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The First Harrod Problem and Human Capital Formation

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  • Gustavo Pereira Serra

    (Department of Economics, New School for Social Research)

Abstract

This paper addresses the contribution of human capital accumulation to solving the First Harrod Problem, which relates to the difference between demand-led and natural growth rates in the long run. To some extent, this paper also relates to the literature on labor-saving technical change represented as a costly process. Moreover, I show how a model that considers human capital accumulation can address overeducation and technical change. I argue that human capital formation and technological progress are complementary in economic growth: the former ensures the stability of the employment rate on the balanced growth path, whereas the latter determines its level.

Suggested Citation

  • Gustavo Pereira Serra, 2021. "The First Harrod Problem and Human Capital Formation," Working Papers 2113, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:2113
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    References listed on IDEAS

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    More about this item

    Keywords

    Human Capital; Post-Keynesian Economics; First Harrod Problem; Harrodian Instability; Aggregate Productivity;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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