The Nelson–Phelps concept of human capital, determining the speed at which a new technology may be implemented, is considered within an AK, overlapping‐generations model, where finance firms act as local monopolies in the loan market but as monopsonistic price‐takers in the deposit market. Households also vote for taxes earmarked for public investment in education and, thence, the subsequent level of human capital. A concentrated financial market structure, despite directly lowering economic growth, may indirectly raise it through provoking a political economy response of voting for higher taxes for greater levels of Nelson–Phelps human capital.