Network effects in a human capital based economic growth model

TL;DR

This paper examines how social network structures influence education decisions and innovation output within a human capital-driven economic growth model, comparing regular and random networks to mean field predictions.

Contribution

It introduces an analysis of social network effects on growth in a human capital model, extending previous work by incorporating network topology.

Findings

Network structure significantly impacts education and innovation decisions.

Regular and random networks produce different growth dynamics.

Results align variably with mean field model predictions.

Abstract

We revisit a recently introduced agent model[ACS {\bf 11}, 99 (2008)], where economic growth is a consequence of education (human capital formation) and innovation, and investigate the influence of the agents' social network, both on an agent's decision to pursue education and on the output of new ideas. Regular and random networks are considered. The results are compared with the predictions of a mean field (representative agent) model.