National Education and Global Economic Growth: A Synthesis of the Uzawa–Lucas Two-Sector and the Oniki–Uzawa Trade Models

Abstract

This paper deals with issues related to global economic growth with capital accumulation and human capital. The economic system is structurally based on the Solow growth model, the Uzawa–Lucas model with education, and the Oniki–Uzawa trade model. We take account of three ways of accumulating human capital: learning by producing, learning by education, and learning by consuming. The model describes a dynamic interdependence among wealth accumulation, human capital accumulation, division of labor, and international trade. The countries differ in preference (such as propensities to save) and to receive education, human capital utilization, and accumulation efficiency and creativity. First, we show that the dynamics of the J-country world economy is described by 2J differential equations. Then, we simulate the motion of the global economy with three economies. We also examine the effects of changes in the propensity to receive education, efficiency of learning, and the population upon dynamic paths of the system.