This paper proposes three models of social capital and growth that incorporate different perspectives on the concept of social capital and the empirical evidence gathered to date. In these models, social capital impacts growth by assisting in the accumulation of human capital, by affecting financial development through its effects on collective trust and social norms, and by facilitating networ...

Departing from explanations that involve either altruistic or political motivations of donors, we link a donor’s willingness to give aid to economic incentives and returns. Since targeted aid might increase the returns from trade and FDI linkages for donors, there exists a non-altruistic basis for helping poor countries. We explore this idea by developing a two-country dynamic strategic interac...

It has been widely recognized that China has had a large pool of surplus labour. However, despite its significant implications for wage levels and the Chinese economy, the current debates yield conflicting results as to whether the Lewis turning point has been reached. This paper clarifies a theoretical issue about the mechanisms of surplus labour absorption, subsequently indentifies two Lewis ...

We study the mechanisms according to which social infrastructure influences the preservation of physical capital and, consequently, economic growth. The presented model considers that social infrastructure is a specific type of human capital, which acts in order to preserve already existing physical capital, by, e.g. reducing the incentive for rent seeking or corruption. Using an innovative met...

As a consequence of falling relative demand for low skilled labor in the OECD, people with no or minor qualification experience a deterioration of their economic situation. While flexible labor markets have led to higher wage differentials in the USA, the major problem of most European countries is the high rate of unemployment of the low skilled. To integrate currently discussed determinants o...

We generalize a trade model with firm-specific heterogeneity and R&D-based growth to allow for an endogenous education decision of households and an endogenously evolving population. Our framework is able to explain cross-country differences in living standards and trade intensities by the differential pace of human capital accumulation among industrialized countries. Consistent with the empiri...

We consider economic growth in the presence of a minimal survival consumption level when preferences are lexicographic giving highest priority to the survival of the current and then all future generations. Knowledge of production is incomplete so future output made possible by current saving must be estimated. The resulting capital accumulation path is compared with the inter–temporally optima...

The paper examines the interactions between economic integration and population agglomeration in a middle product economy displaying neoclassical growth. There are two vertically integrated economies. Each consists of a large number of final good competitive firms operating plants in both regions, and a large number of intermediate goods monopolistically competitive firms operating each in only...

We analyze the differential growth effects of basic research, applied research, and embodied human capital accumulation in an R&D-based growth model with endogenous fertility and endogenous education. In line with the empirical evidence, our model allows for i) a negative association between long-run economic growth and population growth, ii) a positive association between long-run economic gro...

Using 1959—1991 growth rates for 449 4-digit US manufacturing industries, I test ‘idea’ and ‘rival human capital’ models of endogenous growth. I find the following: First, TFP growth is faster in industries that are more intensive in capital and intermediate goods and less intensive in labor, favoring idea models over rival human capital models. Second, industries with rapidly declining prices ...