Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/83412 
Year of Publication: 
2008
Series/Report no.: 
IES Working Paper No. 14/2008
Publisher: 
Charles University in Prague, Institute of Economic Studies (IES), Prague
Abstract: 
Endogenous time discounting is introduced in a two-period human-capital-driven growth model: subjective discount rate depends upon the level of human capital. This assumption accords strongly with the micro-level evidence. In the model an individual optimizes consumption over two periods. Low human capital societies do not grow fast since high discount rate discourages schooling as the major form of savings. This implication is further reinforced by modeling the efficiency of schooling in the context of population pressure which is also driven by low human capital. The model may produce multiple development regimes and it illustrates wider role of education in tackling possible development traps.
Subjects: 
growth
human capital
education
time discounting
discount rate
poverty
JEL: 
D9
I2
O1
Document Type: 
Working Paper

Files in This Item:
File
Size
289.42 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.