Stabilization Policy, Learning-by-Doing, and Economic Growth.
This paper shows that fiscal policy, when used for stabilization purposes, can have a positive effect on the economy's growth, on human capital accumulation, and on welfare. The authors introduce stochastic productivity shocks into a model in which productivity is augmented through learning-by-doing. If future benefits of learning-by-doing are not fully internalized by workers, then recessions are periods in which opportunities for acquiring experience are foregone. The authors identify configurations of disturbances and other parameters for which a countercyclical policy maximizes growth and welfare. Copyright 1997 by Royal Economic Society.
Year of publication: |
1997
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Authors: | Martin, Philippe ; Rogers, Carol Ann |
Published in: |
Oxford Economic Papers. - Oxford University Press. - Vol. 49.1997, 2, p. 152-66
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Publisher: |
Oxford University Press |
Saved in:
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