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Two notes on economic growth and the Solow model

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  • Cohen, Daniel

Abstract

The two notes deal (from different angles) with the extension of the Solow model that has been offered by Mankiw, Romer and Weil (MRW). In this `extended Solow' model, physical capital enters the production function with the same weight as human capital and both weights are about 1/3. The first note challenges the assumption that the law of motion of human capital is collinear with the law of motion of physical capital, a key assumption which allows MRW to keep a one-dimensional trade of economic growth. The note shows instead that growth appears to be the sum of two terms: the traditional Solow term (proportional to the distance between the initial and `terminal' value of per-capita income); and the `productivity wedge', which is shown to be involved and to depend on the human-to-physical capital ratio. The second note verifies that physical capital enters into the production function with a weight of (only) 1/3 but challenges the view that school enrolment is a `causal' determinant of economic growth. In order to do that, the note estimates a growth equation in which an idiosyncratic term is controlled for each country.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cohen, Daniel, 1993. "Two notes on economic growth and the Solow model," CEPREMAP Working Papers (Couverture Orange) 9303, CEPREMAP.
  • Handle: RePEc:cpm:cepmap:9303
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    File URL: http://www.cepremap.fr/depot/couv_orange/co9303.pdf
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    Cited by:

    1. Andres, Javier & Domenech, Rafael & Molinas, Cesar, 1996. "Macroeconomic performance and convergence in OECD countries," European Economic Review, Elsevier, vol. 40(9), pages 1683-1704, December.
    2. Pierre-Yves Hénin & Pierre Ralle, 1993. "Les nouvelles théories de la croissance : quelques apports pour la politique économique," Revue Économique, Programme National Persée, vol. 44(1), pages 75-100.

    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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