Increasing returns to scale are important for economic growth, generating higher levels of productivity. This view was earlier suggested by Verdoorn (1949) and Kaldor (1966) in formulating the basic Laws of economic growth. The later demand-orientated approach based on the export-led growth, gave higher importance to the non-price competitiveness reflected in the income elasticities of trade, as the main determinants of the long-term economic growth, along with external demand. This view was expressed in Thirlwall’s Law (1979) on the balance- of-payments equilibrium growth inspired from the early Harrodian concept of the foreign trade multiplier. This paper aims at considering both concepts, that is, increasing returns to scale (through the Verdoorn’s Law) and non-price competition (through the Thirlwall’s Law) in order to access whether growth adjustments over time are due mostly to productivity changes or due to changes in competitiveness. To do so, we employ a regression analysis which comprises a set of 23 OECD countries over the period 1980-2016. The estimation approach sheds light on whether growth adjustments between the balance-of-payments growth rate and that of actual or potential income are driven by improvements in productivity or improvements in non-price competiveness, or in both.

Non-price competitiveness given by the ratio of the income elasticity of the demand for exports relatively to the income elasticity of the demand for imports is the key factor for measuring the competitiveness of an economy associated with the quality of the produced goods. This factor is essential in the export-led growth theory and the balance-of-payments constraint hypothesis advocated by Thirlwall´s Law (1979). Increasing returns to scale in the production process are also important for generating a cumulative causation growth circle and this factor has been earlier identified by Verdoorn (1949) and later by Kaldor (1966). According to Palley (2002) it is the non-price competiveness (through mostly changes in the income elasticity of the demand for imports) that adjusts to close the gap between the actual and the potential income. Setterfield (2012) on the other hand attributes higher importance to increasing returns to scale as the responsible for closing the income gap, implying changes in the Verdoorn coefficient. The aim of this paper is to shed light to this discussion bringing empirical evidence that shows how the non-price competitiveness (through the income elasticity of imports) and productivity (through increasing returns to scale) react with respect to previous income gaps. It is verified that both factors react significantly to changes in passed income gap but the reaction of the non-price competitiveness is more pronounced. 

The relationship between renewable energy sources and economic growth has attracted the interest of researchers in recent years. However, the analysis has focused mostly on measuring the impact of renewable energy consumption on economic performance (such as economic growth) that does not reflect the quality of standards of living. We employ a different approach measuring the impact of renewable energy consumption on the Human Development Index (HDI) that considers these qualitative characteristics associated with better health and educational standards along with income performance. Additionally, we develop a simultaneous equation system approach that describes the interrelations between economic variables, renewable energy and pollution emissions with feedback effect tendencies. We provide robust evidence using panel data for a set of 28 OECD countries over the period 2004-2015. The system of equations is estimated by 3sls considering a static and dynamic specification of the model. It is shown that renewable energy consumption along with human and physical capital are important factors for explaining the sustainable development level of the countries considered. Renewable energy consumption is mostly determined by higher levels of human capital, the R&D spending and the stage of countries’ development. Factors like the stage of development, total energy consumption, renewable energy consumption and standard levels of education are important elements for explaining environmental pollution (measured by CO2 emissions per capita).  It is also established a non-linear relationship between the countries` stage of development and carbon emissions. 

The aim of this study is to analyse the circular linkages between recycling and economic development, where renewable energy plays an additional role in this process. We use a two-equation model, which describes a cumulative causation process with feedback effects, where recycling (among other growth inducing factors) is assumed to be important for sustainable economic development (given by the Human Development Index) and vice-versa. The system of simultaneous equations is estimated by 3sls, both in a static form and introducing dynamics into the model, for a panel of 28 OECD countries over the period 2004-2015. The empirical evidence suggests a strong relationship between the economic development level and the recycling rate with feedback effects, supporting the idea of a circular cumulative causation process driven mostly by higher human capital skills and, to a lesser extent, by innovation. Atmospheric pollution also stimulates the recycling process.

We contribute to the renewable energy consumption-income (and growth) nexus literature by performing an empirical study on a worldwide panel data, also accounting for cross-country dependency using a parsimonious specification that accounts for traditional sources of income differences as well as institutional features of the countries. Our results present either negative or nonsignificant influence of the share of renewable energies consumption to economic growth and income.