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Merit and rent in a growing economy

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  • Minelli, Enrico

Abstract

In the framework of Romer’s (1990) growth model, we endogenize human capital accumulation as the risky outcome of an effort choice. Policies favouring the accumulation of physical capital may reduce the incentives to effort, leading the economy on a balanced path with a high capital intensity and a low growth rate.

Suggested Citation

  • Minelli, Enrico, 2017. "Merit and rent in a growing economy," Economics Letters, Elsevier, vol. 151(C), pages 107-110.
    • Handle: RePEc:eee:ecolet:v:151:y:2017:i:c:p:107-110
    DOI: 10.1016/j.econlet.2016.12.027
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Growth; Endogenous technological change; Incentives;
    All these keywords.

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D52 - Microeconomics - - General Equilibrium and Disequilibrium - - - Incomplete Markets

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