We show that financial sector bailouts and sovereign credit risk are intimately linked. A bailout benefits the economy by ameliorating the under-investment problem of the financial sector. However, increasing taxation of the non-financial sector to fund the bailout may be inefficient since it...

We argue that with interdependent utility functions growth can lead to a decline in total welfare of a society if the gains from growth are sufficiently unequally distributed in the presence of negative externalities, i.e., envy.

We study the interactions and dynamics of human capital, growth and inequality by explicitly embedding networks into a standard endogenous growth model with overlapping generations. The human capital of a household depends on investment in education and on average human capital of the...

We analyse how, in representative democracies, income distribution influences the stringency of environmental policy and economic growth. Individuals (who differ in abilities) live for two periods, working when young and owning capital when old. Externalities are caused by a polluting factor....

This paper examines the linkages among family planning, sectoral growth and income distribution in Rwanda. Drawing on the 2006 SAM accounting multipliers, macroeconomic e¤ects of alternative income policies are evaluated. Furthermore, the high and low-income gain pathways are identi�ed by...

This paper analyzes the macroeconomic role that different household groups play in human capital formation, sectoral growth and income distribution in Rwanda. Using a disaggregated SAM for Rwanda and with the assistance of structural path analysis, the paper explores the macroeconomic...

Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with...