IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v25y1997i3p234-255.html
   My bibliography  Save this article

Economic growth and the human capital intensity of government spending

Author

Listed:
  • Ron Cronovich

Abstract

The paper models an economy in which long-run growth is driven by human-capital-intensive, private sector research and development, and shows how government spending affects growth through its impact on relative wages. The more human-capital-intensive government spending is relative to private spending, the greater the derived demand for and relative wage of human capital and, hence, the more costly is research and development. The private sector thus devotes fewer resources to research and development and the rates of innovation and economic growth are lower. The paper argues that these effects are likely to be negative, and possibly substantial, in the U.S. The paper's results also offer a plausible explanation for the insignificance of government spending in cross-country growth regressions in recent empirical studies. Copyright International Atlantic Economic Society 1997

Suggested Citation

  • Ron Cronovich, 1997. "Economic growth and the human capital intensity of government spending," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 25(3), pages 234-255, September.
    • Handle: RePEc:kap:atlecj:v:25:y:1997:i:3:p:234-255
    DOI: 10.1007/BF02298407
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02298407
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02298407?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Economic Integration and Endogenous Growth," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 1, pages 3-32, World Scientific Publishing Co. Pte. Ltd..
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    3. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    4. Alicia H. Munnell, 1990. "Why has productivity growth declined? Productivity and public investment," New England Economic Review, Federal Reserve Bank of Boston, issue Jan, pages 3-22.
    5. Faye Duchin, 1983. "Economic Consequences of Military Spending," Journal of Economic Issues, Taylor & Francis Journals, vol. 17(2), pages 543-553, June.
    6. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roberto Leon-Gonzalez & Daniel Montolio, 2004. "Growth, convergence and public investment. A Bayesian model averaging approach," Applied Economics, Taylor & Francis Journals, vol. 36(17), pages 1925-1936.
    2. Poot, Jacques, 1999. "A meta-analytic study of the role of government in long-run economic growth," ERSA conference papers ersa99pa171, European Regional Science Association.
    3. Maria Herrerias, 2010. "The causal relationship between equipment investment and infrastructures on economic growth in China," Frontiers of Economics in China, Springer;Higher Education Press, vol. 5(4), pages 509-526, December.
    4. Hélène Baudchon, 1997. "Le paradoxe du ralentissement du progrès technique," Revue de l'OFCE, Programme National Persée, vol. 60(1), pages 187-217.
    5. Marie-Ange VEGANZONES-VAROUDAKIS, 2000. "Infrastructures, investissement et croissance : un bilan de dix années de recherches," Working Papers 200007, CERDI.
    6. Peter Nijkamp & Jacques Poot, Victoria, 2002. "Meta-Analysis of the Impact of Fiscal Policies on Long-Run Growth," Tinbergen Institute Discussion Papers 02-028/3, Tinbergen Institute, revised 23 Apr 2003.
    7. Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
    8. Lucas Bretschger, 2003. "Growth in a Globalised Economy: The Effects of Capital Taxes and Tax Competition," CER-ETH Economics working paper series 03/24, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    9. Matthew Higgins & Daniel Levy & Andrew T. Young, 2003. "Growth and Convergence across the US: Evidence from County-Level Data," Working Papers 2003-03, Bar-Ilan University, Department of Economics.
    10. Folster, Stefan & Henrekson, Magnus, 1999. "Growth and the public sector: a critique of the critics," European Journal of Political Economy, Elsevier, vol. 15(2), pages 337-358, June.
    11. Sefa Awaworyi Churchill & Mehmet Ugur & Siew Ling Yew, 2017. "Does Government Size Affect Per-Capita Income Growth? A Hierarchical Meta-Regression Analysis," The Economic Record, The Economic Society of Australia, vol. 93(300), pages 142-171, March.
    12. Nikos Benos & Nikolaos Mylonidis & Stefania Zotou, 2017. "Estimating production functions for the US states: the role of public and human capital," Empirical Economics, Springer, vol. 52(2), pages 691-721, March.
    13. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    14. Fedderke, J.W. & Bogetic, Z., 2009. "Infrastructure and Growth in South Africa: Direct and Indirect Productivity Impacts of 19 Infrastructure Measures," World Development, Elsevier, vol. 37(9), pages 1522-1539, September.
    15. Henrekson, Magnus & Torstensson, Johan & Torstensson, Rasha, 1997. "Growth effects of European integration," European Economic Review, Elsevier, vol. 41(8), pages 1537-1557, August.
    16. Hendricks, Lutz, 2000. "Equipment investment and growth in developing countries," Journal of Development Economics, Elsevier, vol. 61(2), pages 335-364, April.
    17. Gylfason, Thorvaldur, 1999. "Exports, Inflation and Growth," World Development, Elsevier, vol. 27(6), pages 1031-1057, June.
    18. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    19. Oscar Afonso & Sara Monteiro & Maria Thompson, 2014. "Innovation Economy, Productive Public Expenditure and Economic Growth," Metroeconomica, Wiley Blackwell, vol. 65(4), pages 671-689, November.
    20. Fiseha Gebregziabher & Miguel Niño-Zarazúa, 2014. "Social Spending and Aggregate Welfare in Developing and Transition Economies," WIDER Working Paper Series wp-2014-082, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:25:y:1997:i:3:p:234-255. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.