Abstract
In recent years, many economists point out that physical capital stock and human capital stock cannot identify the difference of income effectively. Therefore, they attempt to add more interpreted variables, trying to illustrate economic growth that physical capital and human capital cannot explain. In general, economic growth theory has been applied to cross-country studies, and empirical researches of single country are limited. The main reason is that one cannot know how to measure the physical capital stock between states of a country efficiently. According to the method of Garofalo and Yamarik (2002), one can estimate the physical capital stocks of each state of the United States and justify the validity of Solow growth model. This paper specifically focuses on the so called new economy era (1990-2000). Our primary goal is to expand the existing models into more comprehensive one by including more explanatory variables.
In 1999, The Nobelist -Grossman- released the concept of health capital ¡§One can choose the length of life¡¨. Each will be endowed initial value of health stock which depreciates through time and appreciates through the self-investment, exercising, for example. Health capital is also a kind of element of human capital; it will help human capital work normally. For this reason, we consider to measure U.S. output not only consider the effects of accumulation of physical capital and human capital, but also contains contributions of health capital.
To analyze economic implications in three models from this study, there are several remarks can be drown¡G
Firstly, physical capital and human capital provide significantly positive effect for economic growth rates of U.S. states from 1990 to 2000. The magnitude of estimated coefficient of physical capital has been decreasing, which denotes two phenomenons. In the one hand, physical capitals positively contribute the US economic growth. On the other hand, its influence to economic growth has marginally decreased over time. In contrast to physical capitals, human capital has shown constantly increasing influence to the US economic growth.
Secondly, after adding the variable of health capital, the model can account the large scale of variation of the U.S. economic growth. The reason is that agents in the economy add their own length of life in the model and, then defer retirement and extend their productivities to economic growth.
Thirdly, although term of is a random variable of cross states in the model; despite of technology stock, it comprises different endowment of resource, geographical location and institution etc. Therefore, it displays individual characteristics of every state. Hence, economic growth will reveal significant and positive beneficial result when we can think about more component of (for instant, adding political party variables) to improve and develop it.
Lastly, we have low adjusted in this paper, and maybe because we focus on long-run output, and do not look upon puzzle of short-run business cycle. Romer (1987) denotes that short-run business cycle of economic variables dominates change of some variables for contributing long-run economic growth that will make estimation to convert nefficiently.
Synthesizing the above mentioned consequences, one can find that U.S. impressed economic performance from 1990 to 2000. Not only contribute physical capital and human capital to the economy, health capital is another key element to maintain such sustained economic growth. Consequently, we suggest that if a nation pays more attention to health capital, which will result in economic growth and increase competitiveness for the nation. The results of this paper using the US as a sample may can serve as a reference to other countries using as a example to improve economic growth in the future.
| Identifer | oai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0624105-143905 |
| Date | 24 June 2005 |
| Creators | Chen, I-Hung |
| Contributors | Yung-Hsiang Ying, Jia-Hsi Weng, Ming-Jang Weng |
| Publisher | NSYSU |
| Source Sets | NSYSU Electronic Thesis and Dissertation Archive |
| Language | Cholon |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | http://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0624105-143905 |
| Rights | unrestricted, Copyright information available at source archive |
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