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Variety, Competition, and Population in Economic Growth: Theory and Empirics

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We provide aggregate macroeconomic evidence on how, in the long-run, a diverse degree of complexity in production may affect not only the rate of economic growth, but also the correlation between the latter, population growth and the monopolistic (intermediate) markups. For a sample of OECD countries, we find that the impact of population change on economic growth is slightly positive. According to our theoretical model, this implies that the losses due to more complexity in production are lower than the corresponding specialization gains. Using a Finite Mixture Model, we also classify the countries in the sample and verify for each cluster the impact that the population growth rate and the intermediate sector's markups exert on the 5-year average real GDP growth rate.

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  • Alberto Bucci & Lorenzo Carbonari & Giovanni Trovato, 2018. "Variety, Competition, and Population in Economic Growth: Theory and Empirics," CEIS Research Paper 428, Tor Vergata University, CEIS, revised 03 Oct 2019.
    • Handle: RePEc:rtv:ceisrp:428
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    Cited by:

    1. Alfò, Marco & Carbonari, Lorenzo & Trovato, Giovanni, 2023. "On the effects of taxation on growth: an empirical assessment," Macroeconomic Dynamics, Cambridge University Press, vol. 27(5), pages 1289-1318, July.
    2. Sequeira, Tiago Neves & Gil, Pedro Mazeda & Afonso, Oscar, 2018. "Endogenous growth and entropy," Journal of Economic Behavior & Organization, Elsevier, vol. 154(C), pages 100-120.
    3. Alberto Bucci, 2022. "P. Aghion, C. Antonin, S. Bunel, The power of creative destruction: Economic upheaval and the wealth of nations," Journal of Economics, Springer, vol. 135(3), pages 299-306, April.
    4. Antonelli, Cristiano & Crespi, Francesco & Quatraro, Francesco, 2022. "Knowledge complexity and the mechanisms of knowledge generation and exploitation: The European evidence," Research Policy, Elsevier, vol. 51(8).
    5. Bucci, Alberto & Carbonari, Lorenzo & Gil, Pedro Mazeda & Trovato, Giovanni, 2021. "Economic growth and innovation complexity: An empirical estimation of a Hidden Markov Model," Economic Modelling, Elsevier, vol. 98(C), pages 86-99.
    6. Alberto Bucci & Lorenzo Carbonari & Giovanni Trovato & Pedro Trivin, 2024. "Human Capital-based Growth with Depopulation and Class-size Effects: Theory and Empirics," CEIS Research Paper 575, Tor Vergata University, CEIS, revised 30 Apr 2024.
    7. Sakiru, Solarin Adebola & Gil-Alana, Luis A. & Gonzalez-Blanch, Maria Jesus, 2022. "Persistence of economic complexity in OECD countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 603(C).

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    More about this item

    Keywords

    Economic growth; Population growth; Variety-expansion; Specialization; Complexity; Product market competition.;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • J1 - Labor and Demographic Economics - - Demographic Economics

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