Does Human Capital Strongly Affect Economic Growth Rates? Yes, But Only If Assessed Properly

2004 ◽  
Vol 3 (2) ◽  
pp. 115-134 ◽  
Author(s):  
Erich Weede
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Empirical Evidence ◽  
Growth Rates ◽  
Capital Endowment ◽  
Order Of Magnitude ◽  
Growth Equations ◽  
Catch Up ◽  
Economic Growth Rates ◽  
Human Capital Endowment

AbstractAlthough modern growth theories regard human capital endowment as a determinant of economic growth rates, econometric research does not consistently support this view by empirical evidence. In principle, this discrepancy might arise either from misleading theories or from poor measurement of human capital endowment. Here, it is argued that poor measurement is the culprit, and that one should substitute results from psychological testing, i.e.IQ, for widely accepted measures based on schooling. In order to demonstrate both the superiority of IQ over schooling derived measures as well as the robustness of IQ effects on growth, the new measure is entered in the Mankiw, Romer and Weil and the De Long and Summers frameworks which differ in the specification of growth equations and, in particular, in their treatment of investment. It is demonstrated that IQ effects are at least about equally strong and robust determinants of growth as catch-up opportunities, whether investment is included or excluded, narrowly or broadly defined. If investment is included, its effects are in the same order of magnitude as those of catch-up opportunities or IQ. Since IQ is correlated with state antiquity, since state antiquity might offer

scholarly journals On a Theoretical Analysis of the Family and Economic Growth

2019 ◽  
Vol 5 (2) ◽  
pp. 17
Author(s):  
Stephen Olabode ODEDOYIN
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Theoretical Analysis ◽  
Analytical Technique ◽  
Capital Endowment ◽  
The Family ◽  
Human Capital Endowment

The paper considers the prospects of constructing theoretical postulates on the family that is consistent with some of the main features of economic growth. Theoretical abstraction of the parameters involved based on the intergenerational dynastic model is analyzed and compared to evidence. Descriptive and analytical technique were employed in analyzing the model. Nonmarket productivity levels and their effect on initial human capital endowment of households were also considered.

scholarly journals Improving the Efficiency of the Russian Budgetary Policy in the Context of Economic Growth Fueling

2019 ◽  
Vol 12 (1) ◽  
pp. 47-56
Author(s):  
N. N. Semenova ◽  
O. I. Eremina ◽  
G. V. Morozova ◽  
Yu. Yu. Filichkina
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Economic Development ◽  
Growth Rates ◽  
Government Spending ◽  
Government Expenditures ◽  
Budgetary Policy ◽  
The Russian Federation ◽  
Economic Growth Rates ◽  
The Impact

In modern life, the budgetary policy is a crucial tool for financial regulation of the Russian economic development from the standpoint of ensuring stable growth rates. The importance of the budgetary policy for the sustainable economic development is determined by the following factors: first, at the macroeconomic level it helps to achieve macroeconomic stability (a necessary condition for economic growth); second, at the microlevel it stimulates investment, accumulation of human capital and the increase in factor productivity. The state influences the economic growth rates and quality through productive expenditures as one of the most important components of aggregate demand.The subject of the researchis the impact of productive government expenditures on the economic growth rates in the Russian Federation at the stages of crisis and post-crisis development of the national economy (2008–2016).The purpose of the researchwas to assess the budgetary policy of the Russian Federation in the context of boosting the economic growth and to develop proposals to increase its efficiency. The paper examines the existing theoretical approaches to assessment of the impact of government expenditures on the economic development. The authors also used statistical data to measure the interrelationship between budgetary investments in science, basic and human capital and the GDP volumes. The authors formulated recommendations on improving the efficiency of the Russian budgetary policy, in particular: identifying priorities for budget fund expenditures; changing the existing structure of government spending; expanding the scope of the public-private partnership to promote investment and innovation activities. The paperconcludesthat the lack of medium- and long-term reserves for increasing government expenditures necessitates the change in the structure of government spending through reducing overheads and increasing production costs with the purpose of ensuring sustainable economic growth.

scholarly journals Examining GDP Growth and Its Volatility: An Episodic Approach

Entropy ◽  
2021 ◽  
Vol 23 (7) ◽  
pp. 890
Author(s):  
Jakub Bartak ◽  
Łukasz Jabłoński ◽  
Agnieszka Jastrzębska
Keyword(s):  
Economic Growth ◽  
Genetic Algorithm ◽  
Time Series ◽  
Human Capital ◽  
Growth Rates ◽  
Structural Breaks ◽  
Negative Relationship ◽  
Gdp Per Capita ◽  
Gdp Growth ◽  
Per Capita

In this paper, we study economic growth and its volatility from an episodic perspective. We first demonstrate the ability of the genetic algorithm to detect shifts in the volatility and levels of a given time series. Having shown that it works well, we then use it to detect structural breaks that segment the GDP per capita time series into episodes characterized by different means and volatility of growth rates. We further investigate whether a volatile economy is likely to grow more slowly and analyze the determinants of high/low growth with high/low volatility patterns. The main results indicate a negative relationship between volatility and growth. Moreover, the results suggest that international trade simultaneously promotes growth and increases volatility, human capital promotes growth and stability, and financial development reduces volatility and negatively correlates with growth.

scholarly journals A NOTE ON ECONOMIC GROWTH WITH SUBSISTENCE CONSUMPTION

2010 ◽  
Vol 14 (5) ◽  
pp. 763-771 ◽  
Author(s):  
Holger Strulik
Keyword(s):  
Economic Growth ◽  
Growth Model ◽  
Growth Rates ◽  
Degree Of Freedom ◽  
Controversial Issue ◽  
Historical Evolution ◽  
Transitional Dynamics ◽  
Economic Growth Rates ◽  
Over Time ◽  
Savings Rates

It is well known that the performance of simple models of economic growth improves substantially through the introduction of subsistence consumption. How to compute subsistence needs, however, is a difficult and controversial issue. Here, I reconsider the linear (Ak) growth model with subsistence consumption and show that the evolution of savings rates and economic growth rates over time is independent of the size of subsistence needs. The model is thus more general and less subject to arbitrariness than might have been thought initially. Quantitatively, it is shown that, although there is no degree of freedom to manipulate transitional dynamics, the model approximates the historical evolution of savings rates and growth rates reasonably well.

The Effects of Human Rights on Economic Growth, 1965 to 2010

2016 ◽  
Vol 2 (4) ◽  
pp. 375-412 ◽  
Author(s):  
Wade M. Cole
Keyword(s):  
Economic Growth ◽  
Human Rights ◽  
Growth Rates ◽  
Research Question ◽  
Civil Liberties ◽  
Domestic Investment ◽  
Reverse Causality ◽  
Bodily Integrity ◽  
Explanatory Factors ◽  
Economic Growth Rates

A long-standing research question asks whether democracy promotes or inhibits development, but relatively few studies explore the developmental consequences of human rights. I analyze the effect of respect for bodily integrity rights and civil liberties on economic growth rates, measured as percentage changes in gross domestic product over pooled five-year intervals, for 138 countries between 1965 and 2010. Bodily integrity rights entail fundamental protections against torture, political imprisonment, extrajudicial killing, and disappearances. Civil liberties include the freedoms of speech, assembly, religion, and movement. The analyses make use of estimators designed to isolate causal directionality. I find that improvements in countries’ rated bodily integrity practices boost economic growth rates, even after accounting for other important explanatory factors and the possibility of reverse causality. Additional analyses suggest that this effect operates largely through increased domestic investment. Static levels in bodily integrity scores, conversely, have no effect on growth; neither do static levels of or dynamic changes in civil liberties.

M&A vs. Greenfield

2018 ◽  
pp. 169-185
Author(s):  
Sana Moid
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Mergers And Acquisitions ◽  
Empirical Evidence ◽  
International Market ◽  
Time Effect ◽  
Entry Modes ◽  
Host Countries ◽  
Bidirectional Relationship ◽  
The Right

The chapter has raised two critically important questions. First, is the M&A boom a one-time effect of privatization, or is it likely to be followed by a rise in Greenfield investment? Second, do these two types of FDI mode have different macroeconomic consequences in terms of aggregate investment and growth? The main purpose of this chapter is to analyze the two entry modes, mergers and acquisitions and Greenfield investment, specifically, and to present a comparative view of the same and how it leads to the economic growth of a nation. It is concluded that one should choose the right mode according to the different situation about the firms in the international market. The present chapter also concludes that Greenfields and M&As do have a positive homogenous effect on growth. Additionally, the enhancement of human capital is an important condition for the host countries to derive the maximum benefits from Greenfields and M&As. Also, there is empirical evidence of a two-way linkage between FDI and growth. However, the bidirectional relationship exists only for the M&A's growth nexus.

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