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Income and Wealth Distribution with Physical and Human Capital Accumulation: Extending the Uzawa-Lucas Model to a Heterogeneous Households Economy

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  • Wei-Bin Zhang

Abstract

This paper proposes a dynamic economic model with wealth accumulation and human capital accumulation with endogenous education. In addition to learning by education like in the Uzawa-Lucas model, we also consider Arrow’s learning by producing and Zhang’s learning by consuming (creative learning) in the human capital accumulation equation. We simulate the model to demonstrate the existence of equilibrium points and motion of the dynamic system. We also examine how ef fects of changes in the propensity to receive education, the population, the propensity to save, and the education sector’s total productivity will alter the paths of the economic dynamics.

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  • Wei-Bin Zhang, 2013. "Income and Wealth Distribution with Physical and Human Capital Accumulation: Extending the Uzawa-Lucas Model to a Heterogeneous Households Economy," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 50(2), pages 257-287, November.
  • Handle: RePEc:ioe:cuadec:v:50:y:2013:i:2:p:257-287
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    Cited by:

    1. Wei-Bin Zhang, 2013. "A Synthesis Of The Uzawa-Lucas Model With The Walrasian-General-Equilibrium And Neoclassical-Growth Theories," Economic Annals, Faculty of Economics, University of Belgrade, vol. 58(199), pages 7-38, October -.

    More about this item

    Keywords

    Learning by producing; learning by consuming; learning by education; wealth and income distribution; heterogeneous households;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • I2 - Health, Education, and Welfare - - Education

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