Trust, Collaboration, and Economic Growth

2020 ◽  
Author(s):  
Jiro Kondo ◽  
Danielle Li ◽  
Dimitris Papanikolaou
Keyword(s):  
Economic Growth ◽  
Productivity Growth ◽  
Empirical Relation ◽  
Macro Level ◽  
Correlated Equilibrium ◽  
Efficient Production ◽  
Macroeconomic Model ◽  
Present Value ◽  
Ex Ante ◽  
Public Signal

We propose a macroeconomic model in which variation in the level of trust leads to higher innovation, investment, and productivity growth. The key feature in the model is a hold-up friction in the creation of new capital. Innovators generate ideas but are inefficient at implementing them into productive capital on their own. Firms can help innovators implement their ideas efficiently but cannot ex ante commit to compensating them appropriately. Rather, firms are disciplined only by the value of their reputations—the present value of their future partnerships. We model trust as a public signal and construct a correlated equilibrium. When trust is high, firms anticipate fruitful collaborations and thus can credibly commit to not expropriating inventors, leading to the more efficient production of new capital. Our model can be used to qualitatively replicate the empirical relation between measures of trust and investment, innovation, and productivity growth—at both the micro and macro level. This paper was accepted by Tomasz Piskorski, finance.

Forming Sources of Long-run Growth: How to Understand Them?

2014 ◽  
pp. 4-20 ◽  
Author(s):  
G. Idrisov ◽  
S. Sinelnikov-Murylev
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Economic Policy ◽  
Business Cycle ◽  
Capital Markets ◽  
Productivity Growth ◽  
Government Spending ◽  
Long Run ◽  
Accelerate Growth ◽  
Budget Institutions

The paper analyzes the inconsequence and problems of Russian economic policy to accelerate economic growth. The authors consider three components of growth rate (potential, Russian business cycle and world business cycle components) and conclude that in order to pursue an effective economic policy to accelerate growth, it has to be addressed to the potential (long-run) growth component. The main ingredients of this policy are government spending restructuring and budget institutions reform, labor and capital markets reforms, productivity growth.

Improvement of the remuneration system in modern conditions

2020 ◽  
pp. 6-12
Author(s):  
S. V. Savina
Keyword(s):  
Economic Growth ◽  
Productivity Growth ◽  
Positive Impact ◽  
Domestic Market ◽  
Effective Demand ◽  
Difficult Situation ◽  
Remuneration System ◽  
Near Future ◽  
Further Development

Today, a difficult situation has developed in the field of wages and incomes of the population, associated with the need to increase the level of wages and real incomes of the population, since low effective demand in the domestic market can become the main constraint on economic growth in the near future. The main goal of wage reform in modern conditions is to restore the role of wages as the main incentive for productivity growth and labor efficiency, which will have a positive impact on the functioning of production and will give an impetus to its further development.

Brain drain and economic growth: evidence of productivity growth from brain circulation

2021 ◽  
Vol 10 (2) ◽  
pp. 128-145
Author(s):  
Woosik Yu
Keyword(s):  
Economic Growth ◽  
Brain Drain ◽  
Productivity Growth ◽  
Fixed Effects ◽  
Positive Impact ◽  
Brain Circulation ◽  
Middle Income ◽  
Positive Effects ◽  
Fixed Effects Regression ◽  
The Brain

This paper analyzes the effect of the so-called ‘brain drain’ on economic growth through the channel of growth in total factor productivity. We analyze panel data that measure the severity of brain drain, which are from IMD and the U.S. National Science Foundation. Our analysis shows that middle-income countries have more brain drain compared to the group of high-income countries. Also, emerging economies that grow fast tend to experience more brain drain. Our results from fixed effects regression models show that that brain drain has a significant and positive impact on economic growth, and the main channel is productivity growth. This can be considered as evidence of the positive effects of ‘brain circulation’, which is one of the brain drain phenomena that settlement of the talents in advanced countries can eventually help improve the productivity of home country by the sharing of advanced technologies and skills around them with colleagues in motherland. Therefore, a strategy of utilizing overseas resident talents should also be considered, alongside the brain-attraction policy.

The cultural dividend: a hidden source of economic growth in emerging countries

2017 ◽  
Vol 24 (4) ◽  
pp. 590-616 ◽  
Author(s):  
Shaomin Li ◽  
Seung Ho Park ◽  
David Duden Selover
Keyword(s):  
Economic Growth ◽  
Labor Productivity ◽  
Productivity Growth ◽  
Large Scale ◽  
Cultural Factors ◽  
Content Type ◽  
Economic Productivity ◽  
Large Scale Data ◽  
Productivity Gains

Purpose The purpose of this paper is to develop the theoretical linkage between culture and economic growth and empirically test the relationship by measuring culture and how it affects labor productivity. Design/methodology/approach This study uses a cross-section study of developing countries and regresses economic productivity growth on a set of control variables and cultural factors. Findings It is found that three cultural factors, economic attitudes, political attitudes, and attitudes towards the family, affect economic productivity growth. Originality/value Many economists ignore culture as a factor in economic growth, either because they discount the value of culture or because they have no simple way to quantify culture, resulting in the role of culture being under-researched. The study is the first to extensively examine the role of culture in productivity growth using large-scale data sources. The authors show that culture plays an important role in productivity gains across countries, contributing to the study of the effects of culture on economic development, and that culture can be empirically measured and linked to an activity that directly affects the economic growth – labor productivity.

scholarly journals LIFE-CYCLE HYPOTHESIS OF HYBRID SUKUK

JURISDICTIE ◽  
2020 ◽  
Vol 10 (2) ◽  
pp. 137
Author(s):  
Luthvia Moonda
Keyword(s):  
Economic Growth ◽  
Life Cycle ◽  
Financial Institutions ◽  
Financial Services ◽  
Net Present Value ◽  
Vital Role ◽  
Muslim World ◽  
Present Value ◽  
The Public ◽  
Life Cycle Hypothesis

The development of financial system recently has been contributing to the economic growth of the nation. Its vital role helps many financial institutions to advance their financial services, particularly in investment systems such as Sukuk. As seen in recent years, the involvement of Sukuk in many industries ranging from sovereigns to corporates for both Muslim and non-Muslim world companies. Although its popularity increases, it seems to be widely accepted that the insufficient structures of Sukuk become a big challenge to serve the public needs to be in compliance with Shari’ah principles. In an attempt to fulfil many financial companies in issuing Sukuk and the needs of the Muslim world, this study aims to provide the new structure of Sukuk. The study proposes a design of securitization by combining two contracts of Sukuk into one Sukuk structure. The constructed idea will use a model of life cycle hypothesis to support the Sukuk issuing companies in maintaining their incomes. It also explains the cycle cash flow and asset movement as well as the calculation of Net Present Value (NPV) of the project.

scholarly journals Does Religiosity Affect Multidimensional Poverty? Evidence from World Values Survey (2010-2014)

2019 ◽  
Vol 32 (2) ◽  
pp. 3-24
Author(s):  
Salman Syed Ali Salman Syed Ali
Keyword(s):  
Economic Growth ◽  
Multidimensional Poverty ◽  
Macro Level ◽  
World Values Survey ◽  
Counting Approach ◽  
The Poor ◽  
The Impact

Based on macro-level observations that high religiosity is associated with lower economic growth, it is generally assumed that religiosity contributes to poverty. However, this conjecture may not be true because religion provides motivation to the poor, encourages cooperation in society, and influences preferences and habits in ways that could help reduce poverty. The present paper uses data from World Values Survey (WVS) covering 52 countries and 74,042 individuals, to construct a measure of multidimensional poverty based on deprivation counting approach and a measure of religiosity based on faith deprivation. It then addresses three questions: (a) Is religiosity similar among multidimensional-poor and non-poor? (b) Are there any differences in dimensions of deprivations among high religiosity and low religiosity people? (c) What is the impact of religiosity on multidimensional poverty? It finds that higher religiosity is associated with lower multidimensional poverty; faith-poor are more deprived in their protections of intellect and posterity than protections of life and wealth. A decrease in religiosity increases multidimensional poverty. An implication of the study is that a religious society would be less poor even if its economic growth is slow.

scholarly journals Pakistan’s Productivity Performance and TFP Trends, 1980–2015: Cause for Real Concern

2016 ◽  
Vol 21 (Special Edition) ◽  
pp. 33-63 ◽  
Author(s):  
Rashid Amjad ◽  
Namra Awais
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
Total Factor Productivity ◽  
Labor Productivity ◽  
Productivity Growth ◽  
Output Growth ◽  
Factor Productivity ◽  
Sustained Growth ◽  
Growth Prospects ◽  
High Output

This paper reviews Pakistan’s productivity performance over the last 35 years (1980–2015) and identifies factors that help explain the declining trend in labor productivity and total factor productivity (TFP), both of which could have served as major drivers of productivity growth – as happened in East Asia and more recently in India. A key finding is that the maximum TFP gains and their contribution to economic growth are realized during periods of high-output growth. The lack of sustained growth and low and declining levels of investment appear to be the most important causes of the low contribution of TFP to productivity growth, which has now reached levels that should be of major concern to policymakers vis-à-vis Pakistan’s growth prospects.

scholarly journals Macroeconomic Risk Factor in Fuzzy Present Value of Highway Development

2018 ◽  
Vol 7 (4.33) ◽  
pp. 71
Author(s):  
Siti Salihah Shaffie ◽  
Saiful Hafizah Jaaman ◽  
Daud Mohamad
Keyword(s):  
Economic Growth ◽  
Risk Assessment ◽  
Risk Factor ◽  
Cash Flow ◽  
Capital Investment ◽  
Accurate Estimation ◽  
Present Value ◽  
Macroeconomic Risk ◽  
Macroeconomic Factor

Highway developments are the backbone for the society and economic growth. It is part of the capital investment in infrastructure developments that require high spending, long term commitment and prognosticated with numbers of risks. This is because the investment is associated with uncertainty and vagueness due to long term duration of construction and operation of the project. Hence, the valuation of the investment requires accommodated model to present more accurate estimation of the project. This study proposed to evaluate fuzzy present value of a highway project with anticipated risk assessment in its valuation using fuzzy present value. The risk assessment is part of the estimation of fuzzy cash flow to represent better present value of the project. The results show an estimated value comprise with risk assessment of macroeconomic factor to portray better estimation that can assist decision maker to make decision towards the project.   

scholarly journals COVID-19: B40 HOUSEHOLD’S FINANCIAL AND CONSUMPTION DURING THE IMPLEMENTATION OF MOVEMENT CONTROL ORDER (MCO)

2021 ◽  
Vol 19 (15) ◽  
Author(s):  
Sharmila Thinagar ◽  
Siti Nurul Munawwarah Roslan ◽  
Mohd Khairi Ismail ◽  
Norshamliza Chamhuri
Keyword(s):  
Economic Growth ◽  
Movement Control ◽  
Income Group ◽  
Macro Level ◽  
Economic Risk ◽  
Daily Consumption ◽  
Financial Situation ◽  
Micro Level ◽  
Control Order ◽  
Malaysian Government

The outbreak of COVID-19 caused the Malaysian Government to take steps to implement the Movement Control Order (MCO). According to Bank Negara Malaysia, the implementation of MCO will have an impact on national incomes, with Malaysia’s estimated economic growth in 2020. The effect of MCO not only affects the macro level, but also at the micro level, particularly those groups of households with the lowest income of 40%. (B40). The B40 income group is a group of households that are expected to face high economic risk and directly affect their patterns of consumption during the implementation of the MCO. This study contributes to the empiric study related to COVID-19 and the implementation of MCO in the B40 group. This study analysed the pattern of financial and consumption of B40 households in Malaysia during the implementation of MCO. The findings show that the financial situation of the B40 household has changed the patterns of daily consumption following the implementation of the MCO.

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