Real business cycles with a human capital investment sector and endogenous growth: persistence, volatility and labor puzzles

Dang, Jing, Gillman, Max and Kejak, Michal 2011. Real business cycles with a human capital investment sector and endogenous growth: persistence, volatility and labor puzzles. [Working Paper]. Institute of Economics, Hungarian Academy of Sciences. Available at: http://econpapers.repec.org/paper/hasdiscpr/1128.h...

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Abstract

An identical two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raise the relative price of human capital investment so as to favor it over goods production. Modified by having the household sector produce human capital investment sector, the RBC model follows the international approach of Maffezzoli (2000) and so adds a second sector relative to Jones et al. (2005). This captures key major US RBC data: output growth persistence, with hump-shaped impulse responses; hump-shaped physical capital investment impulse responses; Gali's (1999) negative impulse response of labour supply; and hours volatility.

Item Type:	Monograph (Working Paper)
Status:	Published
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Uncontrolled Keywords:	real business cycle; human capital; endogenous growth
Additional Information:	IEHAS Discussion Papers 1128
Publisher:	Institute of Economics, Hungarian Academy of Sciences
Last Modified:	19 Mar 2016 22:58
URI:	https://orca.cardiff.ac.uk/id/eprint/33729

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