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Schooling and Distortions in a Vintage Capital Model

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  • Xavier Mateos-Planas

    (University of Southampton)

Abstract

This paper integrates the analysis of choices on education and on technology adoption to study international economic disparities. Two candidate explanations are considered: differences in distortions that affect the cost of technology adoption and differences in the effectivenss of schools. The implications of these two factors for differences in output per capita, educational attainment, and the age of technologies across-countries are assessed in a vintage capital model with technology-specific learning-by-doing. Predictions are obtained for a parameterized economy that matches US aggregate observations and evidence on learning. Differences in investment distortions produce plausible correlations only if the major role of education is to improve the ability to learn technologies. On the other hand, differences in school effectiveness produce plausible results only if the role of education is to provide a productive ability that is independent of learning. (Copyright: Elsevier)

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File URL: http://dx.doi.org/10.1006/redy.2000.0104
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Article provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.

Volume (Year): 4 (2001)
Issue (Month): 1 (January)
Pages: 127-158

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Handle: RePEc:red:issued:v:4:y:2001:i:1:p:127-158

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Citations

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Cited by:
  1. Francesco Caselli, 2005. "Accounting for Cross-Country Income Differences," CEP Discussion Papers, Centre for Economic Performance, LSE dp0667, Centre for Economic Performance, LSE.
  2. Pessoa, Samuel de Abreu & Rob, Rafael, 2002. "Vintage Capital, Distortions and Development," Economics Working Papers (Ensaios Economicos da EPGE) 447, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
  3. Mateos-Planas, Xavier, 2000. "Technology adoption with finite horizons," Discussion Paper Series In Economics And Econometrics, Economics Division, School of Social Sciences, University of Southampton 0033, Economics Division, School of Social Sciences, University of Southampton.
  4. Samuel de Abreu Pessoa & Pedro Cavalcanti Ferreira, 2005. "The Effects of Longevity and Distortions on Education and Retirement," 2005 Meeting Papers, Society for Economic Dynamics 424, Society for Economic Dynamics.
  5. Francesco Caselli, 2005. "Accounting for cross-country income differences," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3567, London School of Economics and Political Science, LSE Library.
  6. Thomas Gries & Stefan Jungblut & Tim Krieger & Henning Meier, 2009. "Statutory Retirement Age and Lifelong Learning," Working Papers CIE 9, University of Paderborn, CIE Center for International Economics.
  7. Huseyin cagri SAGLAM, 2002. "Optimal pattern of technology adoption under embodiment with a finite planning horizon : A multi-stage optimal control approach," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales), Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES) 2002031, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  8. Ferreira, Pedro Cavalcanti Gomes & Pessoa, Samuel de Abreu, 2003. "The Costs of Education, Longevity and the Poverty of Nations," Economics Working Papers (Ensaios Economicos da EPGE) 472, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).

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