Stabilization Policy, Learning-by-Doing, and Economic Growth
AbstractThis 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. The authors 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. The authors identify configurations of disturbances and other parameters for which a countercyclical policy maximizes growth and welfare. Copyright 1997 by Royal Economic Society.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 49 (1997)
Issue (Month): 2 (April)
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Other versions of this item:
- Martin, Philippe & Rogers, Carol Ann, 1995. "Stabilization Policy, Learning by Doing, and Economic Growth," CEPR Discussion Papers 1130, C.E.P.R. Discussion Papers.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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