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Public education and economic prosperity: Semi-endogenous growth revisited

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  • Prettner, Klaus

Abstract

We introduce publicly funded education into R&D-based economic growth theory. Our framework allows us to i) explicitly describe a realistic process of human capital accumulation within these types of growth models, ii) reconcile semi-endogenous growth theory with the empirical evidence on the relationship between economic development and population growth, and iii) revise the policy invariance result of semi-endogenous growth frameworks. In particular, we show that the model supports a negative association between economic growth and population growth if the education sector is well developed and the population growth rate is low, that is, for modern industrialized countries. Furthermore, within our framework, changes in public educational investments have the potential to affect the long-run balanced growth rate. --

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Paper provided by Vienna University of Technology, Institute for Mathematical Methods in Economics, Research Group Economics (ECON) in its series ECON WPS - Vienna University of Technology Working Papers in Economic Theory and Policy with number 02/2012.

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Date of creation: 2012
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Handle: RePEc:zbw:tuweco:022012

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Web page: http://www.econ.tuwien.ac.at/
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Keywords: public education; human capital accumulation; technological change; semi-endogenous economic growth;

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