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Ethnic Human Capital Externalities and Inequality in a General Equilibrium Growth Model

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  • Zhang, W.-B.

    (Ritsumeikan Asia Pacific University, Japan)

Abstract

This study deals with economic growth and income and wealth distribution in an economic growth model of heterogeneous households with economic structure and ethic-based human capital accumulation. The model emphasizes the role of ethnic human capital externalities on economic structural change and wealth and income distribution. It is based on Arrow's learning and the two core theories in economics - Walrasian general equilibrium theory and neoclassical growth theory. The economic system consists of one capital goods sector, one consumer goods sector, and any number of households (types). The motion is described by a set of differential equations. For illustration we simulate the motion of the economic system with three ethnic groups. We identify the existence of a unique stable equilibrium point. We also carry out comparative dynamic analysis. The comparative analyses provide some insights into the complexity of economic growth with ethnic human capital externalities.

Suggested Citation

  • Zhang, W.-B., 2014. "Ethnic Human Capital Externalities and Inequality in a General Equilibrium Growth Model," Journal of the New Economic Association, New Economic Association, vol. 21(1), pages 33-54.
    • Handle: RePEc:nea:journl:y:2014:i:21:p:33-54
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    More about this item

    Keywords

    Walrasian general equilibrium theory; ethnic human capital externalities; neoclassical growth theory; income and wealth distribution; integrated theory;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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