We analyze the equilibrium and the optimal resource allocations in a monocentric city under monopolistic competition. Unlike the constant elasticity of substitution (CES) case, where the equilibrium markups are independent of the city size, we present a variable elasticity of substitution (VES)...

It is well known that, in OLG economies with life-cycle saving and exogenous growth, competitive equilibria will in general fail to achieve optimality and may even be dynamically inefficient. This is a consequence of individuals accumulating amounts of physical capital that differ from the level...

In this paper we illustrate the possible normative relevance of the links between human capital and financial assets via an example related to growth. When the financial structure is complete, growth is indeterminate because individual allocations between human capital and a tradable asset are...

We propose a model where imperfect matching between firms and workers on local labor markets leads to incentives for spatial agglomeration. We show that the occurrence of spatial agglomeration depends on initial size differences in terms of both number of workers and firms. Allowing for dynamics...

Several developed countries are witnessing a trend towards an increasing gap in the earnings between skilled and unskilled workers. Though it is widely recognised that human capital formation programs through education and training should be strengthened in the presence of increasing wage...

We evaluate the effect of technology, demographics and policy on the differential evolution of the skill premium and on the rise in education investment in France and the USA. We use a computable general equilibrium model with overlapping generations of individuals, and endogenous education...

The transition from economic stagnation to sustained growth is often modelled thanks to "population-induced" productivity improvements, which are assumed rather than derived from primary assumptions. In this paper the effect of population on productivity is derived from optimal behavior. More...

We propose a new theory of the demographic transition based on the evidence that body development during childhood is an important predictor of adult life expectancy. Fertility, childhood development, longevity, education and income growth all result from individual decisions. Parents face a...