We present a model of optimal government policy when policy choices may exacerbate socio-political instability (SPI). We show that optimal policy that takes into account SPI transforms a standard concave growth model into a model with both a poverty trap and endogenous growth. The resulting...

Can a growing welfare state induce a regime switch in the growth rate of an econ-omy? This paper constructs a dynamic political economy model of economic growth and the welfare state in which both variables are non-linearly related and jointly en-dogenous. Using a Markov switching framework over...

We study the effect of capital controls on the level of investment in human capital and the resulting growth path of an economy. The economy consists of two groups of agents based on the ownership of factors of production. One type of agents - called workers - own human capital and bequeath...

This paper constructs a heterogenous agent model of endogenous distribution and growth. When the labor leisure choice of agents is exogenous, the factor holding ratios of households converges to a mass point that is independent of the initial distribution of capital in the steady state. There is...

This paper generalizes the analysis of distributive conflict, politics, and growth developed by by Alesina-Rodrik (1994). We construct a heterogenous-agent framework in which both growth and the distribution of wealth are endogenous. Due to adjustments in the distribution of wealth, the...

The ratio of Indian to US per capita output over the past 45 years has displayed a distinctive "V"-shaped pattern. We show that a strikingly similar V-shaped pattern is visible not just in aggregate output .figures, but also as the primary determinant of long-term movements in the...

Terrorism is widely regarded as a public bad vis-à-vis security - a public good - affecting the subjective well-being of citizens. As studies have shown, citizens' risk-perceptions and risk-assessment are affected by large scale terrorist acts. Reported evidence shows that individuals are often...

The processes whereby security policy tackles security challenges and converts them into security priorities (at least since September 11, 2011) are criticized by experts working in the field as erratic and susceptible to media and society pressures. We are always being warned of the emergence...

One of the research areas of the New Agenda for European Security Economics (EUSECON) is society's response to insecurity. Solutions to enhance security often involve the development and supply of specific goods and services. This has led to an industry which has progressively evolved through...