Estimated human capital externalities in an endogenous growth framework
The ESRI organises a public seminar series, inviting researchers from both the ESRI and other institutions to present new research on a variety of public policy issues. The seminar series provides access to specialised knowledge and new research methodologies, with the objective of promoting research excellence and facilitating productive dialogue across the policy and research fields.
Guest speaker: Jim Malley, Professor of Economics, University of Glasgow
Seminar topic: To better understand the quantitative implications of human capital externalities at the aggregate level, we estimate a two-sector endogenous growth model with knowledge spill-overs. To achieve this, we account for trend growth in a model consistent fashion and employ a Markov-chain Monte-Carlo (MCMC) algorithm to estimate the model's posterior parameter distributions. Using U.S. quarterly data from 1950-2017, we find significant positive externalities to aggregate human capital. Our analysis further shows that eliminating this market failure leads to sizeable increases in education-time, endogenous growth and aggregate welfare.
Speaker bio: Jim Malley is a Professor of Economics in the Department of Economics at the University of Glasgow. Previously, he was a faculty member at the University of Stirling and an economic analyst with the U.S. Federal Government. His research interests include business cycles and growth, fiscal policy, productivity and inequality. Publications include papers in the Review of Economics and Statistics, European Economic Review, Journal of Economic Dynamics and Control, Scandinavian Journal of Economics, Oxford Economic Papers, Journal of Human Capital, Macroeconomic Dynamics, Canadian Journal of Economics, and Economica.