We study the dynamic Ramsey problem of finding optimal public debt and linear taxes on capital and labor income within a tractable infinite horizon model with incomplete markets. With zero public expenditure and debt, it is optimal to tax the risky labor income and subsidize capital, while a...

We consider an economy where individuals face uninsurable risks to their human capital accumulation, and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that...

If demand for human services is inelastic or manufactured goods are necessities, labour shifts from manufacturing to services and the budget share of services rises. Higher productivity growth in the market sector pushes up the tax rate and public employment if private goods and public services...

This paper develops an endogenous growth model with heterogeneous firms to analyze the impact of intra-industry trade on productivity growth. Growth is generated by selection, and sustained by entrants imitating successful incumbents. Firms are subject to idiosyncratic productivity shocks and...

Globalization features one of the major global trends which shape economic outcomes in developing and developed countries. Standard results from the empirical growth literature suggest that participation in worldwide trade is an important determinant of economic growth. In contrast to previous...

This paper generalizes Benhabib and Farmer [4], by allowing for a strictly positive time-to-build of capital. The introduction of a time-to-build delay yields a system of mixed functional di¤erential equations. We show that the system has a unique steady state. More important, we prove that the...

Recent empirical evidence based on firm level data emphasizes firm heterogeneity in innovation activities and the different effects of process and product innovations on the productivity level and productivity growth. To match this evidence, this paper develops an endogenous growth model with...

This paper presents an alternative way of studying teh relationship among factors' inequality, growth and technological progress, heavily based on industrial production data.

We highlight the salient characteristics and implications of the seminal contributions in the field of vintage capital growth theory (proposed entry for the New Palgrave Dictionary of Economics, 2nd edition).

This article shows that endogeneous growth in capital is compatible with a cecreasing rate of interest when investment is entirely financed by the earnings of the young and when there is an externality effect of capital on the productivity of their labour. And despite the presence of this...