Nikos Benos

Education policy, growth and welfare

The present paper studies the general equilibrium implications of two types of education policy in an overlapping generations model. We examine education transfers, which augment inherited private education spending, and public investment on economy‐wide human capital, which provides externalities to individual human capital accumulation. The government determines jointly the tax rate and the allocation of tax revenues among the two types of education policy. The optimal division of public spending between the education policy instruments and the associated tax rate depend on the elasticities of human capital accumulation with regard to education transfers and public investment on economy‐wide human capital.

The Role of Human Capital in Economic Growth: Evidence from Greek Regions

Institutional and Social Dynamics of Growth and Distribution presents a set of original contributions to the much-debated issues of long-run economic growth in relation to institutional and social progress.

INEQUALITY AND GROWTH IN THE UNITED STATES: WHY PHYSICAL AND HUMAN CAPITAL MATTER

We investigate the relationship between economic growth and top income inequality under the influence of human and physical capital accumulation, using an annual panel of U.S. state‐level data. Our analysis is based upon the “unified” framework offered by Galor and Moav (2004) while the empirics account for cross‐section dependence, parameter heterogeneity, and endogeneity, in nonstationary series. We conclude that changes in inequality do not influence growth, neither in the short run nor in the long run in the United States as a whole in the 1929–2013 period. Our findings are robust to the inclusion of overall income inequality measures. These findings provide support for the theoretical prediction of the unified theory of inequality and growth, according to which the growth effect of inequality becomes insignificant in the latest stages of economic development that the United States experiences during our period of investigation. Therefore, future policies aiming at moderating the concentration at the upper end of income distribution are not likely to have adverse growth consequences in developed countries such as the United States. (JEL I21, O47, C23)