Redding, Stephen (1996) The low-skill, low-quality trap: strategic complementarities between human capital and R & D. Economic journal, 106 (435). pp. 458-470. ISSN 0013-0133
Abstract
This paper investigates the relationship between investments in human capital and R & D in a model of endogenous growth. Both forms of investment exhibit pecuniary externalities and are, as a result strategic complements. Multiple equilibria may occur for intermediate parameter values, and the present analysis may be seen as providing a theoretical rationalisation for the idea that an economy may become trapped in a 'low-skills' equilibrium, characterised by a poorly trained workforce and low product quality. In the presence of multiple equilibria, there may be a welfare-improving role for government policy in co-ordinating expectations.
| Item Type: | Article |
|---|---|
| Official URL: | http://www.blackwell-synergy.com/loi/ecoj |
| Additional Information: | © 1996 Royal Economic Society |
| Library of Congress subject classification: | H Social Sciences > HB Economic Theory |
| Sets: | Collections > Economists Online Research centres and groups > Centre for Economic Performance (CEP) Departments > Economics |
| Rights: | http://www.lse.ac.uk/library/rights/LSERO.htm |
| URL: | http://eprints.lse.ac.uk/4106/ |
Actions (login required)
 |
Record administration - authorised staff only |
