Does EU cohesion policy work? Theory and evidence

This paper evaluates the effectiveness of European Cohesion Policy in the regions of 12 EU countries in the period 1991–2008, on the basis of a spatial growth model, which allows for the identification of both direct and indirect effects of EU funds on GDP per worker growth. We find that “Objective 1” funds are characterized by strong spatial externalities and a positive and concave effect on the growth of GDP per worker, which reaches a peak at the ratio funds/GDP of approximately 3 percent and becomes non-significant after 4 percent. “Objective 2” and “Cohesion” funds have nonsignificant effects, while all the other funds exert a positive and significant effect, but their size is very lim…

“Istituzioni di Economia Politica. Volume Secondo. Macroeconomia” (2006), Torino: Giappichelli.

“Natural wages dynamics in a Ricardian growth model”

Ricardian growth models are generally built on the assumption of a constant natural wage. Such an assumption conceals the fact that classical economists were aware that in growing economies workers' normal pattern of consumption steadily rise both in terms of quantity and quality. In the first part of the chapter we gather some classical hints on the relationship between economic growth and natural wages in order to provide a rational reconstruction of the classical point of view on natural wage dynamics. In the second part of the chapter we propose a formal analysis of the dynamics of a Ricardian model with endogenous natural wage

Nonlinear economic growth: Some theory and cross-country evidence

Abstract This paper aims to test the existence of different growth regimes, that is of different relationships between growth rate and income level. We propose a simple nonlinear growth model and test its empirical implications by estimating Markov transition matrices and stochastic kernels. We show that growth is indeed nonlinear: a first phase of slow or zero growth is followed by a take-off and, finally, by a phase of deceleration. We discuss the relevance of these results with respect to the issue of convergence and reversibility of development, in the light of models of structural change and technological diffusion.

Deep and Proximate Determinants of the World Income Distribution

This paper studies the deep and proximate determinants of the evolution of the cross-country distribution of GDP per worker in the period 1960–2008 by a novel method based on an information criterion. We find that countries of our sample follow three distinctive growth regimes identified by two deep determinants, namely life expectancy at birth in 1960 and the share of Catholics in 1965, and that each regime is characterized by non-linearities. Growth regimes appear to be the main cause of the increased inequality and polarization, while technological catch-up, proxied by the initial level of GDP per worker, acts in the opposite direction. Finally, human capital marginally reduces polarizat…

Productivity Polarization and Sectoral Dynamics in European Regions

Abstract We show that the distribution dynamics of productivity in European regions displays polarization with a nonlinear growth path. We investigate the factors explaining this behavior focusing in particular on sectoral composition. The β -convegence analysis reveals that initial shares of Manufacturing and Other Market Services have a nonlinear impact on growth, while spatial effects are not statistically significant. By decomposing the dynamics of aggregate productivity in terms of sectoral dynamics, we show that productivity in Manufacturing, Non Market Services, and Other Market Services does not converge, for the complex interaction of technological spillovers and specialization eff…

Appropriate technology in a Solovian nonlinear growth model

We propose a Solovian growth model with a convex-concave production function and international technological spillovers. We test the empirical implications of the model, analysing the effects of the productivity slowdown that followed the oil shocks of the 1970s. We argue that this slowdown, altering the world income distribution, affected the pattern of international technological spillovers, taking the poorest countries further away from the technological leaders, and therefore unable to exploit their technologies. The result is the emergence of a poverty trap for low-income countries.

An empirical analysis of growth volatility: A Markov chain approach

This paper studies the determinants of growth rate volatility, focusing on the effect of level of GDP, structural change and the size of economy. First we provide a graphical analysis based on nonparametric techniques, then a quantitative analysis which follows the distribution dynamics approach. Growth volatility appears to (i) decrease with per capita GDP, (ii) increase with the share of the agricultural sector on GDP and, (iii) decrease with the size of the economy, measured by a combination of total GDP and trade openness. However, we show that the explanatory power of per capita GDP tends to vanish when we control for the size of the economy. © 2005 Springer-Verlag Berlin Heidelberg.

Consumption patterns, development and growth: Adam Smith, David Ricardo and Thomas Robert Malthus

In this paper we combine the classical analysis of luxury consumption with the classical theories of development and growth. We also focus on the role played, within classical economics, by institutional factors such as the structure of property rights and contractual arrangements in determining consumption patterns and investment in agriculture. In particular, we show that Ricardo's and Malthus' different views on the role of consumption expenditure in promoting growth depend on Ricardo's acceptance (Malthus' refusal) of Say's law of markets and on Ricardo's exclusion (Malthus' inclusion) of a non-commodity option such as leisure from (in) the range of available consumption alternatives.

Growth Volatility Indices

We study the determinants of growth rate volatility in a multisector economy where sectors are heterogeneous in their individual volatility. We propose a model where aggregate volatility is explained by structural change and the size of the economy. We present a first attempt to test these predictions measuring growth volatility by indices based on Markov transition matrices. Growth volatility appears to (i) decrease with total GDP and (ii) increase with the share of the agricultural sector on GDP, although some nonlinearities appear. Trade openness, which we relate to the size of the economy, also plays a role. In accordance with our model, the explanatory power of per capita GDP, a releva…