In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

/pdf/social-capital-in-the-creation-of-human-capital-1836wo2872.pdf

Social Capital in the Creation of Human Capital

This paper examines whether the Solow growth model is consistent with the international variation in the standard of living. It shows that an augmented Solow model that includes accumulation of human as well as physical capital provides an excellent description of the cross-country data. The paper also examines the implications of the Solow model for convergence in standards of living, that is, for whether poor countries tend to grow faster than rich countries. The evidence indicates that, holding population growth and capital accumulation constant, countries converge at about the rate the augmented Solow model predicts. This paper takes Robert Solow seriously. In his classic 1956 article Solow proposed that we begin the study of economic growth by assuming a standard neoclassical production function with decreasing returns to capital. Taking the rates of saving and population growth as exogenous, he showed that these two vari- ables determine the steady-state level of income per capita. Be- cause saving and population growth rates vary across countries, different countries reach different steady states. Solow's model gives simple testable predictions about how these variables influ- ence the steady-state level of income. The higher the rate of saving, the richer the country. The higher the rate of population growth, the poorer the country. This paper argues that the predictions of the Solow model are, to a first approximation, consistent with the evidence. Examining recently available data for a large set of countries, we find that saving and population growth affect income in the directions that Solow predicted. Moreover, more than half of the cross-country variation in income per capita can be explained by these two variables alone. Yet all is not right for the Solow model. Although the model correctly predicts the directions of the effects of saving and

/pdf/a-contribution-to-the-empirics-of-economic-growth-27cl5gkqam.pdf

A Contribution to the Empirics of Economic Growth

Large sample properties of generalized method of moments estimators

Growth in this model is driven by technological change that arises from intentional investment decisions made by profit-maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported. Instead, the equilibrium is one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

/pdf/endogenous-technological-change-4yzdlw043b.pdf

Endogenous Technological Change

Growth in this model is driven by technological change that arises from intentional investment decisions made by profit maximizing agents. The distinguishing feature of the technology as an input is that it is neither a conventional good nor a public good; it is a nonrival, partially excludable good. Because of the nonconvexity introduced by a nonrival good, price-taking competition cannot be supported, and instead, the equilibriumis one with monopolistic competition. The main conclusions are that the stock of human capital determines the rate of growth, that too little human capital is devoted to research in equilibrium, that integration into world markets will increase growth rates, and that having a large population is not sufficient to generate growth.

https://papers.ssrn.com/sol3/Delivery.cfm/nber_w3210.pdf?abstractid=226703&mirid=1

This paper is a theoretical study of rural-urban migration-urbanization - as it has occurred in many low-income economies in the postwar period. This process is viewed as a transfer of labor from a traditional, land-intensive technology to a human capital-intensive technology with an unending potential for growth. The model emphasizes the role of cities as places in which new immigrants can accumulate the skills required by modern production technologies.

Life Earnings and Rural-Urban Migration

Analysis of a new Mexican database reveals that air-borne, suspended particulate emissions per employee by plants with 20 or less employees are significantly greater than by larger plants within the same manufacturing sector. From a second, new data set on manufacturing plants in Brazil, it is shown that industry in lower-income areas displays a higher concentration of the dirtiest industrial sectors and of smaller plants (which are dirtier). However, harm to humans from industrial air pollution in Brazil is found to be greater in higher-income areas and most of this harm derives from larger plants. This is not simply a reflection of the greater prevalence of manufacturing in urban areas, for the rising projections of human mortality among higher wage municipalities hold, even controlling for population density. Resolution of this apparent paradox hinges on the distinction between emission intensities and total emissions, the latter determining the level of harm, a distinction that has not always been made clear in the course of debate.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/26028814339699FA1CD700732D015ECF/S1355770X02000220a.pdf/div-class-title-plant-size-industrial-air-pollution-and-local-incomes-evidence-from-mexico-and-brazil-div.pdf

Plant size, industrial air pollution, and local incomes: evidence from Mexico and Brazil

The transcript of a panel discussion marking the fiftieth anniversary of John Muth’s “Rational Expectations and the Theory of Price Movements” (Econometrica 1961). The panel consists of Michael Lovell, Robert Lucas, Dale Mortensen, Robert Shiller, and Neil Wallace. The discussion is moderated by Kevin Hoover and Warren Young. The panel touches on a wide variety of issues related to the rational-expectations hypothesis, including: its history, starting with Muth’s work at Carnegie Tech; its methodological role; applications to policy; its relationship to behavioral economics; its role in the recent financial crisis; and its likely future.

/pdf/rational-expectations-retrospect-and-prospect-rcwlysjohl.pdf

Robert E. Lucas

Papers

Life Earnings and Rural-Urban Migration

Plant size, industrial air pollution, and local incomes: evidence from Mexico and Brazil

Rational expectations: retrospect and prospect

Restructuring the Malaysian Economy

International Environmental Indicators: Trade, Income, and Endowments