Extensions to Neoclassical Growth Theory

Sibabrata Das (), Alex Mourmouras () and Peter C. Rangazas ()
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Sibabrata Das: International Monetary Fund
Alex Mourmouras: International Monetary Fund
Peter C. Rangazas: Indiana University-Purdue University Indianapolis (IUPUI)

Chapter Chapter 3 in Economic Growth and Development, 2015, pp 51-89 from Springer

Abstract: Abstract In this chapter, we extend the basic neoclassical growth model in several ways. In the previous chapter, we learned that human capital is an important source of economic growth. Here, we introduce a simple theory of human capital formation based on parents desire to invest in the “quality” or economic productivity of their children. Parents will also choose the “quantity” of their children, giving us a theory of fertility that makes population growth, another important determinant of economic growth identified in Chap. 2, endogenous. Recall that high population growth makes it difficult to accumulated capital per worker and thus slows the growth in per capita income.

Keywords: Human Capital; Fiscal Policy; Poor Country; Physical Capital; Rich Country (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-319-14265-4_3

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DOI: 10.1007/978-3-319-14265-4_3

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