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Discussion Papers In Economics And Business. 2019, 19-07, p. 1-33

Educational funds and economic growth : private versus public funds

Okada, Kohei

Graduate School of Economics, Osaka University

英語

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2019-05

http://www2.econ.osaka-u.ac.jp/econ_society/dp/1907.pdf

This study constructs an overlapping generations model in order to examine the relationship between education and R&D activities. Using this model, we analyze the effect of individuals' borrowing of educational funds on economic growth. We first consider the benchmark case in which individuals borrow educational funds at a market interest rate. We next consider that individuals borrow educational funds from a government at a constant rate of interest. If the policy interest rate is too low, the number of skilled workers increases, but economic growth is not achieved in the long run, because an increase in the demand for educational funds owing to the low policy interest rate crowds out funds for R&D investment and hinders economic growth. In addition, this study examines welfare and intergenerational inequality. When the government lowers the policy interest rate, the current generation's welfare level increases. However, future generations' welfare levels will decrease. This study shows that the government faces a trade-off between the current generation's welfare and future generations' welfare.

72070

Educational funds and economic growth : private versus public funds

Okada, Kohei

Graduate School of Economics, Osaka University

英語

2019-05

Discussion Papers In Economics And Business

19-07

1

33

https://hdl.handle.net/11094/72070

http://www2.econ.osaka-u.ac.jp/econ_society/dp/1907.pdf