Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/198963 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7603
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
To better understand the quantitative implications of human capital externalities at the aggregate level, we estimate a two-sector endogenous growth model with knowledge spill-overs. To achieve this, we account for trend growth in a model consistent fashion and employ a Markov-chain Monte-Carlo (MCMC) algorithm to estimate the model's posterior parameter distributions. Using U.S. quarterly data from 1964-2017, we find significant positive externalities to aggregate human capital. Our analysis further shows that eliminating this market failure leads to sizeable increases in education-time, endogenous growth and aggregate welfare.
Subjects: 
human capital externalities
endogenous growth
Bayesian estimation
JEL: 
C11
C52
E32
Document Type: 
Working Paper
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