Monday, February 23, 2015

Matthew Martin — Is human capital capital?

More thoughts on human capital.
Of course, human capital is not capital. If it were, we'd just call it capital and lump it in with the rest--the purpose of the term "human capital" is to distinguish it from actual capital.

So, if it's not capital, what is human capital? At most, I'd say it's a modeling insight. The vague notion of "skills" and knowledge that it stands in for are very real, but when it comes to modelling we are really just pretending it's a kind of capital stock. The key insight was in recognizing that skills and knowledge share a few of the same kinds of intertemporal dynamics as capital, and that we can obtain accurate predictions by modeling them as such, even though they differ in lots other ways.…
Separating Hyperplanes — A blog between the spheres of Economic Theory and Policy Analysis
Is human capital capital?
Matthew Martin | health economist and programmer for the Cancer and Blood Diseases Institute at Cincinnati Children’s Hospital Medical Center

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