Open AccessPHASES OF ECONOMIC DEVELOPMENT IN AN ENDOGENOUS GROWTH MODEL WITH INNOVATION AND EDUCATION
Author(s) -
Ibtissem Aribi,
Lobna Ben Hassen
Publication year - 2021
Publication title -
oradea journal of business and economics
Language(s) - English
Resource type - Journals
eISSN - 2501-3599
pISSN - 2501-1596
DOI - 10.47535/1991ojbe131
Subject(s) - endogenous growth theory , human capital , capital deepening , economics , physical capital , poverty trap , capital (architecture) , poverty , sustainable development , sustainable growth rate , variety (cybernetics) , economic system , growth model , financial capital , macroeconomics , economic growth , capital formation , finance , biology , ecology , archaeology , artificial intelligence , computer science , history
This paper analyzes the transitional dynamics of an endogenous growth model with physical capital, human capital and R&D in which both human capital and innovation drives long run growth. The model suggests that the developing economy follows different stages of development. The first phase is characterized by physical capital accumulation. At the second stage, human capital accumulation represents the main engine of long run growth. The third phase is identified by an increasing variety of intermediate good originating from innovation. However, innovation is not assured for poor economies. In this case, permanent support for innovation can lead a sustainable exit from poverty trap.