Sustained Output Growth Under Uncertainty: A Simple Model With Human Capital
AbstractIn a model where agents use their labour/education choice to adjust their consumption profile over time, I show that the impact of uncertainty on growth depends, critically, on agents’ attitudes towards risk, reflected by the coefficient of relative risk aversion. In this respect, the well known result from the literature on ‘saving under uncertainty’ can be extended into a broader context, whereby the intertemporal profile of consumption is determined via human capital accumulation rather than saving and physical capital investment.
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Bibliographic InfoPaper provided by Department of Economics, Loughborough University in its series Discussion Paper Series with number 2007_20.
Date of creation: Aug 2007
Date of revision: Aug 2007
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Find related papers by JEL classification:
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-14 (All new papers)
- NEP-DGE-2007-08-14 (Dynamic General Equilibrium)
- NEP-EDU-2007-08-14 (Education)
- NEP-HRM-2007-08-14 (Human Capital & Human Resource Management)
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7398, University Library of Munich, Germany, revised Jan 2008.
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