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On the role of productive government spendings for convergence of a growing economy with heterogenous specialists

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  • Ott, Ingrid
  • Soretz, Susanne

Abstract

This paper employs a dynamic framework to compare the effects of alternative government activities on convergence of industrialized economies to the technology frontier. The government's Instruments include facilitating private investment and education policy. The latter enhances skills of heterogenous specialists and imply the decision on their respective shares. The analysis distinguishes between an isolated policy of a single economy and coordinated policies of various countries. Which policy maximizes the speed of convergence is crucially affected by the economy's state of development. A policy switch between the mentioned instruments while catching-up may be preferable.

Suggested Citation

  • Ott, Ingrid & Soretz, Susanne, 2010. "On the role of productive government spendings for convergence of a growing economy with heterogenous specialists," Working Paper Series in Economics 5, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    • Handle: RePEc:zbw:kitwps:5
    DOI: 10.5445/IR/1000019774
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    References listed on IDEAS

    as
    1. Güner, Biliana & Rachev, Svetlozar T. & Edelman, Daniel & Fabozzi, Frank J., 2010. "Bayesian inference for hedge funds with stable distribution of returns," Working Paper Series in Economics 1, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    2. Fisher, Walter H & Turnovsky, Stephen J, 1998. "Public Investment, Congestion, and Private Capital Accumulation," Economic Journal, Royal Economic Society, vol. 108(447), pages 399-413, March.
    3. Kim, Young Shin & Rachev, Svetlozar T. & Bianchi, Michele Leonardo & Mitov, Ivan & Fabozzi, Frank J., 2011. "Time series analysis for financial market meltdowns," Journal of Banking & Finance, Elsevier, vol. 35(8), pages 1879-1891, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Education policy; amount and structure of public expenditure; highlyskilled specialists;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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