Optimal accumulation in an endogenous growth setting with human capital
(2007) Journal of Economic Theory — Vol. 134, n° 1, p. 361-378 (2007)
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- Authors
- Abstract
- This paper considers a three-overlapping-generations model of endogenous growth wherein human capital is the engine of growth. It first contrasts the laissez-faire and the optimal solutions. Three possible accumulation regimes are distinguished. Then it discusses a standard set of tax-transfer instruments that allow for decentralization of the social optimum. Within the limits of our model, the rationale for the standard pattern of intergenerational transfers (the working-aged financing the education of the young and the pension of the old) is seriously questioned. On pure efficiency grounds, the case for generous public pensions is rather weak.
- Affiliations
United Nations Commission for Latin America and the Caribbean Economic Development Unit University of Liege Department of Economics
Citations
Docquier, F., Paddison, O., & Pestieau, P. (2007). Optimal accumulation in an endogenous growth setting with human capital. Journal of Economic Theory, 134(1), 361-378. https://doi.org/10.1016/j.jet.2006.03.008 (Original work published 2007)