Papers by Thomas Ziesemer
Economic change and restructuring, Mar 6, 2024
A model is proposed where economic growth is driven by innovation alongside the diffusion and ado... more A model is proposed where economic growth is driven by innovation alongside the diffusion and adoption of technology from the frontier. Innovation investments are related to households savings, which generates multiple equilibria with low and high levels of innovation and productivity. Low-level equilibria are unstable. Starting from a position with low levels of investment and innovation, increasing investments are associated with high but decreasing dependence on international technology diffusion. A major objective of policy-making is to increase investment sufficiently in the lower end to reach the high-level steady state. An economic rationale is provided for the existence of productivity improving equilibria, where distance to the frontier is reduced based on a tax and subsidy mechanism designed to boost innovation and speed up catching-up.
Under the standard neo-classical growth framework, conditional convergence studies assume that a ... more Under the standard neo-classical growth framework, conditional convergence studies assume that a country with a higher initial human capital among others 'performs' better. Nevertheless the growth implications of health, another component of human capital, compared to education, have not been investigated thoroughly within the optimum growth framework yet. The aim of this study is to show rigorously the positive association between per capita income and health status of an economy and thereby provide a theoretical background for using 'health' variables in conditional convergence analyses. This positive relationship between health and per capita output is first shown in the standard neo-classical growth framework where the health status is exogenously given. Endogenising health then enables us to analyse the impact of optimal expenditure on health care on steady state growth and transition dynamics.
We update the Gini coefficients of education to include the year 2015, added to the Barro‐Lee dat... more We update the Gini coefficients of education to include the year 2015, added to the Barro‐Lee data set recently. A panel analysis shows that every five years education inequality falls by 2.8 percentage points. A stable average value is predicted to be 0.22. Kernel densities loose their twin peaks when going from 1955 to later years
RePEc: Research Papers in Economics, 1999
The cost-minimization part of a specific factors model with perfect capital movements and product... more The cost-minimization part of a specific factors model with perfect capital movements and production externalities for both perfect and imperfect competition is used here to explain the growth rate of wages as a function of technical change, terms of trade or import changes, interest rate changes and the growth rate of the labour supply. Our estimation of the perfect competition model for 67 combinations of countries and sectors yields the result that technical change explains a higher percentage of both wage and employment growth than changes in the terms of trade do before the 1980s. From the 1980s onwards international trade is slightly more influential than technical progress. Much more important than these two are changes in the sector specific labour supply in all countries but the UK. In the UK terms of trade changes matter most. However, since we cannot exclude increasing returns, a model with imperfect competition is also estimated. Results support those from perfect competition. Ultimately, as compared to other literature, we identify some more sectors that seem to have been negatively affected by international trade. Finally, we consider policy conclusions.
How much does public capital matter for economic growth? How large should it be? This paper attem... more How much does public capital matter for economic growth? How large should it be? This paper attempts to answer these questions, taking the case of SSA countries. It develops and estimates a model that posits a nonlinear relationship between public investment and growth, to determine the growth-maximizing public investment GDP share. It empirically also accounts for the crowding-in and crowding-out e¤ects between public and private investment, with equations estimated separately and simultaneously, using System GMM. The paper further runs simulation and examines the public investment GDP share that maximizes consumption. This is estimated to be between 8:4 percent and 11:0 percent. The results from estimating the growth model are in the middle of this range, which is larger than the observed value of 7:2 percent at the end of the sample period. These outcomes suggest that, on average, there has been public under-investment in Africa, contrary to previous …ndings.
Journal of Applied Economics, 2021
We analyze the dynamic interaction of mission-oriented R&D expenditure stocks with domestic and f... more We analyze the dynamic interaction of mission-oriented R&D expenditure stocks with domestic and foreign private and public R&D, total-factor-productivity (TFP), and gross domestic product (GDP) for seven EU countries. We use the vector-error-correction method. Permanent changes on mission-oriented R&D increase total-factor-productivity and GDP. On average across periods and countries, a 1% increase of mission-oriented R&D leads to an additional 0.485% public R&D, 0.705% private R&D, 0.485% for TFP, and 0.56% GDP. We also show years of positive gains, the sums of discounted net present values, and the average yearly gains/GDP ratio. Mission-oriented R&D has high internal rates of return.
MERIT Research Memoranda, 2001
We integrate two workhorse models in economics: The monopolistic competition model of Dixit and S... more We integrate two workhorse models in economics: The monopolistic competition model of Dixit and Stiglitz and the search unemployment model of Pissarides. Many results of the original models survive. New results concerning the effects of changes in labour (goods) market parameters on goods markets (the labour market) variables are obtained and compared to the literature.
Social Science Research Network, 2011
This paper argues that immigration can help to alleviate the burden ageing presents for the welfa... more This paper argues that immigration can help to alleviate the burden ageing presents for the welfare states of most Western Economies. We develop a macroeconomic framework which deals with the impact of both ageing and immigration on economic growth. This is combined with a detailed model of the labour market, to include the interaction with lowskilled unemployment. The empirical relevance of some crucial model assumptions is shown to hold for the Netherlands, 1973-2007. The conclusions are that immigration will help to alleviate the ageing problem, as long as the immigrants will be able to participate in the labour force at least as much as the native population. Moreover, the better educated the immigrants are or become, the higher their contribution to growth will be.
RePEc: Research Papers in Economics, 2009
The credit crisis of OECD countries has a negative impact on the growth of the world economy acco... more The credit crisis of OECD countries has a negative impact on the growth of the world economy according to a simple error correction model. This causes negative growth effects in poor developing countries. The reduced growth has a direct or indirect impact on the convergence issue, aid, remittances, labour force growth, investment and savings, net foreign debt, migration, tax revenues, public expenditure on education and literacy. We estimate dynamic equations of all these variables using dynamic panel data methods for a panel of countries with per capita income below $1200 (2000). The estimated equations are then integrated to a dynamic system of fourteen equations for fourteen variables that allows for highly non-linear baseline simulations for these open economies. Then we analyze the effects of shocks as predicted by the international organizations for the OECD and world growth for 2008 and 2009. Whereas growth rates return to the baseline scenario very quickly, the GDP per capita returns to its baseline level in OECD countries and the world economy after some years but in poor developing countries it remains below the baseline scenario for more than 200 years. This long run blow to convergence leads to more remittances and emigration, a lower labour force growth, higher shares of GDP for saving, tax revenues, public expenditure on education and investment, and higher literacy. However, all these stabilizing forces through remittances and emigration cannot compensate the losses in levels of growth. Short and medium run effects are driven by a return to baseline for OECD and world GDP growth rates by the end of 2010, but for levels only 10 to 30 years later. Therefore we first get 15 to 20 years of fewer remittances, tax revenues, savings, public expenditure on education, literacy, and investment, more emigration and lower labour force growth. JEL class.: F22, 24; G01, O15, J61.
RePEc: Research Papers in Economics, 2018
113 countries report producing electricity from non-hydro renewable sources and thereby participa... more 113 countries report producing electricity from non-hydro renewable sources and thereby participate in the global energy transition. This paper shows through a dynamic panel data analysis that imports of electric currents have increased and exports have decreased through the higher share of renewables in electricity production, controlling for other factors. On the one hand more cables have been built recently; but on the other hand some countries are blocking electricity shocks technologically as they suffer from free trade temporarily when receiving supply shocks. This shows that trade currently helps dealing with fluctuations of supply, but temporary losses for recipients of shocks may require payments to leave the borders open.
RePEc: Research Papers in Economics, Sep 5, 2017
Endogenous growth theory has produced formulas for steady-state growth rates of income per capita... more Endogenous growth theory has produced formulas for steady-state growth rates of income per capita which are linear in the growth rate of the population. Depending on the details of the models, slopes and intercepts are positive, zero or negative. Empirical tests have taken over the assumption of exogenous population growth from the theoretical models and have mostly not distinguished steady-state results from transitional growth. In contrast, we assume (i) that there is two-way causality as in unified growth theory, and (ii) capture the steady-state property by a long-term relation in a series of vector-error-correction models allowing (iii) successively for more heterogeneity. The slope of the growth equations is positive in this setting. Intercepts are most frequently also positive, but almost equally often zero, and sometimes even negative. Results slightly favour fully-over semi-endogenous growth, and the slightly more frequent case is that long-run growth can remain positive if population stops growing. Zero or negative intercepts cannot be ruled out though.
research memorandum, 2001
RePEc: Research Papers in Economics, 2012
This paper analyses the impact of the skill composition of migration flows on the host country's ... more This paper analyses the impact of the skill composition of migration flows on the host country's labour market in a specific-factors-two-sector model with heterogeneous labour (low-, medium-, and high-skilled). We assume price-setting behaviour in both manufacturing and services sectors. The low-and medium-skilled labour markets are characterized by frictions due to wage bargaining. Moreover, we assume bumping down of unemployed medium-skilled workers into low-skilled service jobs whereas endogenous benefits create an interdependency between the two bargaining processes. Particular attention is paid to medium-skilled migration which enables us to augment the literature by replicating important stylized facts regarding medium skills, such as i) the interaction between immigration, low-skilled unemployment and medium-skilled over-qualification, ii) the polarization effect where both lowand high-skilled wages increase relative to the medium-skilled. The model is calibrated using German data. The key findings are: (i) a perfectly balanced migration has a neutral impact on the receiving economy due to international capital flows; (ii) immigration of medium-skilled labour together with some high-skilled labour lowers the low-skilled unemployment rate and has a positive effect on output per capita; (iii) migration of only medium-skilled labour has a neutral GDP per capita effect.
Industrial and Corporate Change, Sep 28, 2021
Despite the fact that research and development (R&D) activities are carried out in most countries... more Despite the fact that research and development (R&D) activities are carried out in most countries in public research institutes such as universities and public research organizations, there have been few studies that attempted to estimate the economic impact of such public investment in R&D. In this paper, we analyze the relations between total factor productivity (TFP) and public and private R&D as well as gross domestic product for a set of 17 Organisation for Economic Cooperation and Development (OECD) countries using a vector-error-correction model. We find that for the period 1975-2014, investment in public R&D has had a clearly positive effect on TFP growth in the majority of countries analyzed. In simulations allowing for a permanent positive shock to public R&D, we observe a strong dynamic complementarity between the public and private (domestic) stocks of R&D for several countries. In countries where this complementarity is strong, the TFP effect of extra public R&D investments is also strong. A discriminant analysis shows that in countries with high complementarity between private and public R&D, the share of foreign funding of R&D performed in the business sector combined with a high business R&D intensity tends to be low. At the same time, the share of basic R&D in business R&D combined with a higher public R&D intensity tends to be higher in countries with strong complementarity.
RePEc: Research Papers in Economics, 2019
We analyse the dynamic interaction of Japan's total factor productivity (TFP), GDP, domestic and ... more We analyse the dynamic interaction of Japan's total factor productivity (TFP), GDP, domestic and foreign private and public R&D as well as mission-oriented R&D, GBAORD, in a cointegrated VAR for Japan with data from 1988-2014. Analysis of effects of permanent shocks shows that (i) public R&D, unlike GBAORD, encourages private R&D and TFP, and has high internal rates of return. (ii) Japan's public and private R&D have a statistically significant positive effect on foreign private and public R&D stocks and vice versa. (iii) After transitory GDP shocks, public and private R&D are counter-cyclical and GBAORD is pro-cyclical in Japan.
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Papers by Thomas Ziesemer