https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf

The future of employment: How susceptible are jobs to computerisation?

Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

Part 1 Unemployment in the model of balanced growth: the labour market long-run equilibrium and balanced growth adjustment dynamics. Part 2 further ananlysis of the labour market: search intensity and job advertising.

Equilibrium Unemployment Theory

Finance, entrepreneurship and growth

Development of the banking sector exerts a large, causal impact on total factor productivity growth, which in turn causes GDP to grow. Whether banking development has a long-run effect on capital growth or private saving remains to be seen. Beck, Levine, and Loayza evaluate whether the level of development in the banking sector exerts a causal impact on economic growth and its sources- total factor productivity growth, physical capital accumulation, and private saving. They use (1) a pure cross-country instrumental variable estimator to extract the exogenous component of banking development and (2) a new panel technique that controls for country-specific effects and endogeneity. They find that: - Banks do exert a large, causal impact on total factor productivity growth, which feeds through to overall GDP growth. - The long-run links between banking development and both capital growth and private savings are more tenuous. This paper - a product of Finance, Development Research Group - is part of a larger effort in the group to understand the links between the financial system and economic growth.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID569227_code382649.pdf?abstractid=569227&rulid=5428171&mirid=4

Finance and the Sources of Growth

In this chapter we argue that the endogenous growth model with quality-improving innovations provides a framework for analyzing the determinants of long-run growth and convergence that is versatile, simple and empirically useful. Versatile, as the same framework can be used to analyze how growth interacts with development and cross-country convergence and divergence, how it interacts with industrial organization and in particular market structure, and how it interacts with organizations and institutional change. Simple, since all these aspects can be analyzed using the same elementary model. Empirically useful, as the framework generates a whole range of new microeconomic and macroeconomic predictions while it addresses empirical criticisms raised by other endogenous growth models in the literature.

Chapter 2 Growth with Quality-Improving Innovations: An Integrated Framework

The revival of growth theory in the 1980s was originally stimulated by ‘technical progress within economics’— by the development of new tools for handling old ideas. The neoclassical models of the 1960s had already shown that growth in per capita income was sustainable only through the continual growth of technological knowledge. A so, it had long been understood that technological knowledge, like capital, grows only because people find it profitable to make it grow; research, development, study, experimentation and learning by doing all employ resources with alternative uses. The neoclassical model of Solow and Swan ignored these activities and treated technological growth as exogenous, not on grounds of realism but because there were no available techniques for incorporating them into standard economic analysis.

A Schumpeterian Perspective on Growth and Competition

This paper addresses the problem of accounting theoretically for the persistence of large-scale unemployment. It briefly reviews some of the well-known shortcomings of the Keynesian account based upon sticky wages and prices and upon Robert Clower's (1965) concept of effective demand, arguing that these shortcomings can be seen as a failure explicitly to integrate transaction costs into the theory of unemployment. The main constructive contribution of the paper is an example of a simple macro model, along the lines of Robert Barro and Herschel Grossman (1971), in which transaction costs are made explicit. An essential part of this example is an externality of the sort suggested by Peter Diamond (1982). The example provides an account of persistent unemployment with many Keynesian features, yet without some of the Keynesian shortcomings. In particular it assumes perfect wage and price flexibility.

/pdf/transaction-costs-in-the-theory-of-unemployment-y2t79y7798.pdf

Transaction Costs in the Theory of Unemployment

This paper is an exploratory analysis of the role that banks play in supporting what Jevons called the "mechanism of exchange.'' It considers a model economy in which exchange activities are facilitated and coordinated by a self-organizing network of entrepreneurial trading firms. Collectively, these firms play the part of the Walrasian auctioneer, matching buyers with sellers and helping the economy to reach prices at which peoples' trading plans are mutually compatible. Banks affect macroeconomic performance in this economy because their lending activities facilitate the entry and influence the exit decisions of trading firms. Both entry and exit have ambiguous effects on performance, and we resort to computational analysis to understand how they are resolved. Our analysis draws an important distinction between normal and worst-case scenarios, with the economy experiencing systemic breakdowns in the latter. We show that banks can provide a "financial stabilizer'' that more than counteracts the familiar financial accelerator, and that the stabilizing role of the banking system is particularly apparent in worst-case scenarios. In line with this result, we also find that under less restrictive lending standards banks are able to more effectively improve macroeconomic performance in the worst-case scenarios.

/pdf/banks-market-organization-and-macroeconomic-performance-an-1m9i2xjjfy.pdf

Banks, Market Organization, and Macroeconomic Performance: An Agent-Based Computational Analysis

We construct a Schumpeterian growth theory consistent with the divergence in per-capita income that has occurred between countries since the mid 19th Century, and with the convergence that occurred between the richest countries during the second half of the 20th Century. The theory assumes that technological change underwent a transformation late in the 19th Century, associated with modern R&D labs. Countries sort themselves into three groups. Those in the highest group converge to a steady state where they do leading edge R&D, while those in the intermediate group converge to a steady state where they implement technologies developed elsewhere. Countries in both of these groups grow at the same rate in the long run, as a result of technology transfer, but inequality between them increases during the transition. Countries in the lowest group grow at a slower rate, with relative incomes that fall asymptotically to zero. Once modern R&D has been introduced, a country may have only a finite window of opportunity in which to introduce the institutions that support it.

Peter Howitt

Papers

Chapter 2 Growth with Quality-Improving Innovations: An Integrated Framework

A Schumpeterian Perspective on Growth and Competition

Transaction Costs in the Theory of Unemployment

Banks, Market Organization, and Macroeconomic Performance: An Agent-Based Computational Analysis

R&D, Implementation and Stagnation: A Schumpeterian Theory of Convergence Clubs