Education, Innovation, and Long-Run Growth

Katsuhiko Hori and Katsunori Yamada
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Katsuhiko Hori: Institute of Economic Research (KIER), Kyoto University
Katsunori Yamada: Institute of Social and Economic Research (ISER), Osaka University
Authors registered in the RePEc Author Service: 堀 勝彦 ()

No 2008-041, Keio/Kyoto Joint Global COE Discussion Paper Series from Keio/Kyoto Joint Global COE Program

Abstract: This paper combines three prototype endogenous growth models, the models with human capital accumulation introduced by Uzawa [1965] and Lucas [1988], variety expansion by Romer [1990], and quality improvements by Aghion and Howitt [1992], in order to investigate how these three engines of growth interact. We show that a subsidy to human capital accumulation has a positive impact on R&D effort, as well as on human capital accumulation. On the other hand, a subsidy to R&D sectors does not affect human capital accumulation in our model. Moreover, we show that equilibrium dynamics is locally saddle-path stable around the steady growth path. It suggests that Schumpeterian growth models `a la Howitt [1999] should share the locally saddle-path stable property. Finally, since in our model the percapita output growth rate is endogenously determined by both technology improvements and human capital accumulation, it bridges the gap between the literature on Schumpeterian growth models and that on growth empirics.

Pages: 16 pages
Date: 2008
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Related works:
Journal Article: Education, Innovation and Long-Run Growth (2013)
Working Paper: Education, Innovation, and Long-Run Growth (2011)
Working Paper: Education, Innovation, and Long-Run Growth (2011)
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