LONG-RUN GROWTH AND HUMAN-CAPITAL

This paper analyses long-term growth in a closed economy with human as well as physical capital. The human capital corresponds to general ed ucation. Private utility maximization determines each child's schoolin g. Costs of educating a given individual are convex. Although self-sus taining growth is not possible, steady states with per capita output g rowing faster than the underlying rate of technological progress do em erge, and the magnitude of some comparative-static results in increase d. Section III attempts to pin down the degree of growth-rate amplific ation implied in practice, concluding with estimates of 30-50 per cent .