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Essays on Macroeconomic Growth: The Role of Human Capital

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dc.contributor.advisor Turnovsky, Stephen J en_US Mitra, Aditi en_US 2012-09-13T17:38:28Z 2012-09-13T17:38:28Z 2012-09-13 2012 en_US
dc.identifier.other Mitra_washington_0250E_10514.pdf en_US
dc.description Thesis (Ph.D.)--University of Washington, 2012 en_US
dc.description.abstract This paper analyzes the effects of technological change on growth and inequality in a two-sector endogenous growth model. The first two chapters consider two variations of the time path of the shock - discrete and gradual. We find that the effects on inequality depend upon: (i) whether the underlying source of inequality stems from differential initial endowments of human capital or physical capital, (ii) the time horizon over which the productivity increase occurs. Our results suggest that an increase in the growth rate resulting from productivity enhancement in the human capital sector will increase inequality. Productivity enhancement in the final output sector, although not having permanent growth effects, will reduce inequality. In either case the responses of inequality increase, the more gradually the productivity increase takes place. In the third chapter, we study this tradeoff in the context of fiscal policy. Where-as a subsidy to the human capital sector unambiguously increases growth and reduces inequality, the magnitude of the tradeoff depends on whether this subsidy is financed by taxes on income from physical capital, or from human capital. We find that, in general, a tax on human capital is preferable to one on physical capital, since it generates a more favorable tradeoff. Once again, the results eventually depend on the initial source of heterogeneity. The model can generate a positive or negative relationship between inequality and growth, depending upon the relative size of these effects, consistent with the diverse empirical evidence. en_US
dc.format.mimetype application/pdf en_US
dc.language.iso en_US en_US
dc.rights Copyright is held by the individual authors. en_US
dc.subject Fiscal Policy; Growth; Human Capital; Inequality; Intersectoral; Productivity en_US
dc.subject.other Economics en_US
dc.subject.other Economics en_US
dc.title Essays on Macroeconomic Growth: The Role of Human Capital en_US
dc.type Thesis en_US
dc.embargo.terms No embargo en_US

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