Heterogeneous Human Capital, Trade And Growth

Distribution differences in human capital matter for a country's growth and trade. While the existing literature considers only the diversity difference in talent distribution, the authors argue that the kurtosis difference is also an important factor. In a two-sector equilibrium growth model, where the production function is supermodular for the consumption-good sector and submodular for the R&D sector, they prove that the diversity effect and kurtosis effect are opposite to each other. A country endowed with more diverse but leptokurtic talent distribution may have lower growth rate and import submodular goods, opposite to the conventional result from considering only the diversity difference.

Provided by: Academia Sinica Topic: Big Data Date Added: Apr 2011 Format: PDF

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