Working Paper: NBER ID: w24570
Authors: Nancy L. Stokey
Abstract: A model is developed in which two complementary forms of investment contribute to growth—technology and skill acquisition, and growth takes two forms—TFP and variety growth. The rate of TFP growth depends more heavily on the parameters governing skill accumulation, while variety growth depends, roughly, on the difference between the parameters governing technology and skill accumulation. Conditions for the existence of a BGP are established, and the effects of various parameters are characterized. In an example, subsidies to skill acquisition (technology acquisition) are powerful tools for stimulating TFP growth (variety growth). Investment incentives off the BGP are also explored.
Keywords: No keywords provided
JEL Codes: O30; O33; O34; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| skill improvements (J24) | TFP growth (O49) |
| skill improvements (J24) | variety growth (O41) |
| technology improvements (O39) | variety growth (O41) |
| technology improvements (O39) | TFP growth (O49) |
| skill investment (J24) | productivity (O49) |
| continuous improvements in technology (O39) | returns on skill investments (J24) |
| TFP growth (O49) | economic growth (O49) |