We extend the augmented Solow models, suggested by Mankiw et al. (1992) and Nonnemann and Vanhoudt (1996), by using alternative measures of investment in human capital and a longer time period. Our results suggest that a model including an appropriate measure of human capital and R&D performs best also outside OECD countries. In addition, we study the problem of reverse causality, raised by Bils and Klenow (2000). Our results are more mixed than theirs, supporting the view that education is simultaneously both a productive investment and a consumption good.
JEL classification: O40, H52, I20
Keywords: growth, education, R&D, augmented Solow model
Length: 46 pages
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