Human capital, knowledge spillovers, and one kind of semi-endogenous regional economic growth

Abstract

We study the implications of the interaction between human capital and knowledge spillovers for one kind of semi-endogenous economic growth in a region. We focus on two cases. In the first (second) case, there is no growth (growth) in the stock of human capital but knowledge spillovers are complete (incomplete). Our analysis leads to four findings for each of the above two cases. First, we describe the balanced growth path equilibrium. Second, we describe the possible existence of transitional dynamics. Third, we discuss the circumstances in which there exists a human capital induced scale effect. Fourth, we discuss the real world plausibility of each of the above two cases. We conclude with a brief discussion of how our single region model might be extended to study the case of \(I\ge 2\) regions.