The First Harrod Problem and Human Capital Formation

Gustavo Pereira Serra

No 2113, Working Papers from New School for Social Research, Department of Economics

Abstract: This paper addresses the contribution of human capital accumulation to solving the First Harrod Problem, which relates to the difference between demand-led and natural growth rates in the long run. To some extent, this paper also relates to the literature on labor-saving technical change represented as a costly process. Moreover, I show how a model that considers human capital accumulation can address overeducation and technical change. I argue that human capital formation and technological progress are complementary in economic growth: the former ensures the stability of the employment rate on the balanced growth path, whereas the latter determines its level.

Keywords: Human Capital; Post-Keynesian Economics; First Harrod Problem; Harrodian Instability; Aggregate Productivity (search for similar items in EconPapers)
JEL-codes: E11 E12 E24 O40 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2021-08
New Economics Papers: this item is included in nep-gro, nep-his, nep-hme, nep-isf, nep-mac and nep-pke
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http://www.economicpolicyresearch.org/econ/2021/NSSR_WP_132021.pdf First version, 2021 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:new:wpaper:2113

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