The relation between economic growth and military resource allocations is complex. On the one hand, more rapid growth and a larger gross domestic product (GDP) increases resources available for military spending. On the other hand, larger allocations for military purposes may slow economic growth, to the extent that such allocations reduce non-military capital formation. Moreover, the scale of ...

This paper analyzes the interaction between intergenerational wealth transmission, human capital investments under uninsurable labor income risk, and economic growth in a small open overlapping-generations economy with heterogeneous agents. It demonstrates how the role of the personal income distribution for an economy’s process of development through risky human capital accumulation depends on...

This paper examines the linkage between aggregate real output, capital, labour, education, and productivity within a growth accounting framework for 27 Chinese provinces between 1990 and 2000. The results suggest that human capital has had a significant role in facilitating economic growth of all of the provinces throughout the 1990s. Regional disparities in factor accumulation are also conside...

This paper investigates the empirical validity of different classes of ‘development trap’ models of economic growth. Quah (1993) finds that the cross country distribution of per capita income is moving toward a twin peaked distribution. This finding has supported and encouraged a large theoretical literature on development traps that produce twin peaks through physical and human capital accumul...

We develop a Ramsey type model of economic growth in which the "Engine of Growth" is public capital accumulation. Public capital is a public good, and is financed by taxes on private output. The government may either use the taxes gathered to fund public capital accumulation or consume the resourses itself; that is engage in corruption. There is an irreducable level of endogenously determined c...

This paper develops an endogenous growth model of a dual economy where human capital accumulation is the source of economic growth. The dualism between the rich individuals and the poor individuals exists in the mechanism of human capital accumulation. Rich individuals allocate labour time not only for their own production and knowledge accumulation but also to train the poor individuals. Stead...

This paper aims to provide further insights into the linkages between stock market development and economic growth within the context of a dynamic general equilibrium framework of informational asymmetries, endogenous contract choice and capital accumulation. When firms have access to different projects with different unobservable rate of returns, the market valuation of those projects is an “a...

John Rae’s Statement of Some New Principles on the Subject of Political Economy (1834; cited below as NP) was intended to refute Adam Smith’s analysis of the causes of the wealth of nations and the laissez-faire conclusions generally drawn from it. ‘Invention’ plays a central role in Rae’s argument. He accused Smith of attributing economic growth exclusively to the accumulation of capital and o...

This paper offers an explanation for the widespread phenomenon of uniform public schooling, which is viewed here as a way for the government to precommit itself to restraints on future income redistribution. Such precommitment is likely to enhance accumulation of human capital, to bolster economic growth, and, under certain circumstances, to constitute a preferred choice for a majority of voters.

Following years of rapid economic growth, China currently faces a crisis of its economic institutions. Unconstrained business behavior has led to the accumulation of externalities with high social costs. In this paper we consider the challenges of institutional change that China faces, especially the need to evolve a system of ‘hard constraints’ reinforced by ‘soft constraints’. We describe the...