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Human Capital, Product Quality, and Growth

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  • Nancy L. Stokey

Abstract

A growth model is developed in which finite-lived individuals invest in human capital, and investments have a positive external effect on the human capital of later cohorts. Heterogeneous labor is the only factor of production, and higher-quality labor produces higher-quality goods. Stationary growth paths, along which human capital and the quality of consumption goods grow at a common, constant rate, are studied. It is also shown that if a small economy is very advanced or very backward relative to the rest of the world, then its rate of investment in human capital is lower under free trade than under autarky.

Suggested Citation

  • Nancy L. Stokey, 1990. "Human Capital, Product Quality, and Growth," Discussion Papers 883, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:883
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    1. Findlay, Ronald & Kierzkowski, Henryk, 1983. "International Trade and Human Capital: A Simple General Equilibrium Model," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 957-978, December.
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    7. Stokey, Nancy L, 1988. "Learning by Doing and the Introduction of New Goods," Journal of Political Economy, University of Chicago Press, vol. 96(4), pages 701-717, August.
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    Cited by:

    1. Angelina Shpilevaya, 2022. "Overview of General Equilibrium Models with Imperfect Financial Markets and the Accumulation of Human Capital," Russian Journal of Money and Finance, Bank of Russia, vol. 81(3), pages 54-71, September.
    2. Sala-i-Martin, Xavier, 1990. "Lecture Notes on Economic Growth: Five Prototype Models of Endogenous Growth. Volume II," Center Discussion Papers 321324, Yale University, Economic Growth Center.
    3. Pyastolov, S.M., 2007. "Norms as indicators of human capital investments effectiveness," MPRA Paper 44451, University Library of Munich, Germany.
    4. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    5. Nour, Samia, 2011. "Education, training and skill development policies in Sudan: Macro-micro overview," MERIT Working Papers 2011-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Roubini, Nouriel & Sala-i-Martin, Xavier, 1992. "Financial repression and economic growth," Journal of Development Economics, Elsevier, vol. 39(1), pages 5-30, July.
    7. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.

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