Human Capital, Wealth, and Renewable Resources

This paper studies dynamic interdependence among physical capital, resource and human capital. We integrate the Solow one-sector growth, Uzawa-Lucas two-sector and some neoclassical growth models with renewable resource models. The economic system consists of the households, production sector, resource sector and education sector. We take account of three ways of improving human capital: Arrow’s learning by producing (Arrow, 1962), Uzawa’s learning by education (Uzawa, 1965), and Zhang’s learning by consuming (Zhang, 2007). The model describes a dynamic interdependence among wealth accumulation, human capital accumulation, resource change, and division of labor under perfect competition. We simulate the model to demonstrate existence of equilibrium points and motion of the dynamic system. We also examine effects of changes in the productivity of the resource sector, the utilization efficiency of human capital, the propensity to receive education, and the propensity to save upon dynamic paths of the system.
JEL Classification O41, I25, Q2
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© 2014 The Author. Published by Sprint Investify. ISSN 2359-7712. This article is licensed under a Creative Commons Attribution 4.0 International License. Creative Commons License
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Wei-Bin Zhang, Ritsumeikan Asia Pacific University, 1-1 Jumonjibaru, Beppu-Shi, Oita-ken, 874-8577 Japan
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