Human Capital Formation, Public Debt and Economic Growth

21 Pages Posted: 28 Feb 2006

See all articles by Alfred Greiner

Alfred Greiner

Bielefeld University - Department of Business Administration and Economics

Date Written: February 13, 2006

Abstract

This paper presents an endogenous growth model with human capital, where human capital formation is the result of public education. The government finances expenditures in the schooling sector by the tax revenue and by public deficit. In addition, the government sets the primary surplus such that it is a positive linear function of public debt which guarantees that public debt is sustainable. The paper analyzes the structure of the growth model and derives implications of public debt. Further, a sensitivity analysis of the dynamics of the model is presented and it is demonstrated that for certain parameter values the model may produce multiple balanced growth paths and sustained cycles.

Keywords: Human Capital, Public Education, Sustainability, Endogenous Growth

JEL Classification: H52, H60

Suggested Citation

Greiner, Alfred, Human Capital Formation, Public Debt and Economic Growth (February 13, 2006). Available at SSRN: https://ssrn.com/abstract=884333 or http://dx.doi.org/10.2139/ssrn.884333

Alfred Greiner (Contact Author)

Bielefeld University - Department of Business Administration and Economics ( email )

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Bielefeld, 33501
Germany
+49 521 106 4859 (Phone)
+49 521 106 67120 (Fax)

HOME PAGE: http://phoenix.wiwi.uni-bielefeld.de/lehrbereiche/vwl/wipol

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