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Growth and Human Capital: A Network Approach

Accepted version
Peer-reviewed

Repository DOI


Type

Article

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Authors

Cavalcanti, TVV 
Giannitsarou, Chryssi  ORCID logo  https://orcid.org/0000-0002-1488-2433

Abstract

We study the interactions of human capital, growth and inequality by embedding networks into an endogenous growth model with overlapping generations. Human capital depends on investment in education and the average human capital of a household's neighborhood. High network cohesion leads to long run equality, while for low network cohesion inequality is high and persists more often. During transition, high overall growth is achieved when the network has high degree centralization, and high individual growth is achieved when the household has low human capital relative to its neighborhood and is located in a neighborhood with high average human capital.

Description

Keywords

human capital, growth, inequality, local externality, networks

Journal Title

Economic Journal

Conference Name

Journal ISSN

0013-0133
1468-0297

Volume Title

127

Publisher

Oxford University Press (OUP)
Sponsorship
Part of this paper was completed during Chryssi Giannitsarou’s visit to the Federal Reserve Bank of Minneapolis – she is grateful for their hospitality.