This paper analyzes the effects of time-consistent capital taxation on the level of capital and welfare. We find that a commitment to a zero capital tax shifts the time inconsistency problem towards labor taxes and the provision of public consumption. By comparing the worst timeconsistent policies with and without a commitment to zero capital taxes, we find that the mere existence of a capital ...

In this note, we investigate how the depreciation of a manufactured stock and the related accumulation of a waste stock can alter the optimal path of the capital-resource economy. It is shown that the optimal consumption path is affected by how the disuse pattern of the manufactured stock in question is distributed, specifically with forward-looking terms.

The Social Security program is almost certain to have a major influence on the Nation’s rate of capital accumulation. For most Americans, Social Security is the primary form of saving for retirement. As such, the high and increasing level of Social Security benefits can markedly reduce personal saving and private capital accumulation; the evidence reviewed below suggests that this does in fact ...

This paper shows how the degree of credit-market imperfections affects the steady-state distributions of income and wealth, human capital investment, and the pattern of comparative advantage. The impact of trade liberalization on the accumulation of human capital depends on how it affects (1) the incentives to accumulate human capital, (2) the borrowing constraints facing human capital accumula...

Extending the wealth accumulation model of Piketty and Zucman [2014] to include net depreciation in fossil fuels, minerals, and forests produces two key indicators: the net national saving rate adjusted for natural capital depreciation, and the ratio of this rate to long-run growth. These indicators are applied to eight rich economies over 1970–2013 and developing countries for 1979–2013. Where...

Human capital, in the form of embodied knowledge or skills, is under threat of automation. To examine the effect of it on a macroeconomy, I develop the Uzawa-Lucas model in which the accumulation of human capital follows the stochastic process. With two equality constraints, the closed-form solution gets obtainable. It shows that increase in uncertainty about the human capital accumulation redu...

Alvarez and Jermann (2000) show that the constrained efficient allocations of endowment economies with complete markets and limited commitment can be decentralized with endogenous borrowing limits on the Arrow securities. In a model with capital accumulation, aggregate risk and competitive intermediaries, we show that such a decentralization is not possible unless one imposes an upper limit on ...

The Impact of Demographic Change on Human Capital Accumulation This paper investigates whether and to what extent demographic change has an impact on human capital accumulation. The effect of the relative cohort size on educational attainment of young adults in Germany is analyzed utilizing data from the German Socio-Economic Panel for West-German individuals of the birth cohorts 1966 to 1986. ...

This paper demonstrates that considering alternative means of human capital accumulation, such as learning-by-doing, overturns the presumption that formal education is unconditionally bene ̄cial for economic growth. It analyzes a model in which the average level of human capital creates externalities in future human capital accumulation and individuals can augment their human capital with work e...

Article history: Received 18 November 2011 Received in revised form 16 June 2012 Accepted 16 July 2012 Available online 21 July 2012 This paper analyzes the effect of health investment, and hence of health capital, on physical capital accumulation and long-run economic growth in an extended Ramsey model with an Arrow– Romer production function and a Grossman (1972) utility function. The paper c...