We introduce social capital accumulation into a neoclassical model, showing how it differs from physical and human capital accumulation. We take the view that social capital is crucial to the enjoyment of socially provided goods and that it is mainly accumulated by means of participation to social activities. Under-investment in social capital may lead a growing economy to fall into a social po...

The famous Mincer equation regressing log earnings on years of schooling is derived from a linear human capital accumulation equation at the individual level. Even if the cross-sectional Mincer equation holds at the level of individuals, it does not hold at the macro level of countries because aggregation of human capital has to take into account its vintage structure: human capital is embodied...

This paper proposes a dynamic economic model with wealth accumulation and human capital accumulation. The economic system consists of one production sector and one education sector. We take account of three ways of improving human capital: learning by producing, learning by education, and learning by consuming. The model describes a dynamic interdependence between wealth accumulation, human cap...

Despite the liberalization of capital ‡ows among OECD countries, equity home bias remains sizable. We depart from the two familiar explanations of equity home bias: transaction costs that impede international diversi…cation, and terms of trade responses to supply shocks that provide risk sharing, so that there is little incentive to hold diversi…ed portfolios. We show that the following ingredi...