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Technology, Skill and Long Run Growth

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  • Nancy L Stokey

    (Department of Economics)

Abstract

This paper develops a model in which heterogeneous firms invest in technology to increase their profits, and heterogeneous workers invest in human capital to increase their earnings. Production functions are log supermodular in technology and human capital, so the competitive equilibrium features positively assortative matching between firms and workers. Continued investment in technology is profitable only because human capital is growing, and continued investment in human capital is worthwhile only because technology is growing. Both investment technologies have stochastic components, and the balanced growth path has stationary, nondegenerate distributions of technology and human capital, with both growing at a common, constant rate.

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  • Nancy L Stokey, 2017. "Technology, Skill and Long Run Growth," 2017 Meeting Papers 199, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:199
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    References listed on IDEAS

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    Cited by:

    1. He, Qichun & Wang, Xilin, 2020. "Money, Human Capital and Endogenous Market Structure in a Schumpeterian Economy," MPRA Paper 104609, University Library of Munich, Germany.

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