Stabilization Policy, Growth and Learning by Doing

Carol Ann Rogers and Philippe Martin
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Carol Ann Rogers: GU - Georgetown University [Washington]

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Abstract: This paper shows that fiscal policy, when used for stabilization purposes, can have a positive effect on the economy's growth, on human capital accumulation, and on welfare. We introduce stochastic productivity shocks into a model in which productivity is augmented through learning-by-doing If future benefits of learning-by-doing are not fully internalized by workers, then recessions are periods in which opportunities for acquiring experience are foregone. We identify configurations of disturbances and other parameters for which a countercyclical policy maximizes growth and welfare.

Date: 1997-04
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Citations: View citations in EconPapers (52)

Published in Oxford Economic Papers, 1997, 49 (2), pp.152 - 166

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03416319

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