Scale Effects, Savings and Factor Shares in a Human Capital-based Growth Model with Physical Capital Accumulation

2009 ◽  
Vol 23 (3) ◽  
pp. 291-307
Author(s):  
Alberto Bucci
Keyword(s):  
Human Capital ◽  
Growth Model ◽  
Capital Accumulation ◽  
Scale Effects ◽  
Physical Capital ◽  
Factor Shares ◽  
Physical Capital Accumulation

scholarly journals Optimal taxation with unobservable investment in human capital

2019 ◽  
Vol 72 (2) ◽  
pp. 501-516 ◽  
Author(s):  
Catarina Reis
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Optimal Taxation ◽  
Capital Investment ◽  
Physical Capital ◽  
Income Taxes ◽  
Long Run ◽  
Positive Rate ◽  
The Government ◽  
Physical Capital Accumulation

Abstract In a Ramsey model of optimal taxation, if human capital investment can be observed separately from consumption, it is optimal not to distort human or physical capital accumulation in the long run, and only labour income taxes should be used. However, in reality the government can’t always distinguish between investment in human capital and pure consumption, so a tax on labour or consumption will necessarily tax human capital. We find that when investment in human capital is unobservable, the optimal policy is to tax human capital at a positive rate, even in the long run. Whether physical capital should be taxed or not depends on its degree of complementarity with human capital versus labour.

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

2015 ◽  
Vol 65 (1) ◽  
pp. 27-50 ◽  
Author(s):  
Péter Földvári ◽  
Bas van Leeuwen ◽  
Dmitry Didenko
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Growth Models ◽  
Physical Capital ◽  
Early Years ◽  
National Accounts ◽  
System Of National Accounts ◽  
Long Run ◽  
Physical Capital Accumulation

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.

scholarly journals IS HUMAN CAPITAL ACCUMULATION A GROWTH DRIVER IN NIGERIA? AN EMPIRICAL INVESTIGATION

2018 ◽  
Vol 3 (2) ◽  
pp. 66-77
Author(s):  
Hassan O. Ozekhome
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Capital Accumulation ◽  
Physical Capital ◽  
The Other ◽  
Series Data ◽  
Human Capital Accumulation ◽  
Infrastructural Development ◽  
Long Run ◽  
Physical Capital Accumulation

Accumulation of human capital is critical to sustained economic growth in the long run, since it facilitates the efficient absorption of new capital developments, improves the speed of adaptation of entrepreneurs and generates innovation necessary for sustained economic growth. It is against this premise this study investigate the human-capital accumulation growth-nexus in Nigeria. Employing a dynamic approach, involving test for unit roots, and cointegration, and finally, the Generalized Method of Moments (GMM) estimation techniques on annual time series data, covering the period 1981 to 2016, sourced from the World Bank Development Indicators (WDI) and Central Bank of Nigeria (CBN) Statistical Bulletin, the empirical findings reveal that human and physical capital accumulation significantly induce rapid and sustained economic growth in the long-run. The other variables- infrastructural development (measured by ICT infrastructure) and industrial output (a measure of industrialization) have positive but weak impacts on economic growth, on account of the weak infrastructural development, and low level of industrialization in Nigeria. Inflation rate (a measure of macroeconomic policy environment) on the other hand, is found to have a militating effect on economic growth. We recommend amongst others; sustained investments in human and physical capital accumulation, stable and coherent macroeconomic policies, particularly with respect to taming of domestic inflationary pressures, supportive institutional structures and aggressive industrialization-enhancing policies, in order to enhance sustained economic growth in Nigeria.

scholarly journals Output Growth Decomposition in the Presence of Input Quality Effects: A Stochastic Frontier Approach

2019 ◽  
Vol 20 (4) ◽  
pp. 383-409
Author(s):  
Yasmina Rim Limam ◽  
Giampaolo Garzarelli ◽  
Stephen M. Miller
Keyword(s):  
Human Capital ◽  
East Asia ◽  
Capital Accumulation ◽  
Stochastic Frontier ◽  
Physical Capital ◽  
Time Frame ◽  
Output Growth ◽  
Input Quality ◽  
Physical Capital Accumulation

Abstract How do physical capital accumulation and total factor productivity (TFP) individually add to economic growth? We approach this question from the perspective of the quality of physical capital and labor, namely the age of physical capital and human capital. We build a unique dataset by explicitly calculating the age of physical capital for each country and each year of our time frame and estimate a stochastic frontier production function incorporating input quality in five regions of countries (Africa, East Asia, Latin America, South Asia and West). Physical capital accumulation generally proves much more important than either the improved quality of factors or TFP growth in explaining output growth. The age of capital decreases growth in all regions except in Africa, while human capital increases growth in all regions except in East Asia.

scholarly journals PHASES OF ECONOMIC DEVELOPMENT IN AN ENDOGENOUS GROWTH MODEL WITH INNOVATION AND EDUCATION

2021 ◽  
pp. 78-87
Author(s):  
Ibtissem Aribi ◽  
Lobna Ben Hassen
Keyword(s):  
Human Capital ◽  
Endogenous Growth ◽  
Growth Model ◽  
Capital Accumulation ◽  
Physical Capital ◽  
Third Phase ◽  
Long Run ◽  
Support For Innovation ◽  
Endogenous Growth Model ◽  
Main Engine

This paper analyzes the transitional dynamics of an endogenous growth model with physical capital, human capital and R&D in which both human capital and innovation drives long run growth. The model suggests that the developing economy follows different stages of development. The first phase is characterized by physical capital accumulation. At the second stage, human capital accumulation represents the main engine of long run growth. The third phase is identified by an increasing variety of intermediate good originating from innovation. However, innovation is not assured for poor economies. In this case, permanent support for innovation can lead a sustainable exit from poverty trap.

Physical capital stock, technological upgrading and modernisation in Hungary

2005 ◽  
Vol 55 (2) ◽  
pp. 201-221 ◽  
Author(s):  
Andrea Szalavetz
Keyword(s):  
Capital Accumulation ◽  
Physical Capital ◽  
Developed Countries ◽  
Point Of View ◽  
Technology Generation ◽  
Development Policies ◽  
Specific Factors ◽  
Physical Capital Accumulation

This paper discusses the relation between the quality and quantity indicators of physical capital and modernisation. While international academic literature emphasises the role of intangible factors enabling technology generation and absorption rather than that of physical capital accumulation, this paper argues that the quantity and quality of physical capital are important modernisation factors, particularly in the case of small, undercapitalised countries that recently integrated into the world economy. The paper shows that in Hungary, as opposed to developed countries, the technological upgrading of capital assets was not necessarily accompanied by the upgrading of human capital i.e. the thesis of capital skill complementarity did not apply to the first decade of transformation and capital accumulation in Hungary. Finally, the paper shows that there are large differences between the average technological levels of individual industries. The dualism of the Hungarian economy, which is also manifest in terms of differences in the size of individual industries' technological gaps, is a disadvantage from the point of view of competitiveness. The increasing differences in the size of the technological gaps can be explained not only with industry-specific factors, but also with the weakness of technology and regional development policies, as well as with institutional deficiencies.

scholarly journals A Discrete Heterogeneous-Group Economic Growth Model with Endogenous Leisure Time

2009 ◽  
Vol 2009 ◽  
pp. 1-17
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Income Distribution ◽  
Growth Model ◽  
Time Allocation ◽  
Capital Accumulation ◽  
Economic Growth Model ◽  
National Economic ◽  
The Rich ◽  
Main Engine

This paper proposes a one-sector multigroup growth model with endogenous labor supply in discrete time. Proposing an alternative approach to behavior of households, we examine the dynamics of wealth and income distribution in a competitive economy with capital accumulation as the main engine of economic growth. We show how human capital levels, preferences, and labor force of heterogeneous households determine the national economic growth, wealth, and income distribution and time allocation of the groups. By simulation we demonstrate, for instance, that in the three-group economy when the rich group's human capital is improved, all the groups will economically benefit, and the leisure times of all the groups are reduced but when any other group's human capital is improved, the group will economically benefit, the other two groups economically lose, and the leisure times of all the groups are increased.

On the Effectiveness of Growth- Enhancing Policies in a Model of Growth Without Scale Effects

2002 ◽  
Vol 3 (3) ◽  
pp. 339-346 ◽  
Author(s):  
Lutz G. Arnold
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Scale Effects ◽  
Growth Models ◽  
Empirical Studies ◽  
Human Capital Accumulation ◽  
Accelerate Growth

Abstract Standard R&D growth models have two disturbing properties: the presence of scale effects (i.e., the prediction that larger economies grow faster) and the implication that there is a multitude of growth-enhancing policies. Recent models of growth without scale effects, such as Segerstrom's (1998), not only remove the counterfactual scale effect, but also imply that the growth rate does not react to any kind of economic policy. They share a different disturbing property, however: economic growth depends positively on population growth, and the economy cannot grow in the absence of population growth. The present paper integrates human capital accumulation into Segerstrom's (1998) model of growth without scale effects. Consistent with many empirical studies, growth is positively related not to population growth, but to investment in human capital. And there is one way to accelerate growth: subsidizing education.

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