Fiscal policy in an endogenous growth model with human capital and heterogenous agents
This paper studies effects of fiscal policy in an endogenous growth model with human capital and heterogenous agents. Two types of households are considered. One household acquires human capital or skills through education while the other household remains unskilled. Sustained growth is the result of human capital accumulation which is a function of the existing human capital employed in the educational sector and of public spending for education. Aggregate production is given by a function with physical capital and labor as input factors, where total labor input is modelled by a CES function with skilled and unskilled labor as arguments. The paper studies effects of fiscal policy as concerns long-run growth and the distribution of income as well as concerns welfare of the two households.
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- Blankenau, William F. & Simpson, Nicole B., 2004. "Public education expenditures and growth," Journal of Development Economics, Elsevier, vol. 73(2), pages 583-605, April.
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- Kenneth Beauchemin, 1999. "Growth or Stagnation? The Role of Public Education," Discussion Papers 99-06, University at Albany, SUNY, Department of Economics.
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- Giancarlo Corsetti & Nouriel Roubini, 1996. "Optimal Government Spending and Taxation in Endgenous Growth Models," NBER Working Papers 5851, National Bureau of Economic Research, Inc.
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- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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