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On Endogenous Growth with Physical Capital, Human Capital and Product Variety

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  • Michael Funke
  • Holger Strulik

Abstract

We set up an endogenous growth model with physical capital, human capital and blueprints for intermediate goods. The model can generate steady-state growth or stagnation. Along the adjustment path for a developing economy we can distinguish different stages of development. The first stage is characterized by physical factor accumulation. At the second stage the economy follows a growth path which is mainly characterized by the accumulation of skills. Growth of the fully developed economy is identified by an increasing variety of goods originating from costly R&D efforts. Transition to a higher stage of development is explained endogenously. Thus, the model provides a high degree of generality by encompassing the standard neoclassical growth model and modern endogenous growth theory.

Suggested Citation

  • Michael Funke & Holger Strulik, 2000. "On Endogenous Growth with Physical Capital, Human Capital and Product Variety," Quantitative Macroeconomics Working Papers 20004, Hamburg University, Department of Economics.
  • Handle: RePEc:ham:qmwops:20004
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    References listed on IDEAS

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    More about this item

    Keywords

    Economic Growth;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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