The aim of this paper is to identify possibilities for guiding policy in the area of basic research. We provide an extended review of basic research and offer new insights on its linkages to key economic variables and economic growth. After defining what basic research is, we identify and...

This paper models technology adoption as replacing workers by machines, which perform the same job in the production process. The paper shows that such modelling of technology adoption affects significantly the analysis of economic growth. This model can explain large and persistent...

This Paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

We study the evolution of an educational system which is founded on a hierarchical differentiation between technical and general education, with a superior social status attached to general. The resulting dynamic political equilibrium is best summarized by the ratio of vocational to general...

This Paper examines the process of development from an epoch of Malthusian stagnation to a state of sustained economic growth. The analysis focuses on recently advanced unified growth theories that capture the intricate evolution of income per capita, technology, and population over the course...

This paper considers the distributional consequences of the reform programme in Russia. Although a small fraction of the population have gained under the reforms, average real household per capita income has declined significantly with households at the lower end of the income distribution...

When economic integration fosters expectations of productivity convergence, capital flows are driven by consumption-smoothing anticipation of income growth patterns as well as by factor-intensity equalization. In the euro area, financial integration eased accumulation of international...

We introduce firm and worker heterogeneity into a model of innovation-driven endogenous growth. Individuals who differ in ability sort into either a research sector or a manufacturing sector that produces differentiated goods. Each research project generates a new variety of the differentiated...

What shapes the optimal degree of progressivity of the tax and transfer system? On the one hand, a progressive tax system can counteract inequality in initial conditions and substitute for imperfect private insurance against idiosyncratic earnings risk. At the same time, progressivity reduces...

This Paper presents data on the evolution of top incomes and wages from 1956 to 2000 in India using individual tax returns data. Our data shows that the shares of the top 0.01%, the top 0.1% and the top 1% in total income shrank very substantially until the early-to-mid 1980s, but then went back...