Human Capital, Technological Progress And Economic Growth

At present, it’s very difficult to explain the difference of the world economic growthusing Solow-model as the representative of the new classical theory of economic growthin the study of economic growth.The long-term growth rate of output per capita shouldbe equal to the growth rate of technology. But technology is the use of non-exclusive,each country can get it almost at the same time, even through receive it by payment.Therefore the long-term growth rate of output per capita of many countries is generallythe same or similar. However, it is obviously that this deduction is not accord with thereality. That is to say it is not reasonable to use technological progress to explaineconomic growth.Solow-model is also realized technology progress plays an important role ineconomic growth,but it simply takes it as exogenous variable. There is many factorswhich is difficult to explain in Solow’s surplus. Therefore, the later rise of new economicgrowth theorists focus on the endogenous conduction of technology progress.Forexample,Arrow’s learning by doing model(1962), Romer’s knowledge accumulationmodel(1986), Lucas’s human capital overflow model (1988). They all solve theendogenous problems of technology effectively.They give up the hypothesis of constantreturns to scale and get more significant conclusions. In the1960s, the representative ofthe economists such as T. W.Schultz and G. S. Becker who created the theory of humancapital.It. provides more thinking space for new economic growth theory.The model of Learning by doing and R&D is considered to the effective formwhich make technology progress endogenously. Human capital is the main opuses ofintellectual products which is a kind of input key introduced into the productionfunction.In essence,it is also a kind of endogenous conduction with technology. Theincreasing returns to scale of human capital keep a long-term economic growth in thelack of technological progress. At present，the domestic and foreign economists mainlyresearch endogenous economic growth along the two lines：the first is how to deal withthe endogenous problems of technology; the second is to study human capitalaccumulation how to promote economic growth which all lack the research of therelationship between technological progress and human capital accumulation and theconditions for economic growth.In fact, whether new classical theories of economic growth or new economic growth theory all think that technological progress is the sourceto economic growth. As the same time, the empirical research of most scholars showsthat human capital is also one of the important factors to promote economic growth.Therefore, we considerate human capital accumulation, technological progress andother factors comprehensivly and analyse the relationship between them and economicgrowth from the theory and empirical for the future.The article mainly includes fourparts.The first part (that is the second chapter) mainly analyzes the two main researchthinking of the new economical growth theory.That is the theory of endogenous growthbased on technology advancement and human capital accumulation. At the same time,weanalysis the defects and shortcomings of the two thinking which can provide the theorysupport and the research direction for the second part.The second part (that is the third chapter) that analysis mainly along the researchthinking of the first part.We establish three production departments which based on thetheory of knowledge production model that proposed by Romer.It includes production,research and development,human capital department. It can deal endogenously withtechnological progress and human capital accumulation meanwhile.The model assumesthat the production department of the human capital provides human capital for theother two departments, research and development department provides knowledge forproduction department.It also assumes that the production department of knowledge isincreasing returns to scale.We can determine the relationship among the long-termtechnical growth rate,human capital growth rate and economic growth under theconditions of the consumers’ long-term utility maximization.We got the conclusion thattechnology progress can promote economic growth which is the same with the neweconomic growth theory. However, whether human capital accumulation can promotetechnological progress and economic growth or not, is not a necessity in theory.There arecertain constraints that is in line with the reality of human capital accumulation andeconomic growth of each county.For example, Temple (1990) pointed out that theincreasing education investment not only decrease economic growth but also cause therate of unemployment highly and labour reward down in South Korea before1960. So itis the key problem to verify the above conclusion with the empirical perspective.The third part is the empirical part(Includes4,5,6chapters). Many scholars oftentake R&D capital investment, foreign direct investment and so on as a a form oftechnology progress When they study technology progress and economic growth. So we also use the similar method which take R&D capital investment, foreign directinvestment and human capital elements into economic growth equation for empiricalanalysis. Therefore, we introduce R&D capital into MRW model which we can studymaterial capital, R&D capital, human capital on the effect of economic growth andreseach the relationship among the three though empirical anlysis in chapter4.Becausedirect foreign investment has certain technology spillover effect, most scholars think itconnect with the level of human capital stock.We will study the condition of humancapital and foreign direct investment promoting economic growth and foreign directinvestment spillover effect through empirical analysis in chapter5. When we reseach therelationship among human capital,technology progress and economic growth, we alsoconsider whether there is crowding-out effect between human capital and materialcapital.As the same time,we also think if crowding-out effect can affect economicgrowth. Although many scholars thinks that human capital have crowding-out effect tomaterial capital through theoretical research,they reaseach it using the related substitutionindex in the empirical research which will have certain effect on conclusion. Therefore,we use estimate of human capital data to research it and hope to make up this deficiencyin chapter6.The fourth part is the conclusions and outlook of the paper. We put forward someideas and policy suggestions of economic development of China which use the theoryand empirical analysis results of the previous paper. We also hope that we can providecertain theoretical support and research foundation for our country’s human capital,technical progress and economic growth in the fields of the macro policies.