Human Capital and Its Structure

Originally published in The Journal of Private Enterprise

The Austrian school is unique for emphasizing an economy's capital structure. This paper explores the capital-based approach to macroeconomics, with its focus on capital as a structure and the heterogeneity of both physical and human capital. What might this approach teach us about how government interventions might distort market price dignals, disrupt intertemporal coordination, and lead to malinvestments in human capital? By extending the Austrian theory in this manner, I sketch a theoretical foundation that future scholars can build on to contribute to some of the most pertinent questions in labor economics and macroeconomics.