MODELING THE ECONOMIC GROWTH IN ROMANIA. THE ROLE OF HUMAN CAPITAL

Abstract

We simulate possible growth paths assuming that the Romanian economy behaves according to the hypothesis of the Uzawa-Lucas model. By calibrating the model to the Romanian economy, we are able to forecast the evolution of the Romanian GDP and the proportion of human capital which will be used in the production of goods and services. Although the population growth rate is considered to be zero, the average real GDP growth rate is around 6% due to the human capital accumulation, which improves the quality of labor.endogenous economic growth, human capital, two-sector economy, path simulation, Uzawa-Lucas model