<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This paper aims to evaluate the human capital on economic growth impact in Romania. Variables have been selected according to an endogenous growth model basing on including the human capital in the Cobb-Douglas production function (Lucas, 1988). As all over usual, here gross domestic product (GDP) will be the endogenous of gross fixed capital formation (GFCF, as physical capital stock), employment (as labour), life expectancy and secondary enrolment rate(as proxies for human capital). We also use expenditure in research and development (R&amp;D) sector (as its percentage in GDP), as control variable. Once our model developed, variables are found as integrated of order one (1) and co-integrated, here allowing a vector error correction model (VECM) for estimation. This will be a system of six equations covering a 25 years (1995-2019) interval for Romania. A long-term relation comes out of our empirical findings, as similarly to Wang (2016), so the GDP growth sees itself determined by: secondary school enrolment, life expectancy(i.e. for human capital), R&amp;D expenditure and labour. Short run causalities have not been found significant for this model</p>
</abstract>

This paper aims to evaluate the human capital on economic growth impact in Romania. Variables have been selected according to an endogenous growth model basing on including the human capital in the Cobb-Douglas production function (Lucas, 1988). As all over usual, here gross domestic product (GDP) will be the endogenous of gross fixed capital formation (GFCF, as physical capital stock), employment (as labour), life expectancy and secondary enrolment rate(as proxies for human capital). We also use expenditure in research and development (R&D) sector (as its percentage in GDP), as control variable. Once our model developed, variables are found as integrated of order one (1) and co-integrated, here allowing a vector error correction model (VECM) for estimation. This will be a system of six equations covering a 25 years (1995-2019) interval for Romania. A long-term relation comes out of our empirical findings, as similarly to Wang (2016), so the GDP growth sees itself determined by: secondary school enrolment, life expectancy(i.e. for human capital), R&D expenditure and labour. Short run causalities have not been found significant for this model

Human Capital and Economic Growth in Romania: A Vector Error Correction Model (VECM)

HOLISTICA – Journal of Business and Public Administration

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

This paper aims to evaluate the human capital on economic growth impact in Romania. Variables have been selected according to an endogenous growth model basing...

Human Capital and Economic Growth in Romania: A Vector Error Correction Model (VECM)

Published Online: Jun 28, 2022

Page range: 110 - 124

Received: Dec 01, 2021

Accepted: Apr 01, 2022

DOI: https://doi.org/10.2478/hjbpa-2022-0007

Keywords
human capital, economic growth, Cobb-Douglas production function, vector error correction model (VECM)

© 2022 Dalina-Maria Andrei, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Human Capital and Economic Growth in Romania: A Vector Error Correction Model (VECM)

Published Online: Jun 28, 2022

Page range: 110 - 124

Received: Dec 01, 2021

Accepted: Apr 01, 2022

DOI: https://doi.org/10.2478/hjbpa-2022-0007

Keywordshuman capital, economic growth, Cobb-Douglas production function, vector error correction model (VECM)

© 2022 Dalina-Maria Andrei, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
human capital, economic growth, Cobb-Douglas production function, vector error correction model (VECM)