Nonlinear Dynamics, Psychology, and Life Sciences, Vol. 9, Iss. 3, July, 2005, pp. 335-357
@2005 Society for Chaos Theory in Psychology & Life Sciences


Path-Dependent Economic Evolution with Capital Accumulation and Education

Wei-Bin Zhang, Ritsumeikan Asia Pacific University

Abstract: This paper proposes a dynamic economic model with wealth accumulation and human capital accumulation. The economic system consists of one production sector and one university. The university carries out education. The model describes a dynamic interdependence between wealth accumulation, human capital accumulation, and division of labor under perfect economic competition and the government intervention in education. We provide conditions for the existence of equilibrium points and stability of the nonlinear dynamic system. The simulation results demonstrate path-dependent processes of the nonlinear evolution. Some insights into East Asia’s industrializing processes are provided.

Keywords: education, saving, growth, multiple equilibrium points, path-dependent