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Education, Endogenous Human Capital, and Monetary Economic Growth with MIU Approach

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  • Wei-Bin Zhang

    (Ritsumeikan Asia Pacific University, Oita-ken, Japan)

Abstract

This study builds a monetary growth model with inflation policy and education. The model is a synthesis of the Uzawa-Lucas two-sector growth model and traditional monetary model with the money-in-utility (MIU) approach. We show how money, physical capital and human capital interact over time under exogenous inflation policy in a free market economy. The dynamics of the economy is described by three differential equations. We show that the monetary economic system has a saddle equilibrium point. We simulate motion of the economic system and carry out comparative statics analysis with regards to the monetary policy, propensities to save wealth and to receive education.

Suggested Citation

  • Wei-Bin Zhang, 2013. "Education, Endogenous Human Capital, and Monetary Economic Growth with MIU Approach," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 7(2), pages 100-118, July.
  • Handle: RePEc:fau:aucocz:au2013_100
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    Cited by:

    1. Wei-Bin Zhang, 2013. "Flexible Exchange Rate and Growth of a Small Open Monetary Economy with Imported Good and Externalities," Economic Research Guardian, Weissberg Publishing, vol. 3(1), pages 33-53, June.

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    More about this item

    Keywords

    Economic growth; MIU approach; inflation policy; physical capital; education and human capital; learning through consuming;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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