1. bookVolume 13 (2022): Edition 1 (July 2022)
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Human Capital and Economic Growth in Romania: A Vector Error Correction Model (VECM)

Publié en ligne: 28 Jun 2022
Volume & Edition: Volume 13 (2022) - Edition 1 (July 2022)
Pages: 110 - 124
Reçu: 01 Dec 2021
Accepté: 01 Apr 2022
Détails du magazine
License
Format
Magazine
eISSN
2067-9785
Première parution
06 Mar 2017
Périodicité
3 fois par an
Langues
Anglais
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

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