Schooling and Public Capital in a Model of Endogenous Growth

Download or read book Schooling and Public Capital in a Model of Endogenous Growth written by Pierre-Richard Agnor and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the allocation of public spending between education services and infrastructure investment in an endogenous growth model of a developing economy where public capital in infrastructure affects human capital accumulation. The balanced growth path is derived and the possibility of local indeterminacy is discussed. Dynamics associated with a budget-neutral reallocation of spending from education to infrastructure are studied through numerical simulations. The growth-maximizing share of investment in infrastructure is shown to depend on the goods production technology and the productiveness of infrastructure in the schooling technology. Properties of the welfare-maximizing solution are also discussed.