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Education and Growth: A Simple Model with Complicated Dynamics

Theodore Palivos and Dimitrios Varvarigos ()
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Dimitrios Varvarigos: Department of Economics, University of Leicester, http://www.le.ac.uk/ec/

Discussion Paper Series from Department of Economics, University of Macedonia

Abstract: We construct a simple model of education and growth in which young adults (children) spend a fraction of their time and old adults (parents) spend a fraction of their income on education. Both a strategic complementarity and an intergener- ational externality in the creation of human capital are present. The interactions between each pair of consecutive generations lead to rich dynamics. We show that multiple growth equilibria arise, some of them periodic and some aperiodic. We also ?nd a negative correlation between volatility and growth, without a one-way causal relationship between the two being, necessarily, present. Rather this negative correlation is driven by the structural characteristics of the economy.

Keywords: Education; Human Capital; Economic Growth. (search for similar items in EconPapers)
JEL-codes: E32 O41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge, nep-edu, nep-fdg, nep-hrm and nep-lab
Date: 2009-04, Revised 2009-04
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Journal Article: Education and growth: A simple model with complicated dynamics (2010) Downloads
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