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On the mechanics of economic development

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... Higher schooling investments translate into higher average human capital. Since human capital has been identified as the main driver of productivity growth through various channels (Lucas, 1988;Romer, 1990;Strulik et al., 2013;Gennaioli et al., 2013), this raises the probability for entrepreneurs to establish a profitable firm that is successful in exporting to other countries. ...
... Related to this point, Colombo et al. (2004) show that the human capital level of founders of firms is positively correlated with the initial size of the firm. Yet another channel is based upon positive external effects of human capital in (team) production, which are observationally equivalent to an increase in productivity (Lucas, 1988;Battu et al., 2003;Munch and Skaksen, 2008). ...
... This treatment formalizes the notion that the probability to draw a high productivity firm is not exogenousas in Melitz (2003) but influenced positively by the level of education in an economy. As explained above, this is so because of better technologies as discovered by well educated scientists (Romer, 1990;Strulik et al., 2013) and/or because higher education of the manager increases the probability to draw a higher productivity for the firm (Cabral and Mata, 2003;Bhattacharya et al., 2013;Gennaioli et al., 2013) and/or because of knowledge spillovers between employers (Lucas, 1988;Battu et al., 2003;Munch and Skaksen, 2008). ...
... The theory contrasts with the growth theory of neoclassicism, which states that the main sources of economic growth are external factors, such as technological progress. The theory of endogenous growth was developed by Robert Emerson Lucas Jr. (1937) and Paul Romer (1955), who also put forward a mathematical technological explanation for economic growth (Lucas, 1988). In 1988, Lucas published an article "On the Mechanics of Economic Development", outlining the changes made to the Solow-Swan model. ...
... Lucas helped to break down the barrier between the economies of economic development (relating to poor countries) and economic growth (studying growth in rich countries). He argued that the same basic economic system should be applied to everyone and that it is important to understand how poor countries could grow (Lucas, 1988). Lucas points out the need to integrate the basic ideas of human capital presented by Schultz (1963) andBecker (1964), thus making them similar to the models of Arrov (1962), Uzava (1965 and Romers (1986) (Lucas, 1988). ...
... He argued that the same basic economic system should be applied to everyone and that it is important to understand how poor countries could grow (Lucas, 1988). Lucas points out the need to integrate the basic ideas of human capital presented by Schultz (1963) andBecker (1964), thus making them similar to the models of Arrov (1962), Uzava (1965 and Romers (1986) (Lucas, 1988). His model envisaged a new concept of human capital, skills and knowledge that would make employees more productive. ...
Article
Rapid economic growth is a relatively recent phenomenon, which has been examined since the end of the 18th century. In the scientific literature researchers use the concept of “economic growth” and “economic development” when analyzing economic processes. “Economic growth”, as defined by Paul M. Romer occurs whenever people use resources and rearrange them in more valuable ways. Thus, economic growth means an increase in a real national income / national output. In contrast, economic development is an improvement of the quality of life and living standards, e.g. improvement of literacy, life expectancy, and approach to environmental issues. Economic development encircles a wider range of metrics than just gross Domestic Product (GDP) per capita, it is about actual standard of living, level of environmental standards, availability and quality of housing and other aspects. The article analyzes, compares and evaluates theories of economic growth and economic development in the context of sustainable development.
... The growth gain from trade will be fully reflected once an economy has an adequate stock of human capital. A successful policy of trade liberalization plays a critical role in 3 These theoretical frameworks are mostly rooted in the closed economy endogenous growth models of Romer (1986) and Lucas (1988 (2014) have enlightened human capital issue in the trade-growth empirics in India. Few studies (Haq and Luqman, 2014;Jadoon et.al., 2015;Mustafa, Rizov, and Kernohan, 2017) have addressed the issue in the context of a panel of Asian countries including India as one of the sample countries. ...
... The export, import are used as the measures of trade and for the human capital different proxy measures are used. In Lucas (1988) study, human capital is denoted by the effective labour for the economy, is denoted by ( ℎ ) where is the fraction of non-leisure time house hold spends on working, ℎ is average quality of works, and is labour force of the economy 8 . We may elaborate the functional relation of Equation (1) as: ...
... Different versions of the endogenous growth theory (Lucas, 1988;Romer, 1990a;Grossman and Helpman, 1991;Mankiw et al., 1992) advocate that human capital is a significant bearing of economic growth. Substantial empirical research, since the last few decades, testifies theoretical deliberation of the endogenous growth process. ...
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This study revisits trade–growth dynamics in India augmenting the role of human capital for the liberalised trade regime. The autoregressive distributed lag-bounds testing approach finds cointegrating relation of income with the different combinations of export, import, exchange rate, trade openness, education and health dimension of human capital. The long-run and short-run dynamics of such relations confirm that both export and import enhance income growth that testifies export-led and import-led growth premises. Trade openness proves detrimental to growth, while human capital spurs growth. However, the growth gains from the human capital vary across alternative measures of human capital. A battery of diagnostic tests corroborates these inferences robustly. Policy manifestation for trade promotion might be beneficial for higher economic growth in India. JEL Codes: F43, F13, F14, O24
... Since the work of Romer (1986) and Lucas (1988), which is the pioneer study that initiated the endogenous growth theory, the earlier perspective on the role of government has drastically changed. The endogenous growth theory provides a theoretical framework for analyzing growth that is determined by the system governing the production process, rather than forces outside the system, (Todaro and Smith 2003). ...
... In the theoretical literature, Brons, de Groot and Nijkamp (1999) has employed the reasoning based on the work of Romer (1986) and Lucas (1988) to show that not only transition growth 5 rates are endogenous but also steady state growth rates. Governments can influence these growth rates either directly and indirectly, these have major consequences for standards of living. ...
... Cette situation peut aussi être expliquée par la faiblesse des revenus des agents. Ce résultat n'est pas conforme à ceux de (Lucas, 1988) et (Khemakhem, 2013), pour qui, il existe une relation entre épargne et investissement, une augmentation du taux de l'épargne augmente le taux de croissance de l'économie. L'ouverture commerciale impacte positivement le PIB. ...
... Le signe attendu est positif.  La variable EBM représente l'épargne brute des ménages (en milliards de DA).(Lucas, J R, 1988) affirme qu'une augmentation du taux de l'épargne augmente le taux de croissance de l'économie. Le signe attendu est positif. ...
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RESUME Ce document examine la relation entre l'inclusion financière et la croissance économique en Algérie durant la période 2004 à 2019. Nous avons fait appel à l'analyse descriptive et économétrique en s'appuyant sur le modèle autorégressif à retards échelonnés pour déterminer la relation de court et long terme de la variable supposée dans le cadre de cette étude représentative de l'inclusion financière en Algérie. Les résultats de l'étude font preuve que le l'inclusion financière a un effet positif sur la croissance économique en Algérie sur le long et court terme. ABSTRACT This paper examines the relationship between financial inclusion and economic growth in Algeria during the period 2004 to 2019. We used descriptive and econometric analysis based on Autoregressive distributed Lag (ARDL) model to determine the short and long run relationship of the assumed variable in this study representative of financial inclusion in Algeria. The results of the study demonstrate that financial inclusion has a positive effect on economic growth in Algeria in both the long and short run.
... C'était en opposition avec le concept de croissance économique de Robert Solow des années 1950, selon lequel, sur le long terme, la croissance est exogène, principalement expliquée par le progrès technologique ou les augmentations de productivité produites par les efforts de gestion ou d'organisation. Lucas(1988) et Romer(1986) apportent une contribution significative en démontrant que les taux de croissance à long terme sont le résultat des facteurs humains (compétences et qualifications des individus) et des facteurs de production propres à un pays donné (Lucas Jr, 1988;Romer, 1986). Ils ont ouvert la voie à davantage de recherches sur les facteurs (capital humain comme les connaissances et la qualité de la main-d'oeuvre) qui influencent la ...
... C'était en opposition avec le concept de croissance économique de Robert Solow des années 1950, selon lequel, sur le long terme, la croissance est exogène, principalement expliquée par le progrès technologique ou les augmentations de productivité produites par les efforts de gestion ou d'organisation. Lucas(1988) et Romer(1986) apportent une contribution significative en démontrant que les taux de croissance à long terme sont le résultat des facteurs humains (compétences et qualifications des individus) et des facteurs de production propres à un pays donné (Lucas Jr, 1988;Romer, 1986). Ils ont ouvert la voie à davantage de recherches sur les facteurs (capital humain comme les connaissances et la qualité de la main-d'oeuvre) qui influencent la ...
... Así mismo, en la misma corriente de crecimiento endógeno, un importante aporte es la acumulación endógena de capital humano, físico y del trabajo, esto explicaría la productividad conjunta del capital, si este se midiese simplemente por el número de horas o personas que trabajan, destacándose los aportes de Arrow, Schultz, Becker, Ben-Porath, Phelps, Tamura y Uzawa, y siendo Introducción Lucas (1988Lucas ( , 1993Lucas ( , 2002, quien lo desarrolla excepcionalmente (Posada, 2015). Mujica (1991) identifica e indica dos implicaciones relevantes, de Lucas (1988) relacionando el capital humano y el crecimiento. ...
... El modelo se valida con los supuestos sugeridos por la metodología econométrica de Gujarati (2009). Los postulados de la teoría económica proponen que los coeficientes de asegurados INSS del sector construcción e importaciones por unidad de capital para la construcción presentan signo positivo (Lucas, 1988;Solow, 1956;Swan, 1956) por su relación complementaria entre sí y su efecto positivo en la producción. En cambio, se espera signo negativo para la variable área efectivamente construida, por la presencia de rendimientos decrecientes en la acumulación de capital (Cass, 1965;Koopmans, 1965;Ramsey, 1928). ...
Article
La teoría de crecimiento endógeno explica la relación de las variables renta per cápita (PIB per cápita), en relación al sector de construcción de edificaciones privadas, incorporado este enfoque al análisis nicaragüense, a través de los asegurados INSS, área efectivamente construida e importaciones por unidad de capital para la construcción. Durante el periodo 2006-2019 el PIB per cápita nicaragüense presentó tendencia creciente, así mismo los asegurados INSS del sector, con leve inflexión a la baja en el 2009, en cambio las áreas efectivamente construidas de edificaciones privadas presentan fluctuaciones con caída sustancial en 2009, 2010 y 2018. Por otro lado, las importaciones por unidad de capital para la construcción reflejan una contracción en 2009, posteriormente reflejó tendencia creciente, exceptuando 2018. La estimación econométrica identifica la tipología de estudio con enfoque cuantitativo, de alcance explicativo, evidenciando los postulados de las teorías de referencia, siendo relevante el resultado de la variable área efectivamente construida, la cual ejerce efecto negativo en la variable dependiente.
... This view was propagated by Lucas(1988) and Romer (1990) and is a critical characteristic defining "new growth theory." However, human capital is recognized as an ordinary factor of production unable to generate endogenous growth. ...
Article
In the recent years policies makers are increasingly turning to tourism as a viable economic development strategy, as many communities experience industrial restructuring. There are several new and socially and environmentally untouched communities and regions are exposed to tourism for the first time and established destinations experience increasing volumes of tourists searching for the authenticity of a new culture and society and for an exotic experience. This paper analyzes tourism from a resource and risk point of view. This paper explains the case of tribal tourism in Odisha and some ethical issues related to this type of tourism. It also tries to analyze the pros and cons of this type of tourism in tribal regions of Odisha and India.
... It increases the productive capacity of people and also contributes to technological advancement in the economy. A study conducted by Lucas (1998) revealed that the higher the level of education of labour forces in a country the higher the productivity of the country. This assertion can be attributed to the fact that the more educated a person is, the more likely he or she will be innovative and it is an innovation that drives the development of an economy. ...
... Sayfa 25 | 2020; 1 (1); Howitt (1992)'in tarafından geliştirilerek ekonomik büyüme oranını artıran Ar-Ge'deki kaynak artışının, ölçek etkileri ele alınmaktadır (Jones, 1995: 761). Lucas (1988) ise modelinde Romer in modeline beşeri sermayeyi eklemiştir. Lucas modelinde beşeri sermaye içsel faktör olarak ele alınmaktadır. ...
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Endüstri 4.0 ya da Sanayi 4.0 devrimi küreselleşen dünyada rekabet artışına neden olmaktadır. Ülkelerin bu rekabet ortamında yarışabilmesi iktisadi büyümeyi sürekli hale getirebilmesi ancak verimliliği artırmakla yakalanabilmektedir. Bu durum Türkiye ve onun gibi gelişmekte olan ülkeler açısından Endüstri 4.0 ve lokomotifi Ar-Ge harcamalarını çok önemli kılmaktadır. Bu bağlamda çalışma Türkiye'de 1990-2018 arası yıllarda Ar-Ge harcamaları ile büyüme arasındaki ilişkiyi analiz etmeyi amaçlamaktadır. GSYİH (Gayri Safi Yurtiçi Hasıla) bağımlı değişken, Ar-Ge harcamaları ide açıklayıcı değişken olarak belirlenmiştir. FMOLS ve DOLS yöntemleriyle tahmin edilen uzun dönem katsayılarına göre Ar-Ge harcamalarındaki %1'lik bir artış sırasıyla GSYİH'da % 1,16 ve %1,006'lık bir artışa neden olmaktadır. Son olarak uygulanan Granger nedensellik testine göre uzun dönemde Ar-Ge harcamalarından ekonomik büyümeye doğru tek yönlü ilişki tespit edilmiştir. Abstract Industry 4.0 or Industry 4.0 revolution leads to an increase in globalized competition. Countries can compete in this competitive environment, sustaining economic growth can only be achieved by increasing productivity. In this case, developing countries such as Turkey and in terms of its industrial R & D spending by 4.0 and locomotive makes it very important. In this context, working with R & D expenditure in the years between 1990-2018 in Turkey aims to analyze the relationship between growth. GDP (Gross Domestic Product) is determined as the dependent variable and R&D expenditures as the explanatory variable. According to the coefficients estimated with FMOLS and DOLS methods, an increase of 1% in R&D expenditures in the long term causes an increase of 1.16% and 1.006% in GDP. Finally, according to the Granger causality test, a one-way causality relationship from R&D expenditures to economic growth in the longrun was found to be significant.
... Among these students' level factors, this study investigated the effects of students' psychological capital on their academic performance. It is broadly accepted that the human capital is most significant predictor of performance (Becker,1964;Lucas, 1988;Romer, 1990). For a person to be productive and perform well, they need to have a certain amount of social capital, which includes relationships, networks, and friendship ( Nahapiet & Ghoshal, 1998;Brown and Ashman, 1996;Knack and Keefer, 1997). ...
... O teste da hipótese de convergência absoluta Baumol (1986) consistia no ajustamento de regressões entre países, relacionando a taxa de crescimento média da renda per capita, para um período de tempo fixo, ao nível de renda per capita inicial e características dos países. Nesse âmbito , Lucas Jr (1988) foi o responsável por demonstrar o papel e a importância do capital humano na produtividade da economia, introduzindo assim o fator educacional nas análises de convergência. E, em suas conclusões, Romer (1990) argumenta que a implicação positiva mais interessante de seu modelo é o fato de que uma economia com um maior estoque de capital humano está correlacionada com maiores taxas de crescimento. ...
Article
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O presente artigo fez uso dos modelos de convergência para investigar se há convergência no desempenho das escolas públicas do Estado nos indicadores de qualidade, bem como estimar quantos anos serão necessários para que as escolas de pior desempenho alcancem o nível de qualidade das escolas melhor classificadas. Os dados foram obtidos do (INEP), onde constam informações do Censo Escolar da educação básica para o período de 2005 a 2017, e as notas do (IDEB). Os resultados indicaram que há convergência absoluta e condicional no período, ou seja, as escolas que no início do período apresentavam os piores desempenhos apresentam um crescimento na qualidade com uma velocidade maior que as que já apresentavam melhores resultados. Com os controles fixos de tempo, observou-se uma redução significativa da meia-vida sendo possível dessa medida ser alcançada em um ciclo educacional para essa faixa educacional. Os resultados apontam que as ações de políticas educacionais implantadas no estado podem servir de referência para que com as devidas adaptações às peculiaridades de cada estado possa contribuir para a elevação da qualidade do ensino fundamental nas demais unidades da federação permitindo acelerar a universalização do ensino público de qualidade no país.
... O teste da hipótese de convergência absoluta Baumol (1986) consistia no ajustamento de regressões entre países, relacionando a taxa de crescimento média da renda per capita, para um período de tempo fixo, ao nível de renda per capita inicial e características dos países. Nesse âmbito , Lucas Jr (1988) foi o responsável por demonstrar o papel e a importância do capital humano na produtividade da economia, introduzindo assim o fator educacional nas análises de convergência. E, em suas conclusões, Romer (1990) argumenta que a implicação positiva mais interessante de seu modelo é o fato de que uma economia com um maior estoque de capital humano está correlacionada com maiores taxas de crescimento. ...
Article
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Resumo O presente artigo fez uso dos modelos de convergência para investigar se há convergência no desempenho das escolas públicas do Estado nos indicadores de qualidade, bem como estimar quantos anos serão necessários para que as escolas de pior desempenho alcancem o nível de qualidade das escolas melhor classificadas. Os dados foram obtidos do (INEP), onde constam informações do Censo Escolar da educação básica para o período de 2005 a 2017, e as notas do (IDEB). Os resultados indicaram que há convergência absoluta e condicional no período, ou seja, as escolas que no início do período apresentavam os piores desempenhos apresentam um crescimento na qualidade com uma velocidade maior que as que já apresentavam melhores resultados. Com os controles fixos de tempo, observou-se uma redução significativa da meia-vida sendo possível dessa medida ser alcançada em um ciclo educacional para essa faixa educacional. Os resultados apontam que as ações de políticas educacionais implantadas no estado podem servir de referência para que com as devidas adaptações às peculiaridades de cada estado possa contribuir para a elevação da
... Inclusion of human capital altered the empirical modelling, but also the theoretical modelling of economic growth. At the theoretical level,the inclusion of human capital altered the notion of diminishing returns to reproduceable capital, which became constant returns to broad capital (Lucas, 1988). However, Mankiw et al. (1992) preserved the notion of diminishing returns to all capital in their modelling, assuming that ...
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In order to achieve the target profit, it is necessary to manage costs and sales revenues as efficiently as possible. With this in mind, this paper focuses on the specifics of operating cost management in trade with special reference to Serbia. Among other things, the analysis of the efficiency of operating cost management in Serbian trade is based on the Super Radial DEA model. Consequently, according to Super Radial CCR-I and Super Radial CCR-O, efficient management of trade operating costs in Serbia was only in 2014, and inefficient in other years. According to Super Radial BCC-I, efficient management of trade operating costs in Serbia was in 2013, 2014 and 2020, and inefficient in other years. According to Super Radial BCC-O, efficient management of trade operating costs in Serbia was efficient in 2013, 2014 and 2015, and inefficient in other years. In order to improve the efficiency of operational cost management, as well as the overall business, in Serbian trade it is necessary, by applying modern concepts of cost management (for example, costing by activities) and new business models. organic products, etc.), more efficiently manage input elements (real growth rate of gross domestic product, number of employees, assets, capital, employees' salaries, purchase value of sold goods and operating costs), as well as output (sales, margin and net profit) .
... Od wczesnych lat 90. prowadzono badania w celu identyfikacji determinant wzrostu gospodarczego, zakładając, że długookresowy wzrost ma charakter endogeniczny, a nie egzogeniczny [Lucas 1988]. Lepiej wykształcona siła robocza jest bardziej mobilna i elastyczna, łatwiej uczy się nowych zadań i nowych umiejętności, może korzystać z szerszego zakresu technologii (w tym nowo powstających) i specjalistycznego sprzętu, i jest bardziej kreatywna. ...
... Governments identify this issue as a very slow growth rate of investment in research and development (Dulaimi et al., 2002). The endogenous growth (Romer, 1986(Romer, , 1990Lucas, 1988;Krugman, 1991) is conditioned by an excess amount of knowledge from the outside, which constitutes an important source of innovation (Csugány, 2018). These external sources mould the speciÞ c region, engendering its faster growth rate. ...
Article
As regards the relationship between changes in the structure of innovative marketed production and the structure of innovation expenditure, the efficiency of generating direct physical production capital and social capital in Polish industry has a decisive role. Since the rate (pace) of growth in innovative marketed production and the rate (pace) of growth in physical capital are determined by the milieu of a particular enterprise and are not dependent on enterprises, the only variable explaining the rate of innovation growth is the rate (pace) of growth (in the value) of expenditure on human capital in Polish industry in 2005–2013. The results of the survey show that the rate (pace) of growth (in the value) of expenditure on human capital was executed most extensively in Polish industry in 2010–2013, whereas in 2006–2009 this rate (pace) was shaped to a limited extent. As there was no uniform flow of expenditure on human capital, the total value of innovations created in Polish industry in the years analysed was limited.
... The availability of workers is not only represented by large quantities and low cost, but high productivity, ceteris paribus. Lucas (1988) argued that human capital accumulation had an internal effect (affects on one's productivity) and external effects (contributes to the productivity of all production factors). Third, the large amount of domestic capital attracts foreign investors because FDI and domestic capital are complementary in the production process (Clegg & Scott-Green, 1999;Naude & Krugell, 2007;Obwona, 2001). ...
... Trying to open the black box of Solow's residual, a new generation of growth models appeared in the mid 80's, known by the Endogenous Growth Models. Pioneered by Romer (1987Romer ( ,1990 and Lucas (1988), the Endogenous Growth Models-starting from the AK models all the way to the different types of the Innovation based Endogenous Growth Modelfocused on endogenizing the production of technology by introducing the accumulation of human capital, Investments in the creation of knowledge through R&D, openness of trade and FDI as a channel for technology transfer, and investment in public financed goods. Examples of these kinds of models include Grossman & Helpman (1991), Aghion & Howitt (1992), and Barro and Sala-I-Martin (1992). ...
... Yet there are other papers that simply ignore the impact of finance on economic growth. Lucas (1988) argues that economists exaggerate the impact of finance on growth. Both Stern (1989) and Chandavarkar (1992) ignore the role of the financial system in economic growth as well. ...
Article
In this study, first we look at the relation between countries’ income levels and their banking systems. What are the differences between richer countries and other countries in terms of their banking systems? Then, we look at how OECD membership affects the banking system of a country. When we compare High-Income countries to Middle- and Low-Income countries, we find that workers’ remittances are much higher in Low- and Middle-income countries. The banking industries are much more concentrated in High-Income countries. Bank deposits are also significantly higher in these countries. The banking systems in these countries have more risk compared to their counterparts in other countries. Non-resident banks are more active in High-Income countries. Also, there is more interest in offshore accounts and the banks are more engaged in international transactions. When we compare high-income OECD-member countries to high-income Non-OECD-member countries, we find that the banking industries in high-income Non-OECD-member countries are much more concentrated when compared to their counterparts in High-Income OECD countries. In High-Income Non-OECD countries, non-resident banks are more active and there is more interest in offshore accounts. On the other hand, bank deposits are higher in High-Income OECD countries. But, the banks in these countries are in greater risk compared to the banks in Non-OECD countries (i.e. liquid liabilities are higher). We conclude that policymakers need to consider OECD membership and income level as determinants of a country’s banking system.
... The scholars and researchers seem to be divided upon two different dimensions of thoughts in the question of whether there is link between financial or banking sector development and economic growth. Schumpeter (1934), Goldsmith (1969), McKinnon (1973), Shaw (1973) and King and Levine (1993) conclude finance to be an integral part of economic growth whilst Robinson (1952) and Lucas (1988) thought the other class exaggerated the role of finance and decided that it is only a minor growth factor. Barro (1991), Khan and Senhadji (2000) and Chuah and Thai (2004) further inspected the analyses done by the other scholars and concluded that some of those have several econometric problems. ...
Article
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According to Joseph Schumpeter (1911), services provided by financial intermediaries are essential for technical innovation and economic growth. Later, empirical work by Goldsmith (1969) and McKinnon (1973) supported that there were close ties between financial and economic development for a few countries. But numerous other economists, including Robinson (1952) believed that finance was not so important for economic growth; financial development simply follows economic growth. Despite this debate, Levine (1993), among others suggests a positive relationship between financial sector development and economic growth. Moreover, there remains further debate whether the country's financial structure exerts differential impact on economic growth. Empirical studies across the countries (Rajan and Zingales, 1999) suggest that banking sector plays a key role in some countries. In this paper, I intend to investigate whether higher levels of financial development are positively correlated with economic growth using empirical evidence from five South Asian countries namely Bangladesh, India, Nepal, Pakistan and Sri Lanka. I have used Panel data analysis, Linear regression model, Levin-Lin-Chu unit root test, Covariance, Correlation and VIF test based on aggregate annual data from 1993 to 2016. My analysis suggests that development in banking sector has a moderately strong tie to promoting economic growth. The result implies that the policy should focus on banking sector development by enhancing its quality of credit products and offers to private sector as it is the main stimulator for growth in these five South Asian countries.
... This implies that, in the economic world described by Solow's model, the growth of per-capita income is unsustainable. To overcome the dilemma of Solow's model, motivated by Arrow's learning by doing (Arrow 1962), Lucas (1988), Romer (1986Romer ( , 1990, and Barro (1990) endogenized the technology factor. Following their models, the technology factor will persistently rise with knowledge accumulation so that the growth rate of per-capita income is always higher than zero. ...
Preprint
This paper provides attempts to formalize Hayek’s theory of knowledge. It has been theoretically shown that exponential income distribution is a spontaneous order of the well-functioning market economy. We show that this theoretical result is supported by the empirical evidence from the United Kingdom and China. In particular, we empirically show how the income structure of China evolved towards an exponential distribution after the market-oriented economic reformation. Furthermore, we strictly prove that, if the income structure of an economy obeys an exponential distribution, the income summation over all households leads to an aggregate production function with Hicks-neutral-like technical progress, in which the technology factor is exactly equal to society’s information stock that is a result of combining all of decentralized decisions.
... Yang Yi et al. verified that higher education can cultivate high-level human capital, and then promote regional economic development (Yang, Y., Hu, J.-N., & Tan, N., 2021). regards human capital as a key production factor alone, which provides an effective impetus for economic growth, and proposes that the acquisition of human capital can be achieved not only in production practice, but also through school education (Lucas, R., 1998;Wang, F.-Y., 2020). Through the analysis of the above models, it can be concluded that human capital is an important factor to promote economic development, and higher education is one of the key ways to improve the quality of labor. ...
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The development of higher education and opening to the outside world are important factors in promoting China's economic growth. On the basis of clarifying the relationship between the three, based on the economic and social statistics of 290 prefecture-level and above cities in China from 2003 to 2018, this paper constructs a panel model to test the role of higher education development on regional economic growth and the mediating role of urban opening up between the two. The study found that: in the past 15 years, the improvement of the development level of higher education can not only directly promote the growth of the regional economy, but also indirectly promote the growth of the regional economy by improving the level of urban opening to the outside world. It is suggested that the high-quality development of higher education should be continuously promoted, and the opening-up efforts should be increased in order to achieve the strategic goal of high-quality economic and social development.
... Their research focused on trying to assess the impact of education on economic growth. Names such as B. Weisbrod (1962), H. Uzawa (1965), Nelson andPhelps (1966), Y. Ben-Porath (1967), R. Lucas (1988), S. Rebelo (1991), J. Laitner (1993), Bils and Klenow (2000), R. Barro (2001), J. Temple (2001) and many others (Cichy 2005) can be cited here. ...
... A study by Mankiw et al. (1992) incorporates the role of human capital in the Solow model but with an assumption of diminishing returns to human capital. Endogenous growth theories highlight the role of human capital, knowledge, ideas production, and innovation through positive externalities and spillovers as a source of technological progress (Romer, 1986;Lucas, 1988;Grossman and Helpman 1991;Aghion and Howitt, 1992b). In contrast to neoclassical growth theories, endogenous growth theories assume non-diminishing returns to human capital. ...
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The present research analyzes the nexus between export upgrading and economic growth. In addition, it studies the moderating role of economies’ level of openness to international trade between export upgrading and economic growth for a group of 131 countries covering the period of 2006-2019. The Generalized Method of Moment (GMM) is used for empirical analysis in STATA. Findings of this study express that export upgrading has a positive impact on economic growth. However, empirical results based on the developed and developing countries, show that although export upgrading has a positive impact on economic growth in developing economies, its effect is insignificant for developed economies. Unlikely, trade openness enhances the impact of export upgrading on economic growth in developed economies, however; it reduces this impact in developing economies.
... Insufficient capital formation has been cited as the main obstacle to sustainable economic growth (Owolabo & Ajavi, 2013). Growth models such as those developed by (Romer, 1986;Lucas, 1988) predict that an increase in capital accumulation can lead to a permanent increase in growth rates. Several studies examining the link between capital formation and growth have come to the same results as ours: Bal, Dash and Subhasish (2016); Erum and Hussain (2019); Awodumi and Adewuyi (2020) have all shown that capital formation affects and/or positively impacts economic growth. ...
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Due to fixed interest and fixed income, bonds are considered excluded in the Islamic financial system. The sukuk were then designed as an alternative to these bonds, meeting the needs of all investors seeking instruments that comply with Islamic law (Shari’ah). Sukuk are considered to be the cornerstone of the Islamic financial industry, playing an important role in mobilizing funding and interaction resources for various actors and investment projects. In addition, the sukuk market as the most popular and sophisticated financial market continues to grow, now constituting a very important source of funds and capital for many governments and companies. The recent development and research on Islamic bonds have shown the importance of this instrument as an alternative to conventional bonds. The objective of this paper is to empirically test the impact of sukuk on the economic growth of Malaysia and Bahrain between 2001-2018. The data were obtained using Bloomberg and World Bank Database. Our results show a positive impact of sukuk on economic growth.
... The other selected variables are all expected to impact economic growth. According to the economic literature, economic growth is affected by the level of public spending (Landau, 1983;Barro, 1991;Morley & Perdikis, 2000), savings (Lucas 1988;Ribaj & Mexhuani, 2021), credit granted to the private sector and to households (Bui, 2020;Amoo et al., 2017;Korkmaz, 2015;Yahaya, 2015), trade openness (Michaely, 1977;Kormendi et al., 1985;Frankel et al., 1995;Allen & Ndikumana, 2000;Asselain & Blancheton, 2006), and interest rates (Lucian-Liviu, 2006;Obamuyi & Olorunfemi, 2011;Saymeh & Orabi, 2013) ...
... Additionally, we have also noted that a one percent increase in HC will lead to a 1.78 percent increase in economic growth. Based on the endogeneous growth theory, HC is the key component of economic development that leads to higher growth rate (Lucas, 1988;Romer, 1990). Majority of the studies reviewed support that HC positively influent economic growth, employability of the person, behavior of society to facilitate a gracious social, as well as the political and economic environment that encourage domestic and foreign investment to the nation. ...
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This study investigates the effects of rent seeking activities on economic growth in 53 middle-income countries. Our data spans the period 2011 to 2020. We use the generalized method of moments estimator to examine the effects of rent-seeking activities on economic growth. Our study also includes several control variables, namely democratic accountability, public debt, human capital, foreign direct investment, capital stock, population, research and development expenditure and trade openness. The empirical results suggest that rent-seeking activities impede economic growth in middle-income countries.
... In the Romer-Lucas model of growth, unlike the Solow-Swan growth model, technological change is not exogenously determined but it is derived from the capital accumulation process. Accumulations of capital goods that are used to produce consumer goods enable workers to learn how to operate high technology machinery and modify them (Lucas, 1988). Such a learning process allows technological advancement. ...
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One of the important issues that persist in the economic literature is the relationship between foreign trade, foreign direct investment and economic growth in host countries. This issue has become renewed interest in recent years mainly for countries suffering from unemployment problems and lack of technological progress. This paper analyzed this issue for Nepal using time series data over the period of 1995-2020.The ARDL bound test approach to co-integration has been used to analyze long-run and short-run relationship between variables. The study found that there is a co-integration between foreign trade, FDI and economic growth. The study also found that there is a strong positive interaction between foreign trade and FDI in progressing economic growth both in the short-run and long-run. The results show that the foreign trade and FDI can play a significant role to accelerate the economic growth of Nepal.
... Beşeri sermaye eğitim ve öğretimin ekonomik potansiyelinin olan bir metafor olup; bilgi ekonomisinin kâr yolu olduğundan ( Teixera (2005); Bontis & Fitz-Enz (2002)),aynı zamanda eğitim kalitesi bir ekonominin uzun süreli ve sürekli büyümesine yol açabileceğinden (Mankiw vd. (1992); Romer (1989); Uzawa (1965), Lucas (1988) ve beşeri sermaye taklit edilemez ve görünmez bir varlık olduğundan (Becker & Gerhant (1996); Barney (1991)) Beşeri Sermaye Türkiye'deki yüksek teknoloji ihracatı patent sayısı, AR-GE araştırmacı sayısı, beşerî sermaye, savunma ve silah ihracatı üzerindeki kısa dönemli etkilerini ortaya koymak amacıyla ARDL modeline dayalı hata düzeltme modelleri oluşturulmuştur. Tablo 10'da kısa dönem hata düzeltme modeli tahmin sonuçları yer almaktadır. ...
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... Notes 1. Seminal articles include Romer (1986Romer ( , 1990 and Lucas (1988). 2. Schmitz (1989) is arguably an exception. ...
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Based on a review of 700+ peer-reviewed articles since 1990, identified using text mining methodology and supervised machine learning, we analyze how neo-Schumpeterian growth theorists relate to the entrepreneur-centered view of Schumpeter Mark I and the entrepreneurless framework of Schumpeter Mark II. The literature leans heavily toward Schumpeter Mark II; innovation returns are modeled as following an ex ante known probability distribution. By assuming that innovation outcomes are (probabilistically) deterministic, the entrepreneur becomes redundant. Abstracting from genuine uncertainty, implies that central issues regarding the economic function of the entrepreneur are overlooked such as the roles of proprietary resources, skills, and profits.
... Schumpeter' e göre ar-ge sektörü üretimde yenilikçi teknolojilerin elde edilebilmesi, sürdürülebilir büyüme ve firma etkinliğinin sağlanması açısından anahtar sektör olarak değerlendirilmektedir (Çiftçi, 2010:512). Ayrıca Romer (1990) ve Lucas (1988) tarafından öne sürülen içsel büyüme teorilerinde TFV teknolojik gelişme ile ilişkilendirilmektedir. İçsel büyüme teorilerine göre teknolojik ilerleme TFV'yi artırmaktadır. ...
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