Global Knowledge and Wealth with National Human Capital and Free Trade

Wei-Bin Zhang

Notas Económicas, 2021, issue 52, 75-98

Abstract: This paper deals with issues of global economic growth with endogenous private wealth, national human capital, and global knowledge. We build a multi-country growth model with interactions between wealth accumulation, human capital change, and knowledge growth by integrating the basic economic mechanisms in a few theories. The model is framed within neoclassical growth theory. Human capital accumulation is based on the Uzawa-Lucas twosector model. Trade pattern is determined as in the Oniki-Uzawa trade model. Knowledge growth is influenced by new growth theory. Household behavior is modelled using Zhang’s concept of disposable income and utility function. The dynamics of the J-country world economy is described by 2J+1 differential equations for wealth, human capital, and knowledge. We simulate the movement of the global economy based on three economies. We also conduct comparative dynamic analysis to show how changes in national characteristics, such as propensity to save, propensity to receive education, efficiency of applying human capital and creativity, shift dynamic paths of the global and domestic economic development. Keywords: Growth; international trade; human capital; wealth; creativity; research policy.

JEL-codes: F11 F21 J24 O41 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2020:i:52:p:75:98

DOI: 10.14195/2183-203X_52_3

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