Dynamics in a non-scale R&D growth model with human capital: Explaining the Japanese and South Korean development experiences

This paper constructs an R&D non-scale growth model that includes endogenous human capital. The goal is to take the model's implications to the data once the complementarity between technology and human capital, commonly found in the empirical literature, is taken into account. Our model suggests that intersectoral labor movements induced by the complementarity between human capital and technology can be a key factor in replicating and explaining development experiences such as those of Japan and South Korea. In particular, it is shown that the adjustment paths of output growth, investment rates, interest rates, and labor shares implied by the proposed model are consistent with empirical evidence.