to economic growth.

This study is aimed to empirically prove the hypothesis that currently the influence of workforce aging on the productivity of economy is determined by factors characterizing the level of territory development. The scientific and practical significance of this study is the contribution of the authors to a scientifically based empirical investigation of the influence of workforce aging (due to raising the retirement age) on the productivity of economy in the countries of the modern world. Methods of the empirical analysis. The theoretical background and methodology of this study are based on the concept of specific human capital by G. Becker and the conception of endogenous growth with its emphasis on technology development. The authors use several methods of quantitative data analysis: correlation analysis, regression analysis and cluster analysis in order to identify not only correlational parallelism, but also causal relationships between the variables included in the proof of the research hypothesis. Sources of empirical information. The authors used, whenever possible, the latest statistics from the World Health Organization, Trading Economics and PwC Global, as well as data from the report on the Global Talent Competitiveness Index for 63 countries. These countries represent different continents and have different levels of socio-economic development. The results of the conducted empirical analysis show that in the countries of the modern world, technological readiness, coupled with a high level of lifelong learning, are the catalysts that provide a stimulating effect of raising the retirement age (objectively leading to workforce aging) on the productivity of economy. The authors also concluded that raising the retirement age in the country, without considering the above factors, does not contribute to the effective use of the economic potential of older workers. Цель данного исследования – эмпирическое подтверждение гипотезы о том, что в современном мире влияние старения рабочей силы на производительность экономики детерминируется факторами, характеризующими уровень развития территории. Научное и практическое значение данного исследования состоит во вкладе авторов в научно обоснованное эмпирическое изучение влияния старения рабочей силы, обусловленного повышением пенсионного возраста, на производительность экономики в странах современного мира. Методика эмпирического анализа. Теоретические предпосылки и методология данного исследования опираются на концепцию специфического человеческого капитала Г. Беккера и концепции эндогенного роста с её акцентом на развитии технологий. Авторы используют несколько методов количественного анализа данных: корреляционный анализ, регрессионный анализ и кластерный анализ – с целью выявления не только корреляционного параллелизма, но и причинно-следственных связей между переменными, включёнными в доказательство гипотезы исследования. Источники эмпирической информации. Авторы использовали по возможности новейшую статистику Всемирной организации здраво- охранения и других международных организаций, а также данные отчёта об Индексе глобальной конкурентоспособности по таланту для 63 стран мира, представляющим разные континенты и имеющим разный уровень социально-экономического развития. Результаты проведённого эмпирического анализа показывают, что в странах современного мира технологическая готовность вкупе с высоким уровнем непрерывного обучения являются теми причинами-катализаторами, которые обеспечивают стимулирующее влияние повышения пенсионного возраста (объективно приводящего к старению рабочей силы) на производительность экономики. Авторы также при- шли к выводу о том, что повышение пенсионного возраста в стране без учёта вышеупомянутых факторов не способствует эффективному использованию экономического потенциала работников старшего возраста.