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Human Capital, R&D and Competition in Macroeconomic Analysis

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Abstract

Long-run per capita economic growth is driven by productivity growth. Major determinants of productivity are investments in education and research, and the intensity of competition on product markets. While these ideas have been incorporated into modern growth theories and tested in empirical analyses, they have not yet found their way to applied macroeconomic models used to forecast economic developments. In this paper, we discuss various options to include human capital, R&D and product market competition in a macroeconomic framework. We also study how policy can affect the decisions to build human capital or to perform research, and how competition policy impacts on macroeconomic outcomes. We finally sketch how these mechanisms can be implemented into the large models used at the Netherlands Bureau for Economic Policy Analysis (CPB).

Suggested Citation

  • Erik Canton & Bert Minne & Ate Nieuwenhuis & Bert Smid & Marc van der Steeg, 2005. "Human Capital, R&D and Competition in Macroeconomic Analysis," Economics Working Papers 038, European Network of Economic Policy Research Institutes.
  • Handle: RePEc:epr:enepwp:038
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    Keywords

    Human capital; R&D; competition; applied macroeconomic models;

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