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Purpose: This paper examines the effects of technological infrastructure and a business-friendly environment on economic growth in the Arab world from 2004 to 2021 using a detailed panel data analysis approach. Design/Methodology/Approach: The study chooses the fixed effect model based on the Hausman test with additional diagnostic tests confirming the absence of serial correlation and heteroscedasticity employing fixed and random effect models on data from thirteen Arab countries. Findings: Findings reveal a negative relationship between ease of doing business and GDP growth (Gross Domestic Product) suggesting that improvements in the business environment paradoxically decrease economic growth. Conversely, a positive relationship exists between the human development index and economic growth underscoring the significance of human capital. Notably, no significant relationship is detected between technological infrastructure and economic growth. Conclusion: The study concludes that regulatory reforms and human capital investment are pivotal for economic growth in the Arab world challenging the assumed positive impact of ease of doing business on economic expansion. It underscores the need for a strategic focus on developing human resources and technological infrastructure to foster sustainable economic growth. Contribution to the Literature: This research contributes to the economic literature by highlighting the nuanced effects of the ease of doing business and the essential role of human capital in driving economic growth within the Arab region offering new insights for policymakers. [ABSTRACT FROM AUTHOR]

This article proposes a two-country AK model of growth with cross-country knowledge diffusion and endogenous migration to study the relationship between migration, income inequality, and economic growth. In contrast with mainstream AK literature, the article shows that introducing knowledge diffusion from rich to poor countries makes AK models predict conditional convergence, but also that migration tends to cool the catching-up process of poorer economies. When testing the robustness of the policy implications of the AK literature in the presence of migration, we find that subsidizing capital accumulation in frontier countries stimulates migration and worldwide growth, but also that it increases cross-country inequalities in terms of both income and technology. On the contrary, subsidizing capital accumulation in non-frontier countries reduces migration and mitigates inequalities worldwide, but has no effects on the long-run pace of economic growth of the two countries. [ABSTRACT FROM AUTHOR]

In this paper, we develop a comprehensive model of earnings and labor market dynamics, where employment and job change are endogenous. The model is estimated by applying the method of indirect inference on Swedish register data, and then used to carry out some policy experiments. There are three key conclusions from these experiments. First, employment shocks early in life can, to a larger extent, be mitigated before retirement compared with employment shocks occurring later. Second, we find that idiosyncratic productivity shocks, unobserved heterogeneity, and education contribute substantially to life‐cycle earnings inequality. Finally, we find that transitory shocks to employment risk have negative effects on earnings and employment in the short run but may increase labor market fluidity in the medium run. [ABSTRACT FROM AUTHOR]

What are the historical origins of political fragmentation and unification? This study develops a Malthusian growth model with multiple states to explore interstate competition and the endogenous emergence of political fragmentation versus a unified empire. Our model features an agricultural society with citizens and rulers in a Malthusian environment in which the expansion of one state may come at the expense of another state, depending on the intensity of interstate competition captured by the elasticity of the land ratio with respect to the population ratio between states. If this elasticity is less than unity, then multiple states coexist. However, if this elasticity is equal to unity, then a unified empire emerges. Which state becomes the unified empire depends on its military power, agricultural productivity, and its rulers' preference for rent-seeking Leviathan taxation. We also discuss the historical relevance of these theoretical predictions in the Warring States period of ancient China. [ABSTRACT FROM AUTHOR]

On the occasion of the centennial of his mentor Alvin Hansen, Paul Samuelson published in 1988 a modified version of his seminal 1939 multiplier-accelerator model to address aspects of Hansen's secular stagnation hypothesis. The "Keynes-Hansen-Samuelson" model (or KHS, as he called it) was built to analyse the effects of population growth on the economy's trajectory. Several changes were then made. Instead of difference equations and a tight accelerator, as in his 1939 model, Samuelson deployed differential equations and a flexible accelerator to produce a nonlinear limit cycle. Despite Samuelson's strong claims for the analytical contributions of his 1988 paper, it has – in contrast with the 1939 model – received only scant attention by macroeconomists and historians of economics alike. Samuelson's 1988 paper was his last published macroeconomic model, based on his long-established tradition of non-optimising macro-dynamics. Our paper provides a close reading of that article and some analytical results that shed new light on the formal aspects of Samuelson's 1988 model. We also discuss how it historically links up with business cycle models advanced by John Hicks, Nicholas Kaldor, Roy Harrod and Richard Goodwin and examine how far Samuelson's use of the term secular stagnation differs from Larry Summers's recent reconstruction of it. [ABSTRACT FROM AUTHOR]

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

This study examines the relationship between revenue and profit drivers and long-term financial performance in the hotel industry based on 17-years data (2004–2020) of six US hotel chains. The analysis creates, tests, and analyzes a cross-level model that examines the complex endogenous relationships, underlying long-term financial performance of hotels. Specifically, we examine the interaction of room price (ADR) and customer satisfaction (ACSI) within a sales-volume-driver framework that impacts financial performance through profitability, measured at both the operating and accounting levels. This study seeks to advance our understanding of these relationships, their characteristics, and their implications for long-term financial performance in the hotel industry. The findings reveal that customer satisfaction is more important than price in achieving long-term financial success in the hotel industry, whereas room nights sold is significant positive driver of all performance levels. [ABSTRACT FROM AUTHOR]

This paper studies the dual interaction between economic growth and environmental quality in an endogenous growth model. We exhibit multiple equilibria and complex local and global dynamics, resulting in potential indeterminacy, hysteresis effects, or long-lasting growth and environmental cycles. From a policy perspective, we reveal that changes in the environmental policy should be handled with care, as they may generate aggregate instability or condemn the economy to an environmental poverty trap associated with a possible irreversibility of environmental degradation. Lastly, our analysis provides a reassessment of pollution taxes, which are found to improve long-run economic growth when the model is well-determined, but reduce it in the presence of indeterminacy. [ABSTRACT FROM AUTHOR]

In this paper, we focus on estimating output growth and its components attributed to quasi-fixed inputs, variable inputs, and productivity change, while treating variable inputs as endogenous. We consider two approaches. In the classical approach the time trend variable proxies for technical (productivity) change, while in the productivity (proxy variable) approach, we add a "productivity" term which is correlated with the variable inputs. Therefore, estimation strategies in the two models are different. Instead of using a Cobb–Douglas production function, we employ a translog production function to add flexibility. We showcase our theoretical results with Chinese manufacturing as an empirical exercise. [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]

We endogenize the R&D financial structure and investigate the effects of tax policy (dividend, corporate, and bond income taxes). Agency costs exist between the supply of and demand for funding, which enable the financial market to reshuffle loanable funds out of less productive firms toward others with greater productivity. We show that the financial structure-growth relationship is not monotonic, depending on the relative productivity between the existing and new firms and the allocation of loanable funds between them. The allocation of loanable funds, rather than their market amount, plays a key role in determining the effects of policy. [ABSTRACT FROM AUTHOR]

Persistent performance in venture capital is routinely interpreted as evidence for skill. We present a dynamic model of delegated investment with endogenous fund heterogeneity and deal flow, which generates performance persistence without skill differences and predicts mean reversion in long-term performance. Investors working with multiple funds use contingent payments and tiered contracts to induce proper project nurturing and managerial effort. Successful funds receive continuation contracts that tolerate investment failure and encourage innovation, and subsequently finance entrepreneurs through a path-dependent assortative matching favoring incumbents. Recent empirical findings corroborate the model's general implications, and the economic mechanisms are robust to short-term contracting, endogenous bargaining, and double moral hazard issues. [ABSTRACT FROM AUTHOR]

We develop an endogenous growth model with expanding variety in which asymmetric information frictions arise when R&D firms need access to external funding to finance their R&D investments and public expenditure affects the magnitude of hidden costs, in turn affecting the severity of asymmetric information frictions. We show that public expenditure affects growth by influencing risk sharing, thereby identifying a new channel, unlike the standard mechanism used in the literature that emphasizes the role of public expenditure in directly improving the productivity of the private sector. [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]

This paper shows the construction of a growth model that includes public infrastructure and a related externality and investigates the dynamic properties of the model for a specific endogenous time preference function. After suggesting a saddle-path stability for long-term equilibrium under an endogenous time preference, numerical analysis of the model then reveals an unexpected relation between the strength of the externality, the magnitude of the rate of time preference, and the growth rate of the economy. In addition, it is found that multiple equilibria are unlikely to be supported empirically by the model in this paper. [ABSTRACT FROM AUTHOR]

Many studies have identified the negative effect of environmental regulation on capital accumulation and the positive effect on innovation, but this observed capital-innovation tradeoff due to environmental regulation lacks theoretical underpinning. We fill this gap by developing a unified two-engine endogenous growth model with environmental regulation, and show that a stringent environmental policy (in terms of pollution tax) leads to a sectoral reallocation from dirty inputs to clean final-good sectors, which increases the demand for R&D and activates the innovation engine. The capital engine depends on the elasticity of substitution between polluting and capital inputs. If both are sufficiently complementary, capital accumulation slows down. Another novelty of our model is that the contrasting responses of the two growth engines can lead to an inverted-U relation between overall GDP growth and environmental taxation. Our calibration shows that a well-designed environmental regulation can achieve a "double dividend": both improving the environment and enhancing economic growth and social welfare. Our empirical analysis provides macro-level evidence to justify our model prediction by using cross-country panel data. [ABSTRACT FROM AUTHOR]

This article theorizes path-dependent changes in the institutional architecture of the nuclear nonproliferation regime complex; it analyses the effects of different regime-complex structures on institutional contestation and policy adjustment. I first offer a general theory of how the preexisting institutional structures of international regime complexes (IRCs) facilitate and constrain subsequent institutional developments in ways that make IRCs prone to endogenous, path-dependent change. Next, I illustrate how strategies of regime shifting and rival regime creation in the nuclear nonproliferation complex have triggered path-dependent 'reactive sequencing', resulting in growing institutional fragmentation. To illustrate endogenous dynamics of IRC evolution, I examine the nuclear nonproliferation complex at three 'critical junctures': The mid-1970s, the end of the Cold War, and the early-2000s. During each period, exogenous proliferation shocks interacted with pre-existing institutional structures to produce specific patterns of contestation which set in motion a reactive sequence of growing institutional fragmentation. My argument has relevance for global economic governance broadly and for the growing IPE literature which explores reactive sequencing and institutional decay in global governance institutions. [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]

Data factors have become one of the five essential production factors, but their role in economic growth has always been ambiguous. Starting from AI technologies, this paper establishes an endogenous growth model of data factors affecting economic growth, constructs the generation path and value path of data factors, and estimates the value of new data factors at the provincial level in China from 1999 to 2018 accordingly. Based on theoretical analyses and empirical tests, it clarifies that data factors have a "two-dimensional driving effect" on China's economic growth, that is, data factors can drive growth both directly through its own economic growth effect and indirectly by promoting technological progress. Furthermore, this paper makes three extended discussions, aiming to make a trial study on the impacts of local government big data transaction platforms on data factors and their growth effects, discuss whether it is possible to reduce the uncertainties of local economic policy based on the nature of data factors, and make a preliminary survey of the output elasticity of data factors between 1999 and 2018. [ABSTRACT FROM AUTHOR]

The impact of health infrastructure on economic growth in the framework of endogenous growth models has been studied in a few research pieces; however, the impact of the Covid-19 pandemic on economic growth in the endogenous growth models has not yet been studied. The present article expands the existing pieces of literature in several ways. First, investigating the impact of the Covid-19 pandemic on economic growth in a steady-state situation. Second, identifying the threshold level of health infrastructure impact on long-term economic growth by considering the Covid-19 pandemic. Third, modeling of population dynamics and the Covid-19 pandemic. Fourth, modeling the level of following the protocols and public awareness of the Covid-19 pandemic and examining their impact on long-term economic growth. The developed model was calibrated using the information of a transition country, Iran. Results show if the health infrastructure is higher than the threshold level of 0.87, the output level will have an upward trend in the presence of the Covid-19 pandemic. Otherwise, the output trend will be downward. The increasing output could lead to the spread of the Covid-19 pandemic even in the long run in the Iranian economy. At a certain level of income, with the improvement of the health infrastructure, the level of Covid-19 pandemic release will decrease. [ABSTRACT FROM AUTHOR]

During World War II, the US government's Office of Scientific Research and Development (OSRD) supported one of the largest public investments in applied R&D in US history. Using data on all OSRD-funded invention, we show this shock had a formative impact on the US innovation system, catalyzing technology clusters across the country, with accompanying increases in high-tech entrepreneur-ship and employment. These effects persist until at least the 1970s and appear to be driven by agglomerative forces and endogenous growth. In addition to creating technology clusters, wartime R&D permanently changed the trajectory of overall US innovation in the direction of OSRD-funded technologies. (JEL H56, N42, N72, O31, O33, O38, R11) [ABSTRACT FROM AUTHOR]

By an endogenous growth model with two‐period overlapping generations structure and money holding of consumers, we examine the existence of budget deficit in an economy which endogenously grows by investments of firms. The main results are as follows. (1) Budget deficit is necessary for full employment under constant prices. (2) Inflation is induced if the actual budget deficit is greater than the value at which full employment is achieved under constant prices. (3) If the actual budget deficit is smaller than the value which is necessary and sufficient for full employment under constant prices, a recession occurs. Therefore, balanced budget cannot achieve full employment under constant prices. We do not assume that budget deficit must later be made up by budget surplus. This paper is an example of an analysis using a very simple model of the following statement by John Maynard Keynes. "Unemployment develops, that is to say, because people want the moon;—men cannot be employed when the object of desire (i.e. money) is something which cannot be produced and the demand for which cannot be readily choked off. There is no remedy but to persuade the public that green cheese is practically the same thing and to have a green cheese factory (i.e. a central bank) under public control." In the appendix of this paper, we show that if money as well as goods are produced by capital and labor, budget deficit is not necessary for full employment under constant prices. [ABSTRACT FROM AUTHOR]

We analyze a network‐based macroeconomic framework with the objective to analyze the effects that endogenous migration choices may have on the mutual relation between population dynamics and capital accumulation. In our economy population size determines the labor input which, together with the available capital stock, shapes total output. Production takes place with a convex‐concave technology allowing for a poverty trap. Migration depends on the origin‐destination income differential and affects the fertility rate. Thus population growth ultimately turns out to be endogenously dependent upon economic conditions. Such feedback effects between population and capital dynamics give rise to possible heterogeneity in the patterns of economic development, allowing to explain the large variability in the level of development between regions we generally observe at world level. We show that a higher degree of economic interaction improves economic outcomes at global level by allowing poor economies to escape their poverty trap, suggesting thus that promoting the formation of tight relations between countries may be an important policy option to favor economic development. [ABSTRACT FROM AUTHOR]

Using an endogenous growth model, Liu, Mian, and Sufi (2022) (LMS) show that a decline in the interest rate can lead to a fall in productivity growth and a rise in leader‐laggard productivity gaps and firm profits. We identify two issues in their quantitative analysis of transition dynamics: a time‐scale error and the omission of composition terms in calculating productivity growth along the transition to a new balanced growth path. Correcting the time‐scale error and including the composition terms, the decline in the interest rate that LMS study leads to a large and protracted productivity boom lasting about 20 years. In addition, the average leader‐laggard gap grows much more slowly than reported in their paper. We also point out an issue in their quantitative analysis of steady‐state profit shares. These issues are related to the quantitative exercises, and do not affect the key theoretical contributions of LMS. [ABSTRACT FROM AUTHOR]

The resurgence in space activities we are witnessing may provide opportunities for new technologies to generate potential spillovers to the real economy. To address this view, we propose a macroeconomic model with endogenous growth and a space sector. The model describes the relationship between space investment and technological spillovers, which support persistent economic growth. Our estimates indicate that space activities provide growth spillovers that peak from the late 1960s to the early 1980s. Recent space activities have a much lower economic impact. Finally, extensive experiments quantify the economic relevance of our results. [ABSTRACT FROM AUTHOR]

We employ a research and development (R&D) based growth overlapping-generations model with endogenous education decision-making and the government's education policy to examine how education policy and human capital accumulation influence R&D activities. According to our study, an increase in the government's public education expenditure has an inverted U-shaped effect on the steady-state growth rate. Moreover, a tax rate level that maximizes the steady-state growth rate exists. At this tax rate level, the steady-state welfare level is also maximized. [ABSTRACT FROM AUTHOR]

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 start from Robinson's article on Harrod's Dynamic Economics and her criticism that technological change was exogenous: 'in Mr. Harrod's world, technical progress falls like the gentle dew from heaven and is not susceptible to any economic influence'. Throughout her work she highlighted the endogenous sources of technological progress and growth and pre-empted both the National Systems of Innovation (NSI) literature and New Growth Theory (NGT), where the latter (NGT) appears to be neither new, nor able to explain innovation, growth and convergence trajectories. We also show that the productivity slowdown in advanced economies is explained by a fall in the wage share, a drop in the rate of accumulation of capital and prioritisation of incentives for R&D over policy instruments to diffuse innovation. While for developing economies, the failure of neoclassical economics to resolve the paradox of promoting market incentives for diffusion, while protecting intellectual property rights, implies an inevitable slowing of convergence. [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]

In practice, firms face a number of scarce innovation projects. They choose one towards which to direct their effort, but do not coordinate these choices. This gives rise to coordination frictions. This paper develops an expanding-variety endogenous growth model to study the implications of these frictions for growth and welfare. We find that the coordination failure generates a number of foregone innovations and reduces the economy-wide research intensity. Both effects decrease the growth rate. This creates a general equilibrium effect that endogenously amplifies the fraction of wasteful simultaneous innovation. Furthermore, formalizing the coordination frictions uncovers a novel link between the "stepping on toes" and "standing on shoulders" externalities—their magnitudes are endogenously determined through the ratio of firms to innovation projects. We find that the "stepping on toes" externality is larger for all parameter values. [ABSTRACT FROM AUTHOR]

I construct a hybrid model of endogenous and semi-endogenous growth to analyze the impact of labor reallocation between capital-augmenting R&D and final-goods production. By affecting the price of capital-intensive goods, factor-augmenting technical change or capital deepening will induce intersectoral labor reallocation between capital-augmenting R&D and final-goods production. The intersectoral labor reallocation in this paper can reverse some seemingly fundamental implications of the neoclassical growth models. In particular, given the gross complementarity of capital and labor, intersectoral labor reallocation implies that capital-augmenting technical change or capital deepening decreases the labor share, while labor-augmenting technical change increases the labor share. In the present model, a strengthening of the capital-augmenting R&D spillover effect helps to increase the importance of investment-specific technology and reduce the relative price of investment goods. [ABSTRACT FROM AUTHOR]

In an endogenous growth model, we characterize the conditions under which positional preferences for consumption and wealth do not cause inefficiency and derive an optimal tax policy response in cases where these conditions are not satisfied. The concerns for relative consumption and relative wealth partly emanate from social comparisons with people in other countries. We distinguish between a (conventional) welfarist government and a non-welfarist government that does not attach any social value to relative concerns. We also compare the outcome of Nash-competition among local/national governments with the resource allocation implied by a global social optimum both under welfarism and non-welfarism. [ABSTRACT FROM AUTHOR]

This paper extends the Marx-Keynes-Schumpeter model in Flaschel (2015) to study the social dimension of climate change. Agents are divided between those supporting and those opposing taxing Green House Gas (GHG) emissions. The composition of the population varies according to a continuous-time version of the discrete-choice approach. Conditional to the level of interaction between players, society chooses the respective carbon tax rate. Higher taxes reduce capital accumulation but support the development of energy-saving production techniques. Output growth and employment rates will be higher or lower depending on which effect prevails. Economic activity generates GHG emissions and determines the employment rate, which, in turn, endogenously feedback on environmental sentiments. Lower emissions reinforce sustainable attitudes, while falling employment increases households' concerns with more "urgent" needs, decreasing support for taxation. Hence, the model is compatible with a positive relationship between environmental attitudes and energy efficiency but not a clear association with output. A sufficiently strong response of attitudes to emissions combined with a "sentiments-autonomous" carbon tax may lead to the disappearance of the equilibrium in which most agents oppose regulation, controlling for multi-stability. Our 3-dimensional system admits endogenous persistent and bounded fluctuations, where the interaction between green attitudes and the macro-economy appears as a novel source of growth-cycle dynamics. [ABSTRACT FROM AUTHOR]

How do changes in labour taxes affect innovation and aggregate productivity growth? To answer this question, we propose a quantitative, general equilibrium growth model featuring product and quality innovation with endogenous market structure, estimate its parameters and provide empirical validation for the propagation mechanism of labour tax changes. We find that a temporary cut in flat-rate labour taxes produces a growth acceleration in aggregate productivity, permanently increasing the path of real GDP per capita. Moreover, such permanent gains are sizeable even without long-run growth effects. [ABSTRACT FROM AUTHOR]

We attempt to understand potential common forces behind rising market concentration and a slowdown in business dynamism in the US economy, through a micro-founded general equilibrium model of endogenous firm dynamics. The model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting "best-versus-the-rest" dynamics. We consider multiple potential mechanisms that can drive the observed changes and use the calibrated model to assess their relative importance, with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from frontier firms to laggard ones. We present new evidence that corroborates a declining knowledge diffusion in the economy. [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]

This study looks at the impact of non-oil revenue on Nigerian economic growth from 1981 to 2021. This study adopts endogenous growth model as its theoretical framework. The augmented Dickey Fuller test was used to determine whether each variable was stationary; the results showed that mining revenue is stationary at level, indicating that the series is integrated of order 0 i.e (I(0)), whereas real gross domestic product, agricultural revenue, manufacturing revenue and values added tax revenue are stationary at first difference, indicating that the series is integrated of order 1 (I(1)). Sequel to the result of the unit root test which showed that there is mixed level of stationary among the variables, the study employs ARDL estimation technique which is the technique that accommodates variables with mixed level of stationary. The result found that mining revenue, agricultural revenue, manufacturing revenue and values added tax revenue all contributes positively to economic growth of Nigeria. Based on these findings, Nigerian government should further develop the non-oil sector for it to generate more revenue which will spur economic growth, also the federal government of Nigeria needs to redouble its efforts to ensure the diversification of the nation's productive sector. [ABSTRACT FROM AUTHOR]

This article analyses the effect of population sorting on economic growth. The analysis is performed in a two-region growth model with endogenous fertility, in which public knowledge spillovers from the more advanced core amplify the productivity of investment in children's human capital in the periphery. I show how migration affects the inter-temporal evolution of human capital in each of the regions and the economy as a whole. I discuss how public policy interventions can help increase the per-capita human capital levels, if free uncontrolled migration leads to a reduction in human capital accumulation. I also analyse how migration and public policy interventions may affect population growth. [ABSTRACT FROM AUTHOR]

In this paper we present a model of economic growth with endogenous technical progress. We test if the neoclassical growth model accepts the assumption that capital intensity affects Total Factor Productivity (TFP) in the long run. Our view takes inspiration from Kaldor's growth model of 1957 in which the Technical Progress Function (TPF) responds to the joint behavior of capital intensity and inventiveness. We find that "movements along a production function cannot be distinguished from shifts in this function" as formalized by the TPF. The model is tested using a Structural VAR for 17 advanced economies, over the period 1980–2020. On impact, when capital intensity improves, TFP increases sharply. This response is large and persistent over time and explains about half as much as of measured TFP. It confirms that capital intensity is an omitted variable in the traditional scheme used to estimate technical progress. Notably, the standard neoclassical growth model is not consistent with this evidence. Our analysis also shows that demand shocks can have permanent effects on output and unemployment. Finally, monetary policy helps to stabilize the business cycle, but loses its effectiveness in the long run. [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]

Since the global financial crisis, South African fiscal authorities have acquired debt at a faster rate compared to other economies, which, according to recent growth theory, implies that the economy has a lower debt tolerance or threshold level than previously thought. Our study presents country-specific debt threshold estimates for the South African economy based on reduced form regressions derived from an endogenous growth model of public debt that incorporates public investment as a channel through which debt can influence economic growth. We estimate the reduced form regressions using the threshold nonlinear autoregressive distributive lag (t-nardl) cointegration model which we apply to quarterly time series spanning from 1960:q1 to 2020:q4. We identify debt thresholds of 47 percent which are much lower than those predicted by previous panel-based studies. Similarly, the corresponding public investment threshold estimate of 2.8 percent is lower than that prescribed by previous literature. However, our study shows that both public debt and public investment are too high to be growth enhancing and we provide policy recommendations based on these findings. [ABSTRACT FROM AUTHOR]

• Economic structure is endogenized in a coupled climate and economic dynamics model. • Climate change causes heterogeneous damage across sectors. • Economic structure evolves to adapt climate change. • Trade-off between high carbon capital goods and low carbon consumer goods was found. • Investment rate is sensitive to climate policy, mitigation can become more effective. This paper endogenizes economic structure in Nordhaus's standard DICE model, and builds a dynamic intertemporal optimization model to determine long-term CO 2 mitigation policy. Two basic macroeconomic sectors that vary in carbon intensity and suffer different damage from climate change are incorporated: one producing consumer goods, and another producing capital goods. The model finds a bidirectional interaction between climate change and economic structure. Climate change is able to reverse structure transition by decreasing investment rate. Meanwhile, economic structure evolution affects the choice of policies for managing climate change. Compared to the standard DICE model, our results show that we are likely to face a more severe climate situation; therefore, deeper mitigation efforts are called for, which requires investing an average of 3.2% of GDP per year for 2 °C warming goal. Mitigation efforts can become more effective for the economy as economic structure evolves and evokes future investment response, which will be determined not only by the normal intertemporal trade-off between present-day and future consumption, but also by another trade-off between high and low carbon-intensive goods. [ABSTRACT FROM AUTHOR]

This research develops an expanded unified growth theory that incorporates the endogenous accumulation of physical capital, population, human capital, and technology. The model incorporates a complementarity between physical capital and human capital and can be extended to a multi-country setting with international technology diffusion. The analytical characterization of the mechanisms behind the observed patterns of long-run growth and comparative development delivers a consistent explanation for a large set of seemingly unrelated empirical facts. A quantitative multi-country version of the model matches various empirical regularities of long-run growth dynamics and comparative development patterns that have previously been studied in isolation. The findings also shed new light on the role of the demographic transition for convergence patterns, the specification of cross-country growth regressions, technology spillovers, and the secular stagnation debate. [ABSTRACT FROM AUTHOR]

This paper explores the interaction between human capital and innovation in the process of economic growth. Using a model of endogenous growth, we focus on how taxes and other policy instruments affect the incentives to invest in human capital. In contrast to many other growth models we find that the taxation of human capital has a substantial negative effect on its accumulation. This in turn reduces innovation and, consequently, the income growth rate. More surprisingly, other policies that are intended to stimulate growth may have opposing effects on innovation and the accumulation of human capital. For example, while subsidies to research and to intermediate inputs do have positive effects on innovation and growth, they lead to a lower stock of human capital, in the empirically relevant case when the elasticity of intertemporal substitution in consumption is low. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of education of firm managers on labour productivity in Uganda's manufacturing sector using enterprise survey data. Like in many Sub-Saharan economies, Uganda is grappling with labour productivity associated with deficiencies and mismatch in skills, which limit the adaptation of new production technologies. The human capital theory (HCT) and the endogenous growth theory (EGT) underpinned this investigation. On the basis of a Cobb-Douglas function we estimated a labour productivity equation. The paper found that attainment of higher levels of education by firm managers improved labour productivity, and mean productivity of individual workers at firm level. The strong linkage between managers' education and labour productivity implies that the government should focus on policies that improve higher education. [ABSTRACT FROM AUTHOR]

This article quantifies the aggregate effects of firing costs in a model of firm dynamics where firm-level productivity is determined by innovation. In the model, the productivity distribution is endogenous, and thus, potentially affected by policy changes, allowing the model to capture both the static (allocative efficiency) and dynamic effects (changes in the distribution of firms' productivity) of firing costs. The model is calibrated to match key features of firms' hiring and firing behavior using firm-level data from Spanish nonfinancial firms. I show that firing costs equivalent to 2.5 monthly wages produce a 4% loss in aggregate productivity relative to the frictionless economy. The aggregate productivity losses rise to more than 10% when firing costs are equivalent to 1 year's wage. I show that a model with a standard AR(1) productivity process can only generate between 45 and 50% of these losses. Overall, the results suggest that ignoring the effects of frictions on the dynamics of firms' productivity can substantially underestimate their effects. [ABSTRACT FROM AUTHOR]