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This paper combines three prototype endogenous growth models, the models with human capital accumulation introduced by Uzawa  and Lucas , variety expansion by Romer , and quality improvements by Aghion and Howitt , in order to investigate how these three engines of growth interact. The authors show that a subsidy to human capital accumulation has a positive impact on R&D effort, as well as on human capital accumulation. On the other hand, a subsidy to R&D sectors does not affect human capital accumulation in the model.
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