International Conference «Mathematical and Informational Technologies, MIT-2011»
(IX Conference «Computational and Informational Technologies for Science,
Engineering and Education»)

Vrnjacka Banja, Serbia, August, 27–31, 2011

Budva, Montenegro, August, 31 – September, 5, 2011

Mateljevic M.   Albijanic M.  

Mathematic model of economic growth: influence of human capital and technology

Reporter: Albijanic M.

Robert Solow, winner of Nobel Price, has created model of economic growth. In addition, winner ` s of Nobel Price, Lucas and Phelps have shown how investments into human capital and technologies contribute to economic growth. Mankiw, Romer and Weil emphasize that different levels of human capital, as to differences in education between countries are partially responsible for difference in GDP in those countries.
This Study clarifies mathematical model and role of human capital and technology. Higher savings rate leads to higher income, which in turn leads to higher level of technology and human capital. Thus saving raises the total factor productivity. With Lucas `s optimal choice between work and education, we obtain additional factor of human capital. Even stronger conclusion follows upon considering the generations overlapping. If previous generations had insufficient investment in education, the current generation is discouraged to invest in education and new skills, and this situation does not positively reflect on economic growth.

Abstracts file: prijava MIT(1).doc

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