Showing papers on "Capital deepening published in 1991"
Book•
01 Jan 1991
TL;DR: Grossman and Helpman as discussed by the authors developed a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
Abstract: Traditional growth theory emphasizes the incentives for capital accumulation rather than technological progress. Innovation is treated as an exogenous process or a by-product of investment in machinery and equipment. Grossman and Helpman develop a unique approach in which innovation is viewed as a deliberate outgrowth of investments in industrial research by forward-looking, profit-seeking agents.
6,911 citations
TL;DR: In this article, the authors examine the effects of capital mobility on different groups in national societies and on the politics of economic policymaking and show that increased capital mobility tends to favor owners of capital over other groups.
Abstract: Capital moves more rapidly across national borders now than it has in at least fifty years and perhaps in history. This article examines the effects of capital mobility on different groups in national societies and on the politics of economic policymaking. It begins by emphasizing that while financial markets are highly integrated within the developed world, many investments are still quite specific with respect to firm, sector, or location. It then argues that contemporary levels of international capital mobility have a differential impact on socioeconomic groups. Over the long run, increased capital mobility tends to favor owners of capital over other groups. In the shorter run, owners and workers in specific sectors in capital-exporting countries bear much of the burden of adjusting to increased capital mobility. These patterns can be expected to lead to political divisions about whether or not to encourage or increase international capital market integration. The article then demonstrates that capital mobility also affects the politics of other economic policies. Most centrally, it shifts debate toward the exchange rate as an intermediate or ultimate policy instrument. In this context, it tends to pit groups that favor exchange rate stability against groups that are more concerned about national monetary policy autonomy and therefore less concerned about exchange rate stability. Similarly, it tends to drive a wedge between groups that favor an appreciated exchange rate and groups that favor a depreciated one. These divisions have important implications for such economic policies as European monetary and currency union, the dollar-yen exchange rate, and international macroeconomic policy coordination.
1,056 citations
Book•
01 Nov 1991
TL;DR: The chaos and order in the capital markets is well known book in the world, of course many people will try to own it as mentioned in this paper, why don't you become the first? Still confused with the way?
Abstract: Why should wait for some days to get or receive the chaos and order in the capital markets book that you order? Why should you take it if you can get the faster one? You can find the same book that you order right here. This is it the book that you can receive directly after purchasing. This chaos and order in the capital markets is well known book in the world, of course many people will try to own it. Why don't you become the first? Still confused with the way?
541 citations
TL;DR: In this paper, a model of growth is developed in which finite-lived individuals invest in human capital, investments have a positive external effect on the human capital of later cohorts, and labor with more human capital produces higher quality goods.
Abstract: A model of growth is developed in which finite-lived individuals invest in human capital, investments have a positive external effect on the human capital of later cohorts, and labor with more human capital produces higher-quality goods. Stationary growth paths are analyzed, paths along which human capital and the quality of goods grow at a common, constant rate. It is also shown that if a small open economy is either very advanced or very backward relative to the rest of the world, then its rate of investment in human capital is lower under free trade than under autarky.
425 citations
TL;DR: In this paper, the authors develop a model of vintage human capital in which each technology requires vintage-specific skills and examine the properties of a stationary equilibrium for the economy, characterized by an endogenous distribution of skilled workers across vintages.
Abstract: We develop a model of vintage human capital in which each technology requires vintage-specific skills. We examine the properties of a stationary equilibrium for our economy. The stationary equilibrium is characterized by an endogenous distribution of skilled workers across vintages. The distribution is shown to be single-peaked. Under general conditions, there is a lag between the appearance of a technology and its peak usage, a phenomenon known as diffusion. An increase in the rate of exogenous technological change shifts the distribution of human capital to more recent vintages, thereby increasing the diffusion rate.
400 citations
TL;DR: In this article, an endogeneous growth model is developed that produces convergence in per capita income and growth rates of output, and explains income convergence of the developed world, regional income convergence within the United States, and intergenerational mobility.
Abstract: An endogeneous growth model is developed that produces convergence in per capita income and growth rates of output. Agents have identical preferences and access to identical technologies of production and investment, but differing levels of initial human capital. A spillover effect of human capital in the investment technology provides below-average human capital agents with a higher rate of return on investment than above-average human capital agents. Thus below-average human capital agents grow faster than above-average human capital agents. This model explains income convergence of the developed world, regional income convergence within the United States, and intergenerational mobility.
327 citations
Posted Content•
275 citations
Posted Content•
TL;DR: Catch-up in total factor productivity among the "group of seven" was evident between 1870 adn 1979, though much slower before 1938 than after 1950 as discussed by the authors, and the United States overtook the United Kingdom in technological leadership in 1900 when its capital:labor growth was more than three times higher.
Abstract: Catch-up in total factor productivity (TFP) among the "group of seven" was evident between 1870 adn 1979, though much slower before 1938 than after 1950. Capital:labor ratios also converged over the long period, though the process was much stronger after 1960. TFP catch-up is found to be positively associated with capital:labor growth and strongest when capital intensity is growing most rapidly. The United States overtook the United Kingdom in technological leadership in 1900 when its capital:labor growth was more than three times higher. The steady deterioration in the United Kingdom's relative TFP since 1900 and the United States' since 1950 are both associated with low rates of capital formation. Copyright 1991 by American Economic Association.
226 citations
Posted Content•
Abstract: No abstract is available for this paper.
216 citations
TL;DR: In this paper, the authors study the dynamics of growth and investment in a continuous time model with vintage capital, which is characterized by nonexponential rates of depreciation and technical change and can incorporate "gestation lags" as well as "learning by using".
201 citations
TL;DR: In this article, the authors suggest that the agenda should be broadened to include the efficiency of factor use, infrastructure (broadly interpreted), and sectoral allocation, together with the Kaldorian concern for dynamic increasing returns, provide substantial promise for future research.
Abstract: The growth theories of the 1950s and 1960s emphasized capital accumulation and technical progress as explanations of growth. More recently theoretical attention has focused on the understanding of progress in terms of learning/human capital (in the tradition of K. Arrow) and investment in research (following H. Uzawa). These newer developments have made some, but only limited, progress. The experience of developing countries suggests that the agenda should be broadened to include the efficiency of factor use, infrastructure (broadly interpreted), and sectoral allocation. These aspects, together with the Kaldorian concern for dynamic increasing returns, provide substantial promise for future research. Copyright 1991 by Royal Economic Society.
Book•
01 Jan 1991
TL;DR: In this paper, the Marxian variables for the postwar US economy: rate of surplus-value, technical composition of capital, organic composition, distribution of capital across industries turnover time of capital multiple shifts rate of profit comparison with Weisskopf's estimates comparison with Wolff's estimates estimates of the Marxians variables, 1977-87.
Abstract: Part 1 Marx's theory of the falling rate of profit: increase in the composition of capital? - definition of the composition of capital theory of the tendency to increase composition of capital increase faster than the rate of surplus-value? - Marx's argument formal model with a constant real wage formal model with an increasing real wage Okishio's theorem - the theorem, criticisms, evaluation. Part 2 Conceptual issues in the estimation of the Marxian variables: money or labour units non-capitalist production non-production capital (productive labour/unproductive labour) residential housing taxes on wages recent criticisms of Marx's concepts of productive labour and unproductive labour. Part 3 Estimates of the Marxian variables for the postwar US economy: rate of surplus-value - composition of capital technical composition of capital value composition of capital organic composition of capital distribution of capital across industries turnover time of capital multiple shifts rate of profit comparison with Weisskopf's estimates comparison with Wolff's estimates estimates of the Marxian variables, 1977-87. Part 4 The decline of the conventional rate of profit: "profit squeeze" explanations Weisskopf - "rising strength of labour" Wolff - "slower productivity growth" summary Marxian explanation - Marxian theory of the conventional rate of profit estimates of the Marxian determinants share of profit empirical test. Part 5 The causes of the increase of unproductive labour: detailed estimates of unproductive labour commercial labour financial labour finance insurance and real estate supervision labour - causes of increases effects of increase conclusions. Part 6 Conclusion: main conclusions further research future trends limits of government policies. Appendices: detailed estimates sources and methods assessment of bias.
TL;DR: In this paper, the consequences of increased foreign capital for an economy with unemployment are analyzed under different assumptions that influence the relative oportunity costs of domestic labor, and the authors suggest that the implications of the literature on the welfare effect of increased Foreign capital are misleading.
Abstract: The consequences of increased foreign capital for an economy with unemployment are analyzed under different assumptions that influence the relative oportunity costs of domestic labor. The investigation suggests that the implications of the literature on the welfare effect of increased foreign capital are misleading. The paper shows that welfare gains result from increased foreign capital if the opportunity costs of labor are sufficiently low relative to the wages earned by laborers employed by new foreign capital. A number of cases where this occurs are presented. The findings of the paper suggest that cases where increased foreign capital must be welfare-harming represent extreme parameterizations in the set of possibilities. Copyright 1991 by The London School of Economics and Political Science.
TL;DR: In this article, the authors provide a counterexample to some recent results of Grout and others which state that in a bargaining situation without binding wage agreements, the capital stock will be biased downwards.
TL;DR: In this article, inflation taxes may raise or lower real interest rates depending upon whether or not physical and/or human capital are liquidity constrained, where the engine of growth is human capital acquired via formal education.
Posted Content•
TL;DR: The authors showed that under technological uncertainty optimal returns to capital should exceed, rather than equal, the rate of population growth, where risk is measured in part by the correlation of returns with aggregate marginal utility.
TL;DR: In this article, the effects of a tax reform of conversion from capital income to consumption taxes on capital accumulation in a two-country model were investigated in the territorial system and the residence system.
Abstract: This paper investigates the effects of a tax reform of conversion from capital income to consumption taxes on capital accumulation in a two-country model. In the territorial system, the tax reform will normally lead to a negative comovement between capital accumulation in two countries, while in the residence system it will lead to a positive comovement. Copyright 1991 by Royal Economic Society.
TL;DR: In this article, the authors construct a positive model to show that both fixed capital expansion and the inflationary monetary policy in the decade can be explained by the mixed mechanisms of resource allocation brought about by decentralization and the continued quantity drive nature of the economy.
TL;DR: The authors developed a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations despite a common technology, constant returns to scale, and perfect international capital mobility.
Abstract: The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations despite a common technology, constant returns to scale, and perfect international capital mobility. Private consumption is derived from a three-period overlapping generations specification. The source of productivity (growth) differentials in our model is the existence of a nontraded capital good (“human capital”) whose augmentation requires a nontraded current input (time spent by the young in education rather than leisure). We consider the influence on productivity growth differentials of private thrift, public debt, the taxation of capital and savings, and policy toward human capital formation.
TL;DR: In this paper, the authors examine why and how capital markets have developed in a low-income socialist country and argue that the development is the response of economic agents operating under a more market-oriented economic environment with a highly regulated and inefficient banking system.
01 Jul 1991
TL;DR: In this article, a model is constructed for the determination of human capital accumulation, job matching, and mobility that accounts for heterogeneity on both sides of the labor market and provides explanations for observable relationships between earnings, mobility, age, and job tenure.
Abstract: This article integrates human capital theory with a theory of information accumulation and labor mobility. A model is constructed for the determination of human capital accumulation, job matching, and mobility that accounts for heterogeneity on both sides of the labor market. The model provides explanations for observable relationships between earnings, mobility, age, and job tenure. It also provides comparative static results of how the labor market equilibrium is affected by changes in the economic environment.
TL;DR: In this paper, the authors compare the provision of public goods under cooperative and non-cooperative tax policies and show that in a world with high capital mobility, an increase in equity taxes is likely to induce a capital out-flow.
Posted Content•
TL;DR: In this article, the authors developed a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations, even though these countries show a common technology, constant returns to scale and perfect international capital mobility.
Abstract: The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations, even though these countries show a common technology, constant returns to scale and perfect international capital mobility. Private consumption is derived from a three-period overlapping generations specification. The source of productivity (growth) differentials in our model is the existence of a non-traded capital good (`human capital') whose augmentation requires a non-traded current input (time spent by the young in education rather than leisure). We consider the influence on productivity growth differentials of private thrift, public debt, the taxation of capital and savings and of policy towards human capital formation.
TL;DR: The role of capital goods production in generating and disseminating technical learning is discussed in this article, after which the relative underdevelopment of Mexico's capital goods sector is documented, and a review of past Mexican economic policies in an attempt to identify reasons for a lackluster capital goods performance.
Abstract: Compared to other advanced Third World nations, Mexico's capital goods sector has been disappointing. A number of studies have focused on the economic consequences of this condition; the adverse impact on Mexico's balance of payments has been especially emphasized.' An opportunity for enhancing Mexico's technological capacity fostered through a more robust capital goods sector has received insufficient attention, a deficiency that this article attempts to remedy. The study is organized as follows. The role of capital goods production in generating and disseminating technical learning is discussed (Section I), after which the relative underdevelopment of Mexico's capital goods sector is documented (Section II). Section III reviews past Mexican economic policies in an attempt to identify reasons for a lackluster capital goods performance. The final section examines policy implications suggested by the Mexican experience. Before proceeding, however, we might note that there is no universally acceptable definition of capital goods. Partly for this reason, and probably because of qualitative differences in data collection, what is reported in statistical compilations as capital goods differs from country to country. Daniel Chudnovsky et al. observe: "The term 'capital goods' generally means the machinery and transport equipment which enter into capital formation. These goods are produced by the metalworking or engineering industries" [Chudnovsky, Nagao, and Jacobs
Posted Content•
TL;DR: In this paper, a simple optimal tax analysis for an open economy, which is fully integrated in the world capital markets, is carried out and the analysis identifies well defined circumstances in which the capital income tax vanishes.
Abstract: The increased integration of the world capital market implies that the supply of capital becomes more elastic, and therefore potentially a less efficient base for taxation. In general, the optimal taxation of capital income is subject to two conflicting forces. On the one hand the return on existing capital is a pure rent which is efficient to fully tax away. On the other hand taxing the returns on investment in new capital would retard growth, thus generating inefficiencies. Capturing these considerations, the paper carries out a simple optimal tax analysis for an open economy, which is fully integrated in the world capital markets. The analysis identifies well defined circumstances in which the capital income tax vanishes.
Posted Content•
TL;DR: In this article, the authors developed a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations, even though these countries show a common technology, constant returns to scale and perfect international capital mobility.
Abstract: The paper develops a two-country endogenous growth model to investigate possible causes for the existence and persistence of productivity growth differentials between nations, even though these countries show a common technology, constant returns to scale and perfect international capital mobility. Private consumption is derived from a three-period overlapping generations specification. The source of productivity (growth) differentials in our model is the existence of a non-traded capital good (`human capital') whose augmentation requires a non-traded current input (time spent by the young in education rather than leisure). We consider the influence on productivity growth differentials of private thrift, public debt, the taxation of capital and savings and of policy towards human capital formation.
TL;DR: In this paper, the authors show that with two-sided altruism and an operative gift motive, human capital investment will be efficient under a subgame perfect equilibrium, but will remain inefficiently low under a Nash equilibrium.
Posted Content•