Reassessing the Empirical Validity of the Human-Capital Augmented Neoclassical Growth Model

Posted: 25 Feb 1999

See all articles by Elias Dinopoulos

Elias Dinopoulos

Department of Economics; University of Florida - Warrington College of Business Administration - Department of Economics

Peter Thompson

Georgia Institute of Technology - Scheller College of Business

Abstract

We reassess Mankiw, Romer and Weil's [mrw] version of the Solow model using, as did mrw, cross-sectional data to estimate the steady-state equation governing income per capita levels. The model fails in two critical areas. First, plausible factor shares obtained by mrw are not robust to the substitution of two measures of human capital that are more precise than the secondary school enrollment rates used by mrw. Second, the null hypothesis of an exogenous and identical level of technology in all countries is rejected. We also explain why the Solow model performed well despite the above shortcomings.

JEL Classification: O2, O3

Suggested Citation

Dinopoulos, Elias and Thompson, Peter, Reassessing the Empirical Validity of the Human-Capital Augmented Neoclassical Growth Model. Available at SSRN: https://ssrn.com/abstract=149152

Elias Dinopoulos (Contact Author)

Department of Economics ( email )

Gainesville, FL 32610-0496
United States

University of Florida - Warrington College of Business Administration - Department of Economics ( email )

224 Matherly Hall
Gainesville, FL 32611-7140
United States
352-392-8150 (Phone)
352-392-7860 (Fax)

Peter Thompson

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St., NW
Atlanta, GA 30308-1149
United States

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