Formal education and public knowledge

Ali²

2016

SSRN Journal

This paper extends a two-period Overlapping Generations model of endogenous growth where the interactions between public infrastructure and human capital with R&D activities, and growth are studied. The paper makes two important contributions. First, it accounts for the spillover e¤ect of the stock of ideas on learning which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a two-way interaction between human capital and innovation. The paper then applies various econometric methods, which con…rm the above theoretical thesis. Second, the solutions of the model emphasise the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. However, the …ndings also show that trade-o¤s in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more e¤ective to foster growth through an o¤setting cut in another productive component, namely, education. In light of these potential trade-o¤s, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve e¢ cient outcomes.

Section: Calibration and Policy Experimentssupporting

confidence: 80%

The Spillover Effects of Innovative Ideas on Human Capital

Ali²

2016

SSRN Journal

“…Unlike Agénor and Neanidis (), in this paper the parameter η = 0.61, which determines the elasticity of substitution between intermediate goods, is similar to the value reported by Iacopetta () and Chen and Funke (, Table ). In the R&D sector, the elasticity with respect to existing stock of ideas,

ϕ_{2}

, is slightly lower than their value; it is set equal to 0.6 to begin with, whereas in the human capital sector, the elasticity with respect to public–private capital ratio,

ν_{3}

, is set equal to 0.0 in the benchmark case; a sensitivity analysis with respect to both parameters is reported later on.…”

Section: Calibration and Policy Experimentssupporting

confidence: 63%

The spillover effects of innovative ideas on human capital

Review Development Economics

Ali

2017

This paper extends a two-period overlapping generations model of endogenous growth where the interactions between public infrastructure and human capital with research and development (R&D) activities and growth are studied. The paper makes two important contributions. First, it accounts for the spillover effect of the stock of ideas on learning, which in turn promotes the production of innovative technologies. In doing so, it brings to the fore a twoway interaction between human capital and innovation. The paper then applies various econometric methods which confirm the above theoretical thesis. Second, the solutions of the model emphasize the important role public spending on infrastructure, human capital and R&D can play in promoting economic growth. However, the findings also show that trade-offs in the allocation of public spending may inevitably emerge. In particular, investment in public infrastructure at the expense of spending on R&D is less likely to succeed in promoting economic growth, whereas it may be more effective to foster growth through an offsetting cut in another productive component, namely, education. In light of these potential trade-offs, governments in low-income countries need to use their limited budgets as part of holistic measures in order to achieve efficient outcomes.

“…In the intermediate good sectors, the parameter η (which determines the price elasticity of the demand for intermediate goods) is set to 0.61, similar to the value used by Iacopetta (2011) and Chen and Funke (2013). This implies an elasticity of substitution between intermediate inputs of about 2.6, which corresponds also to the value found by Acemoglu and Ventura (2002).…”

Section: Parameterizationmentioning

confidence: 99%

Infrastructure and Industrial Development With Endogenous Skill Acquisition

Agénor

2018

Bulletin of Econ Res

The link between infrastructure and industrial development is studied in an OLG model with endogenous skill acquisition. Industrial development is defined as a shift from an imitation‐based, low‐skill economy to an innovation‐based, high‐skill economy, where ideas are produced domestically. Imitation generates knowledge spillovers, which enhance productivity in innovation. Changes in industrial structure are measured by the ratio of the variety of imitation‐ to innovation‐based intermediate goods. The model also distinguishes between basic infrastructure, which helps to promote learning by doing and productivity in imitation activities, and advanced infrastructure, which promotes knowledge networks and innovation. Numerical experiments, based on a parameterized version for a stylized low‐income country, show that changes in the level and composition of public investment in infrastructure may have significant effects on the structure of the labour force and the process of industrial development.