KNOWLEDGE SPILLOVER, LEARNING INCENTIVES AND ECONOMIC GROWTH

Knowledge spillover implies that the social value of knowledge is higher than its private value and leads to insufficient private investment in human capital. This paper examines implications for economic growth and offers a remedy. An incentive mechanism that implements the socially optimal outcome is offered based on learning subsidy and flat income or consumption taxes (each levied at a different phase of the growth process). The scheme is self-financed in that the tax proceeds cover exactly the subsidy payments at each point of time.


Issue Date:
2004
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/14991
Total Pages:
49
JEL Codes:
C61; H21; O33; O38; O41
Series Statement:
Discussion Paper 7.04




 Record created 2017-04-01, last modified 2017-08-23

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