22/2004
December
Consumer Demand Composition, Human Capital and R&D Activity in Simple Model of Endogenous Growth
 
Roberto Censolo


Within a context of endogenous growth driven by the accumulation of human capital, we investigate the effect on the steady state distribution of skills of the allocation of total consumption between a traditional good and a composite commodity, whose variety dimension can be increased through R&D. Moreover, we introduce a transitional dynamic, through an external effect of education on individual's preferences: we assume that the accumulation of human capital shifts tastes toward a stronger liking for the "luxury" commodity. The resulting short run e ects of the changhing shares of income allocated between the two commodities are analized.

 
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