We explore a political-economy model of labor subsidies, extending Meltzer and Richard's median-voter model to a dynamic setting. We explore only one source of heterogeneity: initial wealth. As a consequence, given an operative wealth effect, poorer agents work harder, and if the agent with...

We study how the introduction of consumption externalities affects the efficiency of the dynamic equilibrium in an economy displaying dynastic altruism. When the bequest motive is inoperative consumption externalities affect the intertemporal margin between young and old consumption and thus...

In this paper, we show that consumption externalities are a source of equilibrium indeterminacy in a growth model with endogenous labor supply. In particular, when the marginal rate of substitution between own consumption and the others' consumption is constant along the equilibrium path, the...

This paper studies the optimality of a minimum wage law when it is used, jointly with a distortionary tax-transfer scheme, to redistribute income among agents with different marginal productivity. We build a dynamic and stochastic general equilibrium model with a Ramsey planner making decisions...