THE EVOLUTION OF HUMAN-CAPITAL IN AN INTERACTING AGENT ECONOMY

We consider a dynamic spatial model of human capital accumulation in t he presence of local spillovers in learning. Our results provide condi tions under which homogeneous and heterogeneous steady states exist an d are locally stable. Our model also considers the impact of 'role mod els' and 'mentors' and indicates when they can have a positive or nega tive impact upon the steady-state human capital levels. We also show t hat, in some circumstances, the dynamics of human capital accumulation can be chaotic. (C) 1998 Elsevier Science B.V. All rights reserved.