G. Feichtinger, A. Novak, F. Wirl:
"Institutional change, education and population growth: lessons from dynamic modelling";
Research Reports (Vienna University of Technology, Institute of Statistics and Mathematical Methods in Economics, Operations Research and Control Systems), 2020-14 (2020), 14; 24 S.

Kurzfassung englisch:
This is one of thefirst papers that links population growth, education and institutional change within a dynamic optimization.The basic premise is, following interesting papers of Boucekkinewith different coauthors dealing withthe Arab Spring, that elites manage first the ruling and then the transition to a `democratic´government. We are less optimistic concerning the economic efficiency of domestic resource use and, more important, extend this framework by accounting for (endogenous) population growth.These extensions render the survival of any elite much less feasible than without population growth. Only a (cynical) elite worrying about the size of the population allows for a long run and interior outcome. Therefore, the rulers and the elite have to account for a second phase in which they lose control over a country´s (financial) resources. If the elite lacks sufficient stakes in the secondphase, it will `take the money and run´, i.e., no investment, at least close to the (endogenous) terminal time.

Elites, two stage optimization, population growth, lack of longrun interior solutions

Elektronische Version der Publikation:

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