Population, innovation, competition and growth with and without human capital investment

Alberto Bucci ()

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: This paper analyzes how population and product market competition may interact with each other in affecting the pace of productivity growth. We find that the impact of a change in population (size/growth) and in the degree of market concentration on economic growth varies depending on the structure of the underlying model economy and, more precisely, depending on the presence of purposeful human (versus physical) capital investment, the type of input used in the uncompetitive sector, the form of households’ intertemporal utility and whether product market competition (measured by the elasticity of substitution between differentiated intermediates) is disentangled or not from the input-shares in total income. We also find that only a fully endogenous growth model with purposeful human capital investment at the individual level and a continuum of degrees of inter-generational altruism is simultaneously able to predict an ambiguous link between population and economic growth rates and to display no strong scale effects in economic growth, while keeping the property that positive economic growth is feasible even without any population change. The paper also examines the conditions under which population (size/growth) and product market competition/monopoly power can be complementary factors in economic growth.

Keywords: Population (size and growth); Endogenous and Semi-Endogenous Economic; Growth; Human and Physical Capital Investment; Innovation; Scale Effects; Competition (search for similar items in EconPapers)
JEL-codes: C61 J10 J24 L13 O33 O41 (search for similar items in EconPapers)
Date: 2009-11-26
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Population, Innovation, Competition and Growth with and without Human Capital Investment (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2009-46

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