Alberto Bucci

R&D, imperfect competition and growth with human capital accumulation

This paper studies the long-run consequences of imperfect competition on growth and the sectoral distribution of skills within an R&D-based growth model with human capital accumulation. We find that steady-state growth is driven only by incentives to accumulate skills. In the model imperfect competition has a positive growth effect, while influencing the allocation of human capital to the different economic activities employing this factor input. Contrary to general wisdom, the share of resources invested in R&D turns out not to be monotonically increasing in the product market power and its correlation with the equilibrium output growth rate is not unambiguous.

Transitional Dynamics in the Solow-Swan Growth Model with AK Technology and Logistic Population Change

This paper offers an alternative way, based on the logistic population growth hypothesis, to produce transitional dynamics in the standard AK framework with an exogenous savings rate. In the model the growth rate of the aggregate stock of capital is independent of the evolution of population and always constant, whereas the growth rate of population, though independent of the law of motion of capital, varies over time. Hence, non monotonicity in the per-capita capital level and growth rate can be observed.

Horizontal innovation, market power and growth

I build a generalised model of horizontal product innovation and economic growth taking explicitly into account the most relevant insights stemming from the recent literature on this topic. What results from the analysis is that, when innovation is both deterministic and horizontal, the relationship between market power and aggregate growth is not robust at all. It is also found that not only technology, but also the inter-sectoral competition for the same resource affects growth. This is particularly relevant in terms of public policies aimed at the strategic allocation of skilled workers to the different sectors of the economy. [D43, L16, O31, O41]

On Scale Effects, Market Power and Growth when Human and Technological Capital are Complements

We build an expanding product variety endogenous growth model where both human capital and ideas are complements. One peculiarity of the economy under analysis is that in the sectors where both kinds of capital are accumulated no spillover effect does exist. Many insights arise from the model. Firstly, due to the complementarity hypothesis, multiple steady states emerge. Secondly, growth does not depend on the scale of the economy and turns out to be sensitive to the monopoly power enjoyed by local intermediate monopolists. Finally, when skilled labour and ideas are perfect complements, product market competition is unambiguously bad for growth.

Product Proliferation, Population, and Economic Growth

This paper reassesses the long-run relationship between population growth and economic growth in two different frameworks. In the first one, aggregate human capital evolves exogenously over time, while in the second, individuals choose endogenously their investment in education. When endogenous human capital investment takes place, the potential tension between the productivity gains (due to specialization) and the productivity losses (due to more production complexity) arising from an expansion in the number of intermediate-input varieties employed in the production of final goods is crucial in determining the sign of the correlation between population growth and per capita income growth.

Can Market Power Influence Employment, Wage Inequality and Growth?

We introduce an efficiency-wage mechanism into an innovation-driven growth model. Due to informational problems, the labour market is segmented and homogeneous workers may be employed either in a non-competitive intermediate sector or in a competitive research one. We analyse the impact that variations in the monopoly power of the intermediate firms may have on unemployment, wage inequality and growth. We find that the lower the product market competition in the intermediate sector, the higher the research employment, the lower the intermediate sector employment, the higher the aggregate growth rate. Growth and inequality are negatively correlated whereas growth and unemployment are positively correlated. The last two results are obtained through numerical simulations.

Human capital, product market power and economic growth

We build a generalised growth model of horizontal product innovation with human capital accumulation in which the monopolistic mark-up set in the uncompetitive sector and the degree of returns to specialization are disentangled. We find that product market power has a positive growth effect when durables are employed in the production of the homogeneous consumers good. Thus, in this case the model allows to replicate one of the main results of the neo-Schumpeterian growth theory within a framework where innovation is both horizontal and deterministic and economic growth is driven by private incentives to invest in education. We also find that not only the type of technology employed in the final output production, but also the intensity of the inter-sectoral competition for the same resource (human capital) affect both the steady state level of growth and the relationship between market power and economic development.

Smart endogenous growth: cultural capital and the creative use of skills

Purpose – Despite the growing literature aimed at explaining how cultural and artistic production feeds economic growth, the causal relationships and interplays are not investigated in depth. In the attempt of filling this gap, the purpose of this paper is to examine arts, culture, and education within the framework of the New Growth Theory. Design/methodology/approach – Starting from the analysis of how culture may be at the root of a specific engine of economic growth, the paper presents a theoretical endogenous growth model driven by the combination of the investments in human and cultural capital. Findings – The paper shows that cultural investment has a positive impact on economic growth and on the level of income provided that the economy is sufficiently “culture-intensive”, and that this effect is further magnified the more total factor productivity (TFP) is sensitive to the stock of cultural capital. Research limitations/implications – The paper figures out the possibility of a cultural poverty tr...

Population and Economic Growth Under Different Growth Engines

Abstract Using a growth model with physical capital accumulation, human capital investment and horizontal R&D activity, this paper proposes an alternative channel through which an increase in the population growth rate may yield a non-uniform (i.e., a positive, negative, or neutral) impact on the long-run growth rate of per-capita GDP, as available empirical evidence seems mostly to suggest. The proposed mechanism relies on the nature of the process of economic growth (whether it is fully or semi-endogenous), and the peculiar engine(s) driving economic growth (human capital investment, R&D activity, or both). The model also explains why in the long term the association between population growth and productivity growth may ultimately be negative when R&D is an engine of economic growth.

Population in Factor Accumulation-based Growth

This paper analyzes the conditions under which, within a two-sector endogenous growth model with human and physical capital accumulation but without R&D-driven disembodied technological progress, it is possible to observe an ambiguous effect of population growth on economic growth, as empirical evidence suggests. We present three models. In each of them the engine of long-run growth is human capital accumulation. Population growth exerts ambiguous effects on economic growth only when human and physical capital are complementary for each other in the production of new human capital. This result is explained in terms of the interplay between the “dilution” and “accumulation” effects. In accordance with the growth literature exhibiting endogenous human capital accumulation and R&D activity, we also find that income growth can be positive even with stable population, that both the growth rate and the level of per-capita income are independent of population size, and finally that the level of per-capita income is proportional to per-capita human capital. We conclude that it is possible to reach the same results even without explicitly assuming endogenous and purposeful investment in research by firms