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Volume 5, No. 3,
December
2006
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A Note on the Inclusion of Human Capital
in the Lucas Model
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Bidisha
Chakraborty*
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Vijaygarh Jotish Ray College, India
and
Economic Research Unit, Indian Statistical Institute,
India
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Manash Ranjan
Gupta
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Economic Research Unit, Indian
Statistical Institute, India
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Abstract
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We include human
capital in the utility function in an otherwise
standard Lucas (1988) model of endogenous growth and
show that there may be multiple steady-state
equilibria. We also analyze the transitional dynamic
properties of this model.
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Key words
:
human capital; endogenous growth; multiple steady-state
equilibria; saddle path
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JEL classification
:
C62;
J24; O41
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