This paper studies social welfare in a heterogeneous population under the criteria of efficiency and sustainable heterogeneity. As is well known, heterogeneity in time preference results in substantial inequality. This paper shows that, even if households have heterogeneous preferences, there is...

The purpose of this study is to contribute further on the twin deficits debate in a developing economy. The data for Malaysia over four decades is used as a case study. Empirical result obtained from the Johansen-Juselius (1990) cointegration test indicates that budget deficit and current...

Keynes’ original intention in introducing the concept of a liquidity trap was to explain the reason why persistent large amounts of unutilized resources were generated during the Great Depression. This paper shows that this type of phenomenon cannot be explained in the framework of a...