Growth (Economics)

Slow and steady wins the race? An appraisal of ten years of economic transition

by Francesco Pastore

Co-authored with Alina Verashchagina.
Economia Politica, 21(3): 437-458.

Slow and Steady Wins the Race? An Appraisal of Ten Years of Economic Transition Historically unprecedented transition... more Slow and Steady Wins the Race? An Appraisal of Ten Years of Economic Transition Historically unprecedented transition from a central planned to a market economy during the last decade took different forms and produced different outcomes across former socialist countries of Central and Eastern Europe and of the Commonwealth of Independent States. The Optimal Speed of Transition (OST) models elaborated over the 1990s to explain the process of transition provide a fruitful frame of mind. However, they leave unanswered important features of the reform process, such as the persistent output fall of some former Soviet Union countries. In fact, the OST literature adheres to the emphasis of the Washington Consensus on neglecting initial conditions across countries and the role of institutions in the well functioning of market economies.

Financialization and its Consequences: the OECD Experience

by Jacob Assa

Published in the journal Finance Research, Vol. 1, No. 1, January 2012

This paper examines the incidence and consequences
of financialization in the industrialized countries of the... more This paper examines the incidence and consequences
of financialization in the industrialized countries of the
Organization for Economic Cooperation and Development
(OECD). Using the latest panel data from the OECD and the
ILO, the paper first documents the extent of financialization in
OECD countries and then analyzes the relationships between
financialization and three other variables: inequality, growth and
unemployment. There is strong empirical evidence for
considerable financialization across the OECD, with significant
and negative impacts on all three variables.

TI - Inequality and Growth Re-examined

by Jacob Assa

Published in Technology and Investment, Vol.3 No.1, February 2012

This paper examines the relationship between income inequality and subsequent economic growth. It builds on the model... more This paper examines the relationship between income inequality and subsequent economic growth. It builds on the model suggested by Alesina and Rodrik (1994) in which inequality works through greater demands for redistribution to slow down growth, and the idea by Ray (1998) that inequality negatively affects savings, work capacity, economic incentives, and access to and efficiency of credit and financial markets. Using an updated dataset and seven model variants, both OLS and 2SLS regressions find a strong negative effect of income inequality on future growth. The effect is considerably stronger for developing countries, but the existence or absence of democracy has no effect on either the relationship between inequality and growth or on the rate of growth itself. There is also no support for Barro’s (2008) claim that inequality impacts growth positively in developed countries.

Economic polarization through trade

by Javier Sanchez-Reaza

Kaldorian approach to Greek economic growth

by Stavros Drakopoulos

Published in Applied Economics, vol.23, 1991
Co-Author, I. Theodossiou

In the last 30 years, Greece has experienced a rapid rate of economic growth which has
transformed the economy... more In the last 30 years, Greece has experienced a rapid rate of economic growth which has
transformed the economy and enabled it to become a member of the EEC. Specifically,
Greece transformed itself from an agricultural economy with virtually no industrial
base to an economy with a significant industrial sector and consequently a relatively
high income per capita. One can explain this on the lines of a Kaldorian framework. In
this paper we provide an outline of Kaldor's growth model and test its relevance to the
economic experience of Greece during the 1967-1988 period. The empirical results
suggest that the model can adequately explain the developments in the economy to a
considerable degree.

Spillovers Diffusion and Regional Convergence: A Gravity Approach

by Gianni Guastella

co-authored with Francesco Timpano

Among the different sources of regional growth, agglomeration economies, both internal to
regions and external to... more Among the different sources of regional growth, agglomeration economies, both internal to
regions and external to regions (spillovers) play a primary role. However the presence of
agglomeration economies may obstacle the path toward cohesion making rich (poor) regions
become richer (poorer). While, according to New Growth Theory and New Economic Geography,
there is no doubt that internal economies may lead to divergence, the debate on the role of
external economies on convergence is still open. Much, of course, depends on the spatial extension
of spillovers. The aim of this work is to study the spatial dimension of spillovers using the
framework of cross-region growth regression. In particular we seek to explain whether the
intensity of spillover is either completely exogenous or it can be explained by some endogenous
regional characteristics. Results indicate that the intensity of externalities is determined by a) the
regional geographical position and b) the distance from neighbors with high growth rates. While
the first is completely exogenous, the second is not. Curiously enough, infrastructural endowments
and factors commonly assumed to induce agglomeration do not contribute to explain the intensity
of spillovers. Results have important policy implications. Since spillovers characterize more core
regions, which are well connected to other rich regions, than periphery, the presence of these
externalities may foster the increase of disparities between core and periphery, making harder to
reach the objective of cohesion.

Spillover diffusion, agglomeration and distance: a spatial extension of the knowledge production function approach

by Gianni Guastella

Explaining TFP Growth rates: Dissimilar effect of openness between different income groups of countries,

by German H. Gonzalez