Human Capital Accumulation, Lifetime Duration and the Process of Economic Development

Uwe Sunde and Matteo Cervellati

No 198, Royal Economic Society Annual Conference 2003 from Royal Economic Society

Abstract: This paper presents a microfounded theory of long-term development. We model the interplay between economic variables, namely the process of human capital formation and technological progress, and the biological constraint of finite lifetime expectancy. All these processes affect each other and are endogenously determined. The model is analytically solved and simulated for illustrative purposes. The resulting dynamics reproduce a long period of stagnant growth as well as an endogenous and rapid transition to a situation characterized by permanent growth. This transition can be interpreted as industrial revolution. Historical and empirical evidence is discussed and shown to be in line with the predictions of the model.

Keywords: long-term development; endogenous lifetime duration; endogenous life expectancy; human capital; technological progress; growth externalities (search for similar items in EconPapers)
JEL-codes: E19 J10 O10 O40 O41 (search for similar items in EconPapers)
Date: 2003-06-04
New Economics Papers: this item is included in nep-dev, nep-dge and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:ac2003:198

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