On the effects of human capital and R&D policies in an endogenous growth model

We introduce an external effect of existing technologies in human capital accumulation in an endogenous growth model and describe its steady-state and transition. We numerically solve the model to compare the quantitative effects of R&D policy with the quantitative effects of human capital policy in wealth and welfare. Although R&D subsidies have now an overall positive effect on growth, wealth and welfare, the calibration exercise shows that for plausible values for the parameters, human capital policy is simultaneously the most income and welfare-improving and the less expensive to the government.     

A note on work–leisure choice, human capital accumulation, and endogenous growth

The growth model of Lucas [Lucas Jr., R.E., 1988. On the mechanics of economic development. Journal of Monetary Economics 22 (1), 3–42] is enriched with people having the opportunity to optimally allocate a fraction of their time to non-productive activities (‘leisure’). It is found that the chosen amount of leisure reduces the steady-state rate of growth of per capita output. This implies that the association between income and welfare may not be as strong as it is usually assumed to be. The optimal allocation of time among activities depends on some of the parameters and the marginal product of physical capital per capita.     

A solution to the Lucas–Uzawa model with increasing returns to scale: Note

Chilarescu [2008, An analytical solutions for a model of endogenous growth, Economic Modelling.] claims that he determines a solution path to the Lucas–Uzawa model with increasing returns to scale. However, the path is not a closed-form since it depends on the initial consumption and the initial time for goods production, that are unknown. Moreover, the production function is nonconcave and then the first order conditions and the transversality conditions are not sufficient for the optimality. This note converts the model to a problem in which the Hamiltonian is available and derives a fully-closed form solution.     

Growth and social security: the role of human capital

This paper studies the growth and efficiency effects of pay-as-you-go financed social security when human capital is the engine of growth. Employing a variant of the Lucas model [Lucas, R.E., 1988. On the mechanics of economic development. Journal of Monetary Economics 22, 3–42.] with overlapping generations, it is shown that a properly designed, unfunded social security system leads to higher output growth than a fully funded one. Furthermore, the economy with an unfunded social security is efficient, while the other one is not. These results stand in sharp contrast to those obtained in models where the reason for economic growth is physical capital accumulation.     

The Feldstein–Horioka puzzle across EU members: Evidence from the ARDL bounds approach and panel data

This paper addresses the saving-investment (SI) correlation for the EU15 member countries, using the ARDL approach and panel regressions. If we accept the Feldstein–Horioka [Feldstein, M. and C. Horioka, 1980, Domestic saving and international capital flows, Economic Journal 90, 314–329.] interpretation of the SI correlation, the evidence from the ARDL approach does not point to any particular direction in terms of country size, or level of development, or economic and capital market structure. Panel regressions yield an SI coefficient in the range of 0.148–0.157. This finding is attributed to higher capital mobility, lower transaction costs in the international capital markets, and the declining status of long-run current account targeting as a primary government objective.     

The National Wealth–Income Ratio in Greece, 1974–2013

Can the rise of wealth–income ratios observed in rich economies be found in the case of Greece as well? This paper uses a generalization of a two‐good wealth accumulation equation to estimate the evolution of the national wealth–income ratio, and finds that, similarly to the European evidence, the ratio rises from about 280 percent in the 1970s to about 500 percent on the eve of the current financial crisis. On average, during 1974–96, the saving‐induced wealth growth cancels out the capital losses, whereas in the subsequent decade, 1997–2007, the balance changes considerably when the saving effect vanishes and the prolonged capital gains result in a rising wealth–income ratio. During the recession, income falls faster than wealth. The results remain robust to several alterations of the benchmark framework.     

Financial frictions and the ratio in UK manufacturing

This note concerns an asymptotic distribution result from the literature on nonlinear estimation with integrated variables. It points out a way of strengthening local asymptotic distribution results towards results that hold for the global minimizer of the criterion function.     

The impacts of bank-specific and macroeconomic variables on the capital adequacy ratio: evidence from Islamic banks

The study investigates the relationship between the capital adequacy ratio (CAR) and different bank-specific and macroeconomic variables for 28 Islamic banks. We document that there is a statistically significant positive relationship between the CAR and the bank-specific and macroeconomic variables. In particular, bank-specific variables such as ROA, ROE, leverage, credit risk and size show a strong association with the CAR, while on the macroeconomic side, inflation, market capitalization and exchange rate have an impact on the average Islamic bank in our sample study. Furthermore, we run another model (equity to assets ratio) as dependent, with similar control variables, and the results reveal that, except for inflation, all the variables that have a significant effect on the CAR also influence the equity to assets ratio.     

The role of human and social capital in growth: extending our understanding

Human capital, institutions and social capital are now all recognisedas significant factors of growth. They have largely been studiedseparately, and although they present sufficient common characteristicsto be conceptualised as one main category distinct from physicalcapital, it may still be more important to focus on the linksbetween their specific sub-categories. Direct links with incomemay be spurious, as there appears to be a ‘web of associations’between the sub-categories, which would benefit from furtherempirical investigation. This paper reviews the literature onhuman capital, institutions and social capital, extracting threesub-categories of human capital (human skills capital, stock-of-knowledgeand entrepreneurship) and two of social capital (low- and high-rationalisation).Specific areas are then suggested for further empirical study.     

资金时间价值理论在企业财务管理中的应用研究

资金具有价值累积的时间效应,是现代企业财务管理活动中应重点研究的对象。在此背景下介绍了资金时间价值理论的内涵,并从筹资和资金周转的角度研究了货币时间价值理论的应用情况,对于解决财务管理问题和企业发展问题具有重要的指导作用。     

Another direct proof of the Gibbard–Satterthwaite Theorem

This paper provides a new and direct proof of the Gibbard–Satterthwaite Theorem based on induction on the number of individuals.     

Capital–skill complementarity and the immigration surplus

We build a neoclassical growth model with overlapping dynasties and capital–skill complementarities to evaluate changes in immigration policy. Calibrating the model using US data, we quantify the differential effects of skilled and unskilled immigration on factor returns and on the welfare of different sectors of the population. An influx of high-skilled immigrants lowers the wages of skilled workers, raises the wages of unskilled workers, and because of the relative complementarity between capital and skilled labor, substantially raises the rate of return to native-owned capital. By contrast, an influx of unskilled immigrants produces an opposite effect on wages, and has only a negligible effect on the return to capital. Because of capital–skill complementarity, an increase in the number of skilled immigrants generates an immigration surplus—the overall welfare benefit accruing to the native population—that is approximately ten times larger than the immigration surplus generated by an identical increase in the number of unskilled immigrants. This differential welfare effect is far higher than can be accounted for by the disparity between the productivities of each type of worker.     

On weighted Kalai–Samet solutions for non-transferable utility coalitional form games

We investigate the implications of the axiom of coalitional concavity for non-transferable utility coalitional form games. This axiom says that if the feasible set of some coalition is uncertain whereas the feasible sets of other coalitions are known, then all players in the coalition with the uncertain feasible set should (weakly) benefit from reaching a compromise before the uncertainty is resolved. By imposing this axiom, in addition to other minor axioms, we characterize the weighted Kalai–Samet [Econometrica 53 (1985) 307] solutions: these solutions coincide with the weighted egalitarian solutions on the domain of bargaining problems, and with the weighted Shapley values on the domain of transferable utility coalitional form games.     

经济转轨中国有资本比重的最优路径选择——一个动态模型

This paper presents a dynamic model based on the utility maximum decisions of both the government and private sectors to study the optimal withdrawing path of state-owned capital in economic transition. Numerical simulation shows that: (1) an optimal transition path still exists when treating government and private sectors separately, (2) when the transition cost is higher than its critical value, the economy will never start a transition by itself. In addition, this analysis offers theoretical supports for some reform policies adopted by governments during transition. __________ Translated from Jingjixue Jikan 经济学(季刊) (China Economic(Quarterly)), 2007, 6(2): 561–580     

Endogenicity of economic growth models

In his celebrated 1956 article, “A Contribution to the Theory of Economic Growth,” Solow calibrated the stylized facts of economic growth observed in the Western developed countries and summed up by Kaldor. Solow reconciled steady-state rate of growth of per capita output with constant capital/output and capital/labor ratios by introducing labor augmenting technological progress and measuring physical labor time in efficiency units. A series of articles have appeared since the mid-1980s, which have substantially extended the neoclassical model of growth theory presented by Solow. Most of these are entitled endogenous in juxtaposition to Solow's model, which is considered and often labeled exogenous. The purpose of this article is to show that this dichotomy is not worthwhile by arguing that the way technological progress enters in Solow's model plays a crucial role. Moreover, the designation of a model need not depend on the way it employs just one element among others.     

Dynamics of social trust and human capital in the learning process: The case of the Japan garment cluster in the period 1968–2005

This paper examined the ways and the extent to which human capital and social trust are associated with the learning process of a manager in making operations decisions through experience. To this end, using a data set originally and purposively constructed by the author, I investigated the development and transformation of the garment industry cluster region of Kojima, Japan. The major findings through statistical estimations are as follows. (1) In the cluster development stage, the social trust of an enterprise and its manager's experiences in firm operations could be regarded as forming a complementary association. (2) In the stage following cluster development, however, a manager's human capital as accumulated through schooling and personal experience, instead of social trust, become complementary.     

Ex ante capital position,changes in the different components of regulatory capital and bank risk

We investigate the impact of changes in capital of European banks on their risk-taking behaviour from 1992 to 2006, a time period covering the Basel I capital requirements. We specifically focus on the initial level and type of regulatory capital banks hold. First, we assume that risk changes depend on banks’ ex ante regulatory capital position. Second, we consider the impact of an increase in each component of regulatory capital on banks’ risk changes. We find that, for highly capitalized, adequately capitalized and strongly undercapitalized banks, an increase in equity or in subordinated debt positively affects risk. Moderately undercapitalized banks tend to invest in less risky assets when their equity ratio increases but not when they improve their capital position by extending hybrid capital or subordinated debt. On the whole, our conclusions support the need to implement more explicit thresholds to classify European banks according to their capital ratios but also to clearly distinguish pure equity from hybrid and subordinated instruments.     

Human capital and the re‐employment of retrenchment labor in urban China

The inefficiency of state‐owned enterprises, followed by the economic reform in urban China, resulted in large‐scale retrenchment during the late1990s. The laid‐off workers were middle‐aged, not well educated and had accumulated a lot of firm‐specific human capital that was unlikely to be of value in the product market. In this study, we investigate how differently human capital affects laid‐off workers’ occupation choices: self‐employment, re‐employment and remaining unemployed. Using 2002 Chinese Household Income Project and 2009 Urban Household Survey datasets, we find that although general human capital measured by education is positively related to the probability of finding a job, it is negatively associated with the probability of self‐employment. Displaced workers with more sector‐specific work experience are more likely to be self‐employed than to be employed by others. Government‐sponsored training significantly increases the likelihood of finding a job. Health is positively associated with re‐employment.     

人力资本结构对经济增长贡献率的实证分析

建立人力资本结构对经济增长贡献率的计量模型,采用相关数据对该模型进行实证分析。结果表明：中等教育对我国经济增长的贡献率较高,高等教育相对较小。因此,建立模型分析不同受教育年限的人力资本对经济增长的贡献率就非常具有现实意义。     

On the flow of funds accounts and inter-sectoral mobility of capital in India

This study uses the flow of funds accounts framework and undertakes an in-depth analysis of the inter-sectoral mobility of capital in India. Unlike previous studies, the FH model is estimated at the sectoral level using annual data for the period 1950–51 to 2012–13. The model estimated in one-regime setting with no structural break provides a weak and mixed support and that estimated in a sample-split setting with a single structural break provides no support for the presence of a long-run relationship between saving and investment for all the sectors. In contrast, the model estimated with multiple structural breaks provides dominant support for the presence of cointegration between saving and investment for all the sectors. The end-of-sample cointegration breakdown tests suggest the breakdowns of cointegration between saving and investment in all the sub-sample periods for the household and PCB sectors, but not for the public sector. The FOF accounts could be used to monitor the borrowing and lending operations of both financial and non-financial sectors and to identify any deformities in the system. The regulatory and supervisory policies need to be put in place promptly to resolve the identified deformities at their early stages, before they magnify and make the entire system dysfunctional.