British economic growth and the business cycle, 1700-1870 : annual estimates

This paper provides the first annual GDP series for Great Britain over the period 1700-1870. The series is constructed in real terms from the output side, using volume indicators and value added weights. Sectoral estimates are provided for agriculture, industry and services, and for a number of sub-sectors. Estimates of nominal GDP are also provided, based on a benchmark for 1841 and projected back to 1700 and forward to 1870 using the real output series and sectoral price indices. The new data are used to provide a consistent account of economic growth and the business cycle. The results are broadly consistent with the long run path of real output suggested by Crafts and Harley, although growth rates for sub-periods differ, largely as a result of changes in the growth of agriculture. Nominal GDP increased more rapidly than suggested by Lindert and Williamson during the eighteenth century, and more slowly than suggested by Deane and Cole during the first half of the nineteenth century, as a result of differences in the price indices. We also refine the business cycle chronologies of Ashton and Gayer, Rostow and Schwartz

Local Subspace-Based Outlier Detection using Global Neighbourhoods

Outlier detection in high-dimensional data is a challenging yet important task, as it has applications in, e.g., fraud detection and quality control. State-of-the-art density-based algorithms perform well because they 1) take the local neighbourhoods of data points into account and 2) consider feature subspaces. In highly complex and high-dimensional data, however, existing methods are likely to overlook important outliers because they do not explicitly take into account that the data is often a mixture distribution of multiple components. We therefore introduce GLOSS, an algorithm that performs local subspace outlier detection using global neighbourhoods. Experiments on synthetic data demonstrate that GLOSS more accurately detects local outliers in mixed data than its competitors. Moreover, experiments on real-world data show that our approach identifies relevant outliers overlooked by existing methods, confirming that one should keep an eye on the global perspective even when doing local outlier detection.Comment: Short version accepted at IEEE BigData 201

Capital formation and economic growth under central planning and transition: A theoretical and empirical analysis, ca. 1920–2008

According to the consensus view, it was primarily physical capital accumulation that drove economic growth during the early years of state socialism. Growth models incorporating both human and physical capital accumulation led to the conclusion that a high physical/human capital ratio can cause a lower economic growth in the long run, hence offering an explanation for the failure of socialist economies. In this paper, we show theoretically and empirically that according to the logic of the socialist planner, it was optimal to achieve a higher physical to human capital ratio in socialist countries than in the West. Using a VAR analysis, we find empirical confirmation that within the Material Product System of national accounting, the relative dominance of investment in physical capital accumulation relative to human capital was indeed more efficient than under the system of national accounts

British economic growth : 1270 - 1870

We provide annual estimates of GDP for England between 1270 and 1700 and for Great Britain between 1700 and 1870, constructed from the output side. The GDP data are combined with population estimates to calculate GDP per capita. We find English per capita income growth of 0.20 per cent per annum between 1270 and 1700, although growth was episodic, with the strongest growth during the Black Death crisis of the fourteenth century and in the second half of the seventeenth century. For the period 1700-1870, we find British per capita income growth of 0.48 per cent, broadly in line with the widely accepted Crafts/Harley estimates. This modest trend growth in per capita income since 1270 suggests that, working back from the present, living standards in the late medieval period were well above “bare bones subsistence”. This can be reconciled with modest levels of kilocalorie consumption per head because of the very large share of pastoral production in agriculture

English economic growth, 1270-1700

We provide annual estimates of GDP for England over the period 1270-1700, constructed from the output side. The GDP data are combined with population estimates to calculate GDP per capita. Sectoral price data and estimates of nominal GDP are also provided. We find per capita income growth of 0.20 per cent per annum, although growth was episodic, with the strongest growth after the Black Death and in the second half of the seventeenth century. Living standards in the late medieval period were well above “bare bones subsistence”, although levels of kilocalorie consumption per head were modest because of the very large share of pastoral production in agriculture

Education as a driver of income inequality in twentieth-century Africa

In this paper, we address the issue of how education affected income inequality in twentieth-century Africa. Three channels are identified through which education may affect income inequality. First, an increase in the average educational level is correlated with an increase in average income, which, ceteris paribus, reduces inequality. Second, a reduction in educational inequality may, given a positive correlation between education level and income, reduce income inequality. Thirdly, an increase in the supply of education may decrease the price of skilled labour thus lowering income inequality. We find that in the long-run education does not affect income growth, indicating that in twentieth-century Africa it was inspiration (i.e., Total Factor Productivity [TFP]) rather than perspiration (i.e., education and physical capital) that drove economic development. Testing for the effects of the remaining two channels, we found a significant non-linear relationship between educational and income inequality suggesting that, contrary to the level of education, these two channels were important in determining income inequality in Africa. Taking an example from the end of the twentieth century, if educational equality had been eliminated, then income inequality would decline by no less than 81%

Regional human capital in Republican and New China: Its spread, quality and effects on economic growth

In recent decades there has been increasing attention for Chinese economic development. There has been a big debate though if its growth is caused by capital accumulation (perspiration factors) or driven by Total Factor Productivity (TFP) growth (inspiration factors). The difference between both stances is quite substantial since, if the perspiration theory is correct, one expects the growth of the Chinese economy to slow down over time as the capital accumulation grows increasingly less efficient. However, so far this question is difficult to analyse for China since we lack information on one of the factors of production, human capital. To analyse this question, in this paper we develop a new dataset on human capital for the provinces of China between 1922 and 2010. Using our new dataset, together with physical capital and per capita GDP, allows us to do a TFP analysis for sub periods. We find a continuously negative TFP growth suggesting that reduction in productivity was a structural feature of the Chinese economy. If true, this was to lend support to the perspiration theory and would suggest a slowdown of the Chinese economy in the future. However, standard growth accounting allocates both technical efficiency of the factors of production and the general technical development to TFP. Subtracting technical efficiency from TFP growth, we find that general technological development turns increasingly positive in the 1990s and 2000s. This suggests that, whereas until the reform period China was largely driven by capital accumulation, afterwards general technical development got an increasingly prominent place giving hope for continued economic development in the future

Regional human capital in Republican and New China: Its spread, quality and effects on economic growth

In recent decades there has been increasing attention for Chinese economic development. There has been a big debate though if its growth is caused by capital accumulation (perspiration factors) or driven by Total Factor Productivity (TFP) growth (inspiration factors). The difference between both stances is quite substantial since, if the perspiration theory is correct, one expects the growth of the Chinese economy to slow down over time as the capital accumulation grows increasingly less efficient. However, so far this question is difficult to analyse for China since we lack information on one of the factors of production, human capital. To analyse this question, in this paper we develop a new dataset on human capital for the provinces of China between 1922 and 2010. Using our new dataset, together with physical capital and per capita GDP, allows us to do a TFP analysis for sub periods. We find a continuously negative TFP growth suggesting that reduction in productivity was a structural feature of the Chinese economy. If true, this was to lend support to the perspiration theory and would suggest a slowdown of the Chinese economy in the future. However, standard growth accounting allocates both technical efficiency of the factors of production and the general technical development to TFP. Subtracting technical efficiency from TFP growth, we find that general technological development turns increasingly positive in the 1990s and 2000s. This suggests that, whereas until the reform period China was largely driven by capital accumulation, afterwards general technical development got an increasingly prominent place giving hope for continued economic development in the future

Education as a driver of income inequality in twentieth-century Africa

In this paper, we address the issue of how education affected income inequality in twentieth-century Africa. Three channels are identified through which education may affect income inequality. First, an increase in the average educational level is correlated with an increase in average income, which, ceteris paribus, reduces inequality. Second, a reduction in educational inequality may, given a positive correlation between education level and income, reduce income inequality. Thirdly, an increase in the supply of education may decrease the price of skilled labour thus lowering income inequality. We find that in the long-run education does not affect income growth, indicating that in twentieth-century Africa it was inspiration (i.e., Total Factor Productivity [TFP]) rather than perspiration (i.e., education and physical capital) that drove economic development. Testing for the effects of the remaining two channels, we found a significant non-linear relationship between educational and income inequality suggesting that, contrary to the level of education, these two channels were important in determining income inequality in Africa. Taking an example from the end of the twentieth century, if educational equality had been eliminated, then income inequality would decline by no less than 81%