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Schooling and Public Capital in a Model of Endogenous Growth

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This paper studies the allocation of public spending between education services and infrastructure investment in an endogenous growth model where public capital in infrastructure affects the process of human capital accumulation. The balanced growth path is derived and the dynamics associated with a budget-neutral reallocation of spending from education to infrastructure are studied through numerical simulations. The growth-maximizing tax rate is shown to depend only on the production technology (as in standard flow models of public expenditure), whereas the optimal share of infrastructure investment depends also on the "productiveness" of infrastructure (relative to education services) in the schooling technology.

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  • P R Agénor, 2005. "Schooling and Public Capital in a Model of Endogenous Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 61, Economics, The Univeristy of Manchester.
  • Handle: RePEc:man:cgbcrp:61
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    Cited by:

    1. King Yoong Lim, 2015. "Industrial Transformation with Heterogeneous FDI and Human Capital," Centre for Growth and Business Cycle Research Discussion Paper Series 213, Economics, The Univeristy of Manchester.
    2. Pierre‐Richard Agénor & Devrim Yilmaz, 2013. "Aid Allocation, Growth And Welfare With Productive Public Goods," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 103-127, March.
    3. T. Buyse & F. Heylen, 2012. "Leaving the empirical (battle)ground: Output and welfare effects of fiscal consolidation in general equilibrium," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 12/826, Ghent University, Faculty of Economics and Business Administration.
    4. Bishnu, Monisankar & Ghate, Chetan & Gopalakrishnan, Pawan, 2011. "Distortionary Taxes and Public Investment in a Model of Endogenous Investment Specific Technological Change," MPRA Paper 34111, University Library of Munich, Germany.
    5. Calderon, Cesar & Serven, Luis, 2014. "Infrastructure, growth, and inequality : an overview," Policy Research Working Paper Series 7034, The World Bank.
    6. Agénor, Pierre-Richard & Neanidis, Kyriakos C., 2015. "Innovation, public capital, and growth," Journal of Macroeconomics, Elsevier, pages 252-275.
    7. Agénor, Pierre-Richard & Canuto, Otaviano & da Silva, Luiz Pereira, 2014. "On gender and growth: The role of intergenerational health externalities and women's occupational constraints," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 132-147.
    8. Chia-Hui Lu, 2015. "Optimal fiscal policies in an economy with externalities from public spending," Journal of Economics, Springer, pages 211-228.
    9. Agénor, Pierre-Richard & Canuto, Otaviano, 2015. "Gender equality and economic growth in Brazil: A long-run analysis," Journal of Macroeconomics, Elsevier, pages 155-172.
    10. Hosoya, Kei, 2016. "Recovery from natural disaster: A numerical investigation based on the convergence approach," Economic Modelling, Elsevier, pages 410-420.
    11. World Bank Group, "undated". "Africa's Pulse, No. 15, April 2017," World Bank Other Operational Studies 26485, The World Bank.
    12. Agénor, Pierre-Richard & Dinh, Hinh T., 2015. "Social capital, product imitation and growth with learning externalities," Journal of Development Economics, Elsevier, pages 41-54.
    13. Agénor, Pierre-Richard & Canuto, Otaviano, 2015. "Gender equality and economic growth in Brazil: A long-run analysis," Journal of Macroeconomics, Elsevier, pages 155-172.
    14. Lu, Chia-Hui, 2015. "Fiscal policies, frictional labor market, and endogenous growth," Journal of Macroeconomics, Elsevier, pages 315-327.
    15. Escobar-Posada, Rolando A. & Monteiro, Goncalo, 2015. "Long-run growth and welfare in a two sector endogenous growth model with productive and non-productive government expenditure," Journal of Macroeconomics, Elsevier, pages 218-234.

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