Comparing Macroeconomic Returns on human and Public Capital: An Empirical Analysis of the Portuguese Case (1960-2001)

Miguel St. Aubyn () and Álvaro M. Pina ()

No 2004/07, Working Papers from Department of Economics at the School of Economics and Management (ISEG), Technical University of Lisbon.

Abstract: The impact of human and public capital on growth is a major issue in economic theory and in policy evaluation. Using a cointegrated VAR, we estimate a Cobb-Douglas production function for Portugal with public and human capital. Return rates are then computed with and without dynamic feedbacks. Without these, human capital yields a return comparable to private investment, and smaller than public investment. Considering dynamic feedbacks, private capital responds positively to a shock in public capital, but negatively to a shock in human capital. Consequently, the dynamic feedbacks return on human capital is much lower than on public capital.

Keywords: Human capital; public capital; economic growth; Portugal. (search for similar items in EconPapers)
JEL-codes: I20 H54 O47 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mac and nep-pbe
Date: 2004
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Journal Article: Comparing macroeconomic returns on human and public capital: An empirical analysis of the Portuguese case (1960-2001) (2005)
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