Technology Spillover through Trade and TFP Convergence: 120 Years of Evidence for the OECD Countries

Using a new dataset on imports of technology and total factor productivity (TFP) over more than a century for the OECD countries, this paper tests for international technological transmission through trade. The empirical estimates suggest that imports of knowledge have been responsible for an almost 200% increase in TFP over the past century, but that the spillover effect has been highly unevenly distributed across countries, but has contributed to TFP convergence among the OECD countries.technology spillovers; imports; TFP convergence

ECONOMIC GROWTH, TFP CONVERGENCE AND WORLD EXPORTS OF IDEAS: A CENTURY OF EVIDENCE

This paper examines the effect of international patent stock on total factor productivity for 16 OECD countries over the past 120 years. The results show that the international patent stock is highly influential for economic growth and, together with knowledge spillovers through the channel of imports, has contributed significantly to TFP growth and σ-convergence among the OECD countries over the past 120 years.TFP growth, international diffusion of ideas, international patents, convergence.

The Dynamic Interaction between Equity Prices and Supply Shocks.

This paper develops a theory of medium term share price movements under slow adjustment in the labour market relative to the share market and perfect foresight in the share market. The model seeks to explain the slow movements in real share prices that have been observed in the OECD countries over the past 130 years. Using 130 years of data for the OECD countries, the empirical evidence indicates that movements in factor shares are crucial determinants of medium-term movements in share prices.share prices; supply shocks; rational expectations

The Anatomy of Growth in the OECD since 1870: the Transformation from the Post-Malthusian Growth Regime to the Modern Growth Epoch

This paper extends conventional growth accounting exercises to allow for endogeneity of capital, the demographic transition, age dependency, and employment rates among other factors. Using data for the OECD countries in the period 1870-2006 it is shown that growth has been predominantly driven by demographics and TFP growth. TFP has in turn been driven by R&D, knowledge spillovers through the channel of imports, educational attainment, and the interaction between educational attainment and the distance to the frontier. The estimates suggest permanent growth effects of R&D and human capital and, therefore, that growth can be expected to be positive for the rest of this century.human capital, demographic transition, endogenous growth models

The Macroeconomics of Share Prices in the Medium Term and in the Long Run.

This paper develops a macro-model of share prices that predicts that the growth rates in real share prices and real dividends gravitate toward predictable constants in the long run, but fluctuate on approximately decennial frequencies due to movements in capital’s share in total income and the output-capital ratio. The model has important implications for medium-term and long-run movements in real share prices and dividends, required share returns, the effects of new technologies on share returns, share price valuation, and whether shares are less risky in the long run than in the short run. Using macroeconomic data over 130 years for 22 OECD countries, the data give support for the model.share prices and dividends in the long run; share valuation; required share returns; macroeconomic factors

The Equity Risk Premium and the Required Share Returns in a Tobin’s q Model.

Based on the Tobin’s q principle this paper shows that earnings per unit of capital and the output capital ratio are excellent measures of the required share returns because they are only temporarily affected by earnings shocks but are driven permanently by changes in required share returns. Evidence for the US over the period from 1889 to 2002 suggests that real required share returns and the equity risk premium climbed to extraordinarily high levels from the late 1930, to the end of the 1940s, and have since declined. The risk premium is currently somewhere between 4 and 6%.expected share returns; equity risk premium; Tobin’s q; share valuation; macroeconomic factors

Long-Run Convergence in Manufacturing and Innovation-Based Models

Most studies of comparative productivities fail to find evidence of convergence in OECD manufacturing despite major economic growth theories predicting convergence. Using manufacturing data for 19 OECD countries over the period from 1870 to 2006 this study finds strong evidence of unconditional B-convergence as well as o-convergence. Panel data estimates suggest that the convergence has been driven by domestic R&D, international R&D spillovers and financial development as predicted by Schumpeterian growth theoriesConvergence, second-generation endogenous growth models

Industry diversity, competition and firm relatedness: The impact on employment before and after the 2008 global financial crisis

Industry diversity, competition and firm relatedness: the impact on employment before and after the 2008 global financial crisis. Regional Studies. This study investigates the extent to which indicators of external-scale economies impacted employment growth in Canada over the period 2004–11. It focuses on knowledge spillovers between firms while accounting for Marshallian specialization, Jacobs’ diversity and competition by industry, as well as related and unrelated firm varieties in terms of employment and sales. It is found that the employment growth effects of local competition and diversity are positive, while the effect of Marshallian specialization is negative. Diversification is found to be particularly important for employment growth during the global financial crisis and immediately thereafter

House Prices, Credit and Willingness to Lend

This paper establishes a Tobin’s q model in which house prices fluctuate around their long run equilibrium due to fluctuations in credit availability and income. It is shown that house prices are positively related to credit in the short run, however, negatively related to the availability of credit in the long run. Using survey data on banks’ willingness to lend and data on disintermediation for the U.S. over a long period and for nine OECD countries over a short period it is shown that the availability of credit is the principal variable driving house prices around their long run equilibrium. Shocks to interest rates and income have only secondary effects on house price fluctuations.Willingness to lend, Tobin’s q. House prices

THE INDIAN GROWTH MIRACLE AND ENDOGENOUS GROWTH

Using over half a century of R&D data for India, this paper tests whether the second-generation endogenous growth theories are consistent with India’s growth experience. Furthermore, the paper also examines the extent to which growth in India can be explained by R&D activity, international R&D spillovers, catch-up to the technology frontier and policy reforms. The empirical results show that the growth in India over the past five decades has been significantly driven by research intensity following the predictions of Schumpeterian growth theory.Schumpeterian growth; semi-endogenous growth; R&D.