A comprehensive study of the linkages between demographic and economic variables should not only account for vintage specificity but also incorporate the relevant economic and demographic decisions in a complete optimal control set-up. In this paper, a methodological set-up allowing to reach...

Rational investors perceive correctly the value of financial information. Investment in information is therefore rewarded with a higher Sharpe ratio. Overcon.dent investors overstate the quality of their own information, and thus attain a lower Sharpe ratio. We contrast the implications of the...

In this paper we focus on poor financial literacy as one potential factor explaining lack of portfolio diversification. We use the 2007 Unicredit Customers' Survey, which has indicators of portfolio choice, financial literacy and many demographic characteristics of investors. We first propose...

This paper presents a flexible-price small open economy model with a “peso problem” in productivity states. Agents rationally adjust their beliefs about future productivity growth after the arrival of news. A downward revision of expectations triggers a Sudden Stop, together with large...

We criticise existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness and initial income. These results do not survive once we use instrumental variables to correct for the endogenous...

A simple dynamic general equilibrium model is set up in which firms face idiosyncratic productivity shocks. Firms whose productivity has fallen too low exit, and entrants try to imitate the best practice of existing firms, so that the expected productivity of entering firms is a function of...

Cross-country evidence is presented on resource dependence and the link between volatility and growth. First, growth depends negatively on volatility of unanticipated output growth independent of initial income per capita, the average investment share, initial human capital, trade openness, the...

This paper investigates the trade-off between growth and distribution in open economies. In closed economies redistribution seems to reduce growth. I show that in open economies tax competition leads redistributing (left-wing) governments to mimic 'right-wing' policies if capital mobility is...

This paper provides an analysis relating economic growth, human capital composition, income distribution and public education policies.

Rising longevity has led to population aging in developed countries, causing increasing concerns about its economic impact. Specially, the trend of population aging increases health expenditure in developed countries, and 70% to 80% of health expenditure is funded by public sector. Therefore,...