The Contribution of Economic Geography to GDP Per Capita

Boulhol, Hervé; Serres, Alain de; Molnár, Margit

doi:10.2139/ssrn.1258222

Cited by 20 publications

(12 citation statements)

References 41 publications

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“…Telecom revenue is also part of GDP and hence the positive relationship is self-explanatory. Negative population growth for GDP growth is also consistent with the study by Boulhol, de Serres and Molnar (2008).…”

Section: Resultssupporting

confidence: 90%

“…The coefficient of population density, which is negative for GDP growth, is somewhat surprising. This may be because, as Boulhol, de Serres, and Molnar (2008) found in the case of OECD, population density is a much weaker indicator of GDP than the other geographic variables and therefore does not have a strong link to the GDP per capita. The population and urban density are both negative, as is also supported by similar results in the study by Kolko (2010).…”

Section: Resultsmentioning

confidence: 90%

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Does Broadband Speed Really Matter for Driving Economic Growth? Investigating OECD Countries

Rohman

Bohlin

2012

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThis paper aims to measure the impact of broadband speed on economic growth in the OECD countries. The macroeconomic indicators for this study were collected from OECD databases, except for the speed data, which were gathered from Ookla, a company that provides broadband testing and web-based network diagnostic applications data on a daily basis. With this, quarterly balanced panel data for 34 OECD countries during the period 2008-2010 were examined. The study found that the estimated coefficient of broadband speed is statistically significant. Doubling the broadband speed will contribute to 0.3% growth compared with the growth rate in the base year. The results convey that the impact of increasing broadband speed on GDP growth will largely depend on two aspects: (i) the size of the coefficient of the broadband speed (beta) and (ii) the existing economic growth in each country. Consequently, since the coefficient is linear, the impact will also be relatively greater for countries that experienced lower economic growth during previous years. Finally, the paper provides suggestions for future research in this vein and further calibration of future models.

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Section: Resultssupporting

confidence: 90%

Section: Resultsmentioning

confidence: 90%

Does Broadband Speed Really Matter for Driving Economic Growth? Investigating OECD Countries

Rohman

Bohlin

2012

SSRN Journal

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“…During the Great Depression, world trade was divided by three and it is estimated that 25% to 50% of this collapse can be attributed to protectionist measures (Foletti et al, 2009). Feeding these figures into recent OECD growth equations (OECD, 2003;Boulhol et al, 2008) suggests that a trade collapse similar to that experienced during the Great Depression could cut long-run GDP per capita levels by between 3% and 6%. This estimate is however surrounded by considerable uncertainty, and amplifying mechanisms may imply an even larger reduction in long-run GDP per capita levels in the presence of such a large trade fall.…”

Section: Box 13 the Possible Effects Of Trade-restrictive Measuresmentioning

confidence: 99%

“…As an illustration, past OECD work can be used to assess the potential impact of bringing OECD indicators of product market regulation back to their 2003 levels. Based on estimates in Nicoletti et al (2003) and Boulhol et al (2008), such a scenario could lead to a decrease in international trade of goods of about 20%, which in turn might lower GDP per capita by about two per cent in the long run. While they might be seen as fairly large, these figures do not take into account the effects from possible changes in trade between OECD and non-OECD countries, such as reduced trade in services, FDI restrictions, or increases in tariff barriers.…”

Section: Box 13 the Possible Effects Of Trade-restrictive Measuresmentioning

confidence: 99%

“…Only modest steps to reduce PMR have been taken so far in this crisis, but aligning anti-competitive PMR to OECD best practice might raise GDP per capita levels by as much as 2.5% in the typical OECD country, based on estimates in Boulhol et al (2008) that do not factor in possible gains arising further from higher private R&D spending and increased employment levels. By contrast, continued support to various industries could distort entry and exit incentives, and thereby de facto worsen PMR with negative effects on productivity and GDP per capita levels.…”

Section: The Impact Of Crisis Policies On Long-term Growthmentioning

confidence: 99%

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Responding to the Crisis while Protecting Long-term Growth

2010

Economic Policy Reforms

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OECD countries have taken a wide range of measures in response to 18The OECD experienced a major financial crisis that led to the deepest recession since the Great Depression. GDP fell by four percentage points during 2009, industrial production and global trade shrank drastically before starting to recover from depressed levels in the second half of the year, and unemployment has risen into double digits in many OECD countries. Fortunately, governments and central banks swiftly took unprecedented steps to save the financial system, and thus avoid a complete economic collapse as in the 1930s. In addition, most governments adopted major fiscal stimulus packages, and the operation of automatic stabilisers also offered support. A wide range of other policy measures were undertaken that overall seem to have set the stage for a gradual recovery.Although the worst may have been avoided, past experience with financial crises indicates that GDP and income levels are unlikely to return any time soon to their initially projected path. Recent OECD estimates put the permanent GDP loss at about three percentage points on average across the OECD, because of a long-lasting elevation of risk premia that will raise the cost of capital, as well as persistently higher structural unemployment (OECD, 2009b). There is a considerable amount of country-specific heterogeneity, mostly on the unemployment side (see Box 1.1), as well as large Box 1.1. The effect of the crisis on potential output over the long term Recent OECD analysis estimates that even as economies eventually recover, the crisis could well reduce medium-term potential output by about 3% in the OECD area compared with levels that would have prevailed otherwise, with much of the reduction occurring already by 2010 (see OECD, 2009b. As shown in the table below, there is a large crosscountry variation in the expected impact of the crisis on potential output, reflecting partly differences in the size of the shock as well as structural policies. While the crisis will leave OECD countries poorer than they would otherwise have been, growth may not be affected by the crisis in the long term. It is nevertheless expected to slow (from the 2-2¼ per cent per annum achieved over the seven years preceding the crisis to around 1¾ per cent per annum on average in the long term) owing to unrelated reasons, not least slower growth in potential employment due to ageing populations.

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Pharmaceutical expenditure and gross domestic product: Evidence of simultaneous effects using a two‐step instrumental variables strategy

Shaikh

Gandjour

2018

Health Economics

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This paper estimates the income elasticity of government pharmaceutical spending and assesses the simultaneous effect of such spending on gross domestic product (GDP). Using a panel dataset for 136 countries from 1995 to 2006, we employ a two‐step instrumental variable procedure where we first estimate the effect of GDP on public pharmaceutical expenditure using tourist receipts as an instrument for GDP. In the second step, we construct an adjusted pharmaceutical expenditure series where the response of public pharmaceutical expenditure to GDP is partialled out and use this endogeneity adjusted series as an instrument for pharmaceutical expenditure. Our estimations show that GDP has a strong positive impact on pharmaceutical spending with elasticity in excess of unity in countries with low spending on pharmaceuticals and countries with large economic freedom. In the second step, we find that when the quantitatively large reverse effect of GDP is accounted for, public pharmaceutical spending has a negative effect on GDP per capita particularly in countries with limited economic freedom.

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The Contribution of Economic Geography to GDP Per Capita

Cited by 20 publications

References 41 publications

Does Broadband Speed Really Matter for Driving Economic Growth? Investigating OECD Countries

Does Broadband Speed Really Matter for Driving Economic Growth? Investigating OECD Countries

Responding to the Crisis while Protecting Long-term Growth

Pharmaceutical expenditure and gross domestic product: Evidence of simultaneous effects using a two‐step instrumental variables strategy

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