Human capital, externalities and growth in an overlapping generations model

D Gaumont, Daniel Leonard

    Research output: Contribution to journalArticle

    4 Citations (Scopus)

    Abstract

    We consider an overlapping generations model with endogenous labor supplies by young and old and a human capital accumulation process that relies on the interaction of these two types of labor. This interaction is not understood by the market hence we analyze fiscal policies designed to remedy this. We argue that taxes must be acceptable to people alive at the time of planning. This makes many proposed taxes unfeasible. Two distinct paths to growth emerge; one through increased savings and another through increased workforce participation. The long run rate of growth depends entirely on human capital but we find this to be of little relevance. Some simulation results are presented for two stylized economic blocks calibrated on the USA and the EURO-zone.

    Original languageEnglish
    Pages (from-to)186-200
    Number of pages15
    JournalResearch in Economics
    Volume64
    Issue number3
    DOIs
    Publication statusPublished - 2010

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