Fiscal Policy in an Endogenous Growth Model With Human Capital and Heterogenous Agents

30 Pages Posted: 15 Nov 2006

See all articles by Alfred Greiner

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics

Date Written: November 13, 2006

Abstract

This paper studies effects of fiscal policy in an endogenous growth model with human capital and heterogenous agents. Two types of households are considered. One household acquires human capital or skills through education while the other household remains unskilled. Sustained growth is the result of human capital accumulation which is a function of the existing human capital employed in the educational sector and of public spending for education. Aggregate production is given by a function with physical capital and labor as input factors, where total labor input is modelled by a CES function with skilled and unskilled labor as arguments. The paper studies effects of fiscal policy as concerns long-run growth and the distribution of income as well as concerns welfare of the two households.

Keywords: Human Capital Formation, Public Education, Heterogenous Agents, Endogenous Growth

JEL Classification: E62, H52

Suggested Citation

Greiner, Alfred, Fiscal Policy in an Endogenous Growth Model With Human Capital and Heterogenous Agents (November 13, 2006). Available at SSRN: https://ssrn.com/abstract=944490 or http://dx.doi.org/10.2139/ssrn.944490

Alfred Greiner (Contact Author)

Bielefeld University - Department of Business Administration and Economics ( email )

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HOME PAGE: http://phoenix.wiwi.uni-bielefeld.de/lehrbereiche/vwl/wipol

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