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Title: Education, neighbourhood effects and growth: an agent based model approach
Author: Araújo, Tanya
St. Aubyn, Miguel
Keywords: agent modelling
economic growth
human capital
neighbourhood effects
poverty trap
Issue Date: 2005
Publisher: ISEG – Departamento de Economia
Citation: Araújo, Tanya e Miguel St. Aubyn. 2005. "Education, neighbourhood effects and growth: an agent based model approach". Instituto Superior de Economia e Gestão - DE Working papers nº 10-2005/DE/UECE
Series/Report no.: DE Working papers;nº 10-2005/DE/UECE
Abstract: Endogenous, ideas-led, growth theory and agent based modelling with neighbourhood effects literature are crossed. In an economic overlapping generations framework, it is shown how social interactions and neighbourhood effects are of vital importance in the endogenous determination of the long run number of skilled workers and therefore of the growth prospects of an economy. Neighbourhood effects interact with the initial distribution of educated agents across space and play a key role in the long run stabilisation of the number of educated individuals. Our model implies a tendency towards segregation, with a possibly positive influence on growth, if team effects operate. The long run growth rate is also shown to depend on the rate of time preference. Initial circumstances are of vital importance for long run outcomes. A poor initial education endowment will imply a long run reduced number of skilled workers and a mediocre growth rate, so there no economic convergence tendency. On the contrary, poor societies will grow less, or will even fall into a poverty trap, and will diverge continuously from richer ones.
ISSN: 0874-4548
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Appears in Collections:DE - Documentos de trabalho / Working Papers
UECE - Documentos de Trabalho / UECE - Working Papers

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