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Human capital externalities, trade, and economic growth

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  • David M. Gould
  • Roy J. Ruffin

Abstract

Human capital, because of its special role in innovative activity and technological progress, has formed the bedrock of the new theories of endogenous growth. Human capital, however, not only serves as an engine of growth, but also as a productive input along with labor and physical capital. In this study, we distinguish between these two roles of human capital and find evidence of the importance of both. We also find that the relationship between growth and the external effects of human capital vary according to trade regime. When literacy rates are relatively high, open economies grow about 0.65 to 1.75 percentage points more than closed economies. Replaced by \"Human capital, trade and economic growth\"

Suggested Citation

  • David M. Gould & Roy J. Ruffin, 1993. "Human capital externalities, trade, and economic growth," Working Papers 9301, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddwp:9301
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    File URL: http://www.dallasfed.org/assets/documents/research/papers/1993/wp9301.pdf
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    References listed on IDEAS

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    Cited by:

    1. Cletus C. Coughlin & David C. Wheelock, 1995. "Lessons from the United States and European Community for the integration of high and low income economies," Working Papers 1995-007, Federal Reserve Bank of St. Louis.

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    Economic development; Human capital;

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