In this paper we are concerned with the equilibrium dynamics of a two-sector model of endogenous growth with distortionary taxes. We show that for certain parameters values and tax schemes every equilibrium orbit--except the steady state solution--is non-interior; i.e., there are times in which...

In this paper, we present a model of labor search in order to assess the role played by unemployment benefits in the increase of European unemployment since the mid 70's. Our main finding is that although benefits may reduce unemployment, they increase the vulnerability of the economy to...