Geography, Depreciation, and Growth
نویسنده
چکیده
Any visit to the seashore will confirm that it is more difficult to build a large sandcastle if one locates the project too near the lapping waves of the ocean. The sandcastle may grow well initially, but eventually a rouge wave washes out some portion of the progress. It may be possible for the sandcastle to grow on net, so long as investment in building outpaces losses to the waves, but it must be true that identical building effort would lead to a larger castle were construction sited on a portion of the beach further from the waves. Beach-goers face depreciation of sandcastle investments by waves, with an average rate of depreciation that is influenced by their location on the beach. We point out here that similar dynamics apply to capital accumulation, and thereby economic growth, which faces average rates of depreciation that differ by geography. It has been previously proposed that geography influences economic growth for many reasons. For example, geography may affect labor productivity via health, and trade costs via ruggedness and landlockedness (Gallup, Sachs and Mellinger, 1999); geography affected agricultural productivity during early stages of development which may have enduring influence (Nordhaus, 2006; Hornbeck, 2012); or geographic conditions could influence the nature of persistent economic and political institutions (Acemoglu, Johnson and Robinson, 2002; Rodrik, Subramanian and Trebbi, 2004; Dell, 2010). Yet to our knowledge, prior work has neither suggested nor documented that depreciation varies by location, and thus its potential role in influencing the wealth of nations has not been considered nor explored.
منابع مشابه
An Examination of Posttraumatic Growth and Posttraumatic Depreciation: Two Exploratory Studies
Will people report both posttraumatic growth and depreciation following a highly stressful event? Using the Posttraumatic Growth Inventory as the measure of growth, two studies compared responses to equivalent items designed to assess depreciation. Both types of change were reported, but growth was reported at much higher levels, and there was no correlation between growth and depreciation. Sma...
متن کاملTrajectories of posttraumatic growth and depreciation after two major earthquakes.
This study examined trajectories of posttraumatic growth or depreciation (i.e., positive or negative life change) in personal strength and relationships after 2 major earthquakes in Canterbury, New Zealand using group-based trajectory modeling. Participants completed questionnaires regarding posttraumatic growth or depreciation in personal strength and relationship domains 1 month after the fir...
متن کاملCroatian Economic Survey
This paper undertakes an exploratory analysis of the inflationary dynamics within the Croatian economy over the period January 1992 December 1999. Recognizing the structural break in the inflationary process corresponding to the anti-inflationary stabilization program of October 1993, the analysis proceeds by estimating an augmented vector autoregressive (VAR) model of the log first-differences...
متن کاملAgeing, Human Capital and Demographic Dividends with Endogenous Growth, Labor Supply and Foreign Capital
We modify a Lucas-type endogenous growth model to contain endogenous labour supply, imperfect international capital movements, and estimated interest and education time functions. Solutions based on realistic calibrations show that (i) the rate of human capital depreciation through ageing has a much stronger negative impact on growth than further changes in the population growth rate or the Fri...
متن کامل