Direct effects of education on growth The direct positive effects of education, and more generally of human capital, on growth have been demonstrated by empirical analyses employing both macroeconomic and microeconomic data.2 [SLIDE 5] Several empirical studies show that more affluent countries are also richer in human capital.
That model employs the “arbitrage-free” term structure framework and jointly models real yields, nominal yields, and inflation as functions of four underlying latent factors. Historical data on nominal yields, real yields, and inflation can be used to estimate these underlying factors and the relationship of real and nominal yields to the factors.