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 language | English (US) |
|---|---|
| Pages (from-to) | 1149-1171 |
| Number of pages | 23 |
| Journal | American Economic Review |
| Volume | 104 |
| Issue number | 4 |
| DOIs | |
| State | Published - 2014 |
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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 journal › Article
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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 -