Heterogeneous Human Capital, Trade and Growth

Cheng-Te Lee () and Deng-Shing Huang
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Cheng-Te Lee: Department of International Trade, Chinese Culture University, Taiwan
Deng-Shing Huang: Institute of Economics, Academia Sinica, Taipei, Taiwan, https://www.econ.sinica.edu.tw/

No 11-A004, IEAS Working Paper : academic research from Institute of Economics, Academia Sinica, Taipei, Taiwan

Abstract: Distribution differences in human capital matter for a country’s growth and trade. While the existing literature considers only the diversity difference in talent distribution, we argue that the kurtosis difference is also an important factor. In a two-sector equilibrium growth model, where the production function is supermodular for the consumption-good sector and submodular for the R&D sector, we prove that the diversity effect and kurtosis effect are opposite to each other. A country endowed with more diverse but leptokurtic talent distribution may have lower growth rate and import submodular goods, opposite to the conventional result from considering only the diversity difference.

Keywords: diversity; kurtosis; growth; trade (search for similar items in EconPapers)
JEL-codes: F11 O41 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2011-04
New Economics Papers: this item is included in nep-fdg, nep-hrm and nep-int
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