An Horizontal Innovation Growth Model with Endogenous Time Allocation and Non-Stable Demography

Manuel Guerra, João Pereira and Miguel Aubyn ()

No 2018/60, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: We propose a decentralized endogenous growth model in order to study the transitional dynamics associated with the process of population aging in a small open economy, that has endogenous time allocation and two growth engines: R&D and human capital accumulation. Growth of per capita output is affected negatively by the difference in the rates of growth of labor force and of the total population in the period where the weight of the labor force decreases to a new and lower level. The biggest impact on per capita output growth should be during the period where labor force grows at a lower rate than the popu- lation unless it is compensated by some other effect. Under some assumptions, a decrease in the corporate tax improves growth.

Keywords: Endogenous Growth; Demographic Changes; Time Allocation; Human Capital; R&D (search for similar items in EconPapers)
JEL-codes: J11 J22 J24 O33 O41 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-age, nep-dge, nep-gro and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp0602018

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