The Stages of Human Capital and Economic Growth: Does the Direction of Causality Matter for the Rich and the Poor?

This paper empirically examines the intricate link between human capital and economic growth using panel data from 90 countries over the period 1970–2010 by employing a panel vector VAR approach under system GMM estimates. The paper visits the issues of feedback and composition effects which put a growing skepticism on the empirical studies evaluating the role of education on economic growth. The physical capital accumulation is also included...