A real-business-cycle model with human capital accumulation: lessons for Bulgaria (1999-2018)

Vasilev, Aleksandar (2021) A real-business-cycle model with human capital accumulation: lessons for Bulgaria (1999-2018). Macroeconomics and Finance in Emerging Market Economies . pp. 1-15. ISSN 1752-0843

Full content URL: https://doi.org/10.1080/17520843.2021.1937259

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A real-business-cycle model with human capital accumulation: lessons for Bulgaria (1999-2018)
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Abstract

We introduce human capital accumulation into a real-business-cycle setup. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2018). We investigate the quantitative importance of the presence of skill acquisition for cyclical fluctuations in Bulgaria. After subjecting the model to a battery of tests, we find the quantitative effect of such a channel – aside from producing a moderate increase in the variability of hours – to be relatively small. In other words, government spending on education turns out to be an ineffective instrument when it comes to smoothing the cycle.

Keywords:business cycles, human capital, Bulgaria
Subjects:L Social studies > L130 Macroeconomics
Divisions:Lincoln International Business School
ID Code:46874
Deposited On:11 Oct 2021 13:24

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