Relative risk aversion and the demand for assets in continuous time, when a safe asset is present

SIGLEGBUnited Kingdo

The degree of asset substitutability and the asymptotic properties of exchange rate regimes

SIGLEGBUnited Kingdo

Some new evidence of a risk premium in the determination of the U.S. dollar vis-a-vis the currencies of the other G-5 members

SIGLEAvailable from British Library Document Supply Centre-DSC:4335.954(205) / BLDSC - British Library Document Supply CentreGBUnited Kingdo

The importance of cognitive skills in macroeconomic models of growth and development

In a highly influential and thought provoking study, Hanushek, E.A., and Woessmann, L., (NBER Working Paper No.14633, 2009) provide evidence in favor of a strong causal effect of cognitive skills on growth. To quote: “… the simple premise that improving the schools can produce benefits in national growth rates is strongly supported”. Whilst we concur with this premise, we are rather sceptical whether the Mincerian approach followed by Hanushek and Woessmann (op.cit.) can sufficiently account for the contribution of cognitive skills on national growth rates. To further explore the importance of cognitive skills on growth and development we revisit macroeconomic models where cognitive skills are the key determinant of the path of human capital and its rate of accumulation. Our empirical results strongly support the workings of a “learning-by-doing” hypothesis where cognitive skills together with physical capital determine the paths of human capital, of output per worker, and growth