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- Title
Missing Markets for Human Capital and Differences in Growth.
- Authors
Perera-Tallo, Fernando
- Abstract
Standard growth models predict that consumption and GNP growth rates should not differ among countries when international capital markets are considered. This paper introduces a generational structure which implies that the return on human capital exceeds the return on physical capital in equilibrium. Thus, when the return on human capital differs internationally, the growth rates of consumption and GNP vary across countries even when there is free capital mobility. Furthermore, GNP and GDP grow at the same rate within a country, there is positive investment in every country, and poverty traps persist in spite of international capital markets.
- Subjects
HUMAN capital; RATE of return; ECONOMIC equilibrium; GROWTH rate; CONSUMPTION (Economics); GROSS national product
- Publication
Economica, 2005, Vol 72, Issue 286, p241
- ISSN
0013-0427
- Publication type
Article
- DOI
10.1111/j.0013-0427.2005.00413.x