Misallocation and growth

Boyan Jovanovic

    Research output: Contribution to journalArticle

    Abstract

    This paper models growth via on-the-job learning when firms and workers are heterogeneous. It is an overlapping generations model in which young agents match with the old. More efficient assignments lead to faster long-run growth, more inequality, and less turnover in the distribution of human capital. Constant-growth paths are characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial human capital of the old generation is also log-normal. Growth and inequality move together on the transition to the balanced growth path.

    Original languageEnglish (US)
    Pages (from-to)1149-1171
    Number of pages23
    JournalAmerican Economic Review
    Volume104
    Issue number4
    DOIs
    StatePublished - 2014

    Fingerprint

    Human capital
    Misallocation
    Turnover
    Balanced growth path
    Overlapping generations model
    Growth model
    Cobb-Douglas
    Workers
    Functional form
    Transition dynamics
    Long-run growth
    Assignment

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Misallocation and growth. / Jovanovic, Boyan.

    In: American Economic Review, Vol. 104, No. 4, 2014, p. 1149-1171.

    Research output: Contribution to journalArticle

    Jovanovic, Boyan. / Misallocation and growth. In: American Economic Review. 2014 ; Vol. 104, No. 4. pp. 1149-1171.
    @article{1a2d51ede0af4085b298fb955071e536,
    title = "Misallocation and growth",
    abstract = "This paper models growth via on-the-job learning when firms and workers are heterogeneous. It is an overlapping generations model in which young agents match with the old. More efficient assignments lead to faster long-run growth, more inequality, and less turnover in the distribution of human capital. Constant-growth paths are characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial human capital of the old generation is also log-normal. Growth and inequality move together on the transition to the balanced growth path.",
    author = "Boyan Jovanovic",
    year = "2014",
    doi = "10.1257/aer.104.4.1149",
    language = "English (US)",
    volume = "104",
    pages = "1149--1171",
    journal = "American Economic Review",
    issn = "0002-8282",
    publisher = "American Economic Association",
    number = "4",

    }

    TY - JOUR

    T1 - Misallocation and growth

    AU - Jovanovic, Boyan

    PY - 2014

    Y1 - 2014

    N2 - This paper models growth via on-the-job learning when firms and workers are heterogeneous. It is an overlapping generations model in which young agents match with the old. More efficient assignments lead to faster long-run growth, more inequality, and less turnover in the distribution of human capital. Constant-growth paths are characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial human capital of the old generation is also log-normal. Growth and inequality move together on the transition to the balanced growth path.

    AB - This paper models growth via on-the-job learning when firms and workers are heterogeneous. It is an overlapping generations model in which young agents match with the old. More efficient assignments lead to faster long-run growth, more inequality, and less turnover in the distribution of human capital. Constant-growth paths are characterized for general functional forms and then, for the Cobb-Douglas case, the transition dynamics are solved analytically when the skill of the young is log-normally distributed and the initial human capital of the old generation is also log-normal. Growth and inequality move together on the transition to the balanced growth path.

    UR - http://www.scopus.com/inward/record.url?scp=84898634367&partnerID=8YFLogxK

    UR - http://www.scopus.com/inward/citedby.url?scp=84898634367&partnerID=8YFLogxK

    U2 - 10.1257/aer.104.4.1149

    DO - 10.1257/aer.104.4.1149

    M3 - Article

    VL - 104

    SP - 1149

    EP - 1171

    JO - American Economic Review

    JF - American Economic Review

    SN - 0002-8282

    IS - 4

    ER -