Human Capital Formation, Learning by Doing and the Government in the Process of Economic Growth
26 Pages Posted: 12 Nov 2009 Last revised: 30 Dec 2012
Date Written: November 11, 2009
We present an endogenous growth model with human capital and learning by doing. Human capital is not an input factor in the production process of final output but it affects the ability to build up knowledge capital as a by-product of cumulated investment (learning by doing). Human capital is formed in the schooling sector that is financed by the government. The government may run into debt but always obeys the inter-temporal budget constraint. The paper analyzes the structure of the model and studies effects of different budgetary policies as regards the balanced growth rate and with respect to transition dynamics.
Keywords: Human Capital Formation, Learning by Doing, Public Education, Endogenous Growth
JEL Classification: H52, H60, O38, O41
Suggested Citation: Suggested Citation