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

48 Pages Posted: 17 Apr 2018 Last revised: 6 Oct 2019

See all articles by Alberto Bucci

Alberto Bucci

University of Milan - Department of Business Policy and Economics

Lorenzo Carbonari

Università di Roma "Tor Vergata"

Giovanni Trovato

University of Rome Tor Vergata - Faculty of Economics

Date Written: June 3, 2019

Abstract

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.

Keywords: Economic growth; Population growth; Variety-expansion; Specialization; Complexity; Product market competition.

JEL Classification: O3, O4, J1

Suggested Citation

Bucci, Alberto and Carbonari, Lorenzo and Trovato, Giovanni, Variety, Competition, and Population in Economic Growth: Theory and Empirics (June 3, 2019). CEIS Working Paper No. 428. Available at SSRN: https://ssrn.com/abstract=3159247 or http://dx.doi.org/10.2139/ssrn.3159247

Alberto Bucci

University of Milan - Department of Business Policy and Economics ( email )

Via Mercalli, 23
20122-Milano
Italy
+39(0)2 50321.463 (Phone)
+39(0)2 50321.505 (Fax)

Lorenzo Carbonari (Contact Author)

Università di Roma "Tor Vergata" ( email )

Via Columbia 2
Roma, Lazio 00133
Italy

Giovanni Trovato

University of Rome Tor Vergata - Faculty of Economics ( email )

Via Columbia n.2
Rome, rome 00100
Italy

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