Econometric Society 57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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HUMAN CAPITAL AND CONVERGENCE IN A NON-SCALE R&D GROWTH MODEL


Category: Economic Theory
Human Capital
Tuesday 27th August 2002, 09:30 - 11:00, Room: 4.8
Session Chair(s): Arpad Abraham, Universitat Pompeu Fabra , SPAIN and London Business School, UNITED KINGDOM

Presenter(s): Perez-Sebastian, Fidel

Co-Author(s): Papageorgiou, Chris

Keyword(s): Convergence speed, Growth, Human capital, R&D

JEL(s): O33, O41, O47

Abstract:

This paper extends Jones' (1995) non-scale growth framework to include endogenous human capital. To do this, we propose a human capital accumulation technology that preserves the non-scale nature of the model. We show that focusing only on the asymptotic speed of convergence may not say much about the overall performance of a model to explain the convergence phenomenon. We find that both the predicted speeds of convergence and the adjustment path of the proposed model are consistent with the empirical evidence. The model suggests that cross-sector labor movements induced by the complementarity between human capital and technology can be a key factor in replicating and explaining growth miracles such as Japan and South Korea.


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Paper Reference Number: 1234

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25th August 2002 - 28th August 2002, Venice, Italy

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