Using a small country model with habit-forming consumers and costly investment, we analyze equilibrium dynamics of the economy and derive empirical and welfare implications. The model can mimic some stylized facts: (i) a temporary increase in fiscal spending always deteriorates the current...

In this paper, we consider and formulate, in cooperative production economies, a social procedure for choosing fair allocation rules, basing it upon the argument of the Rawlsian two principles of justice (Rawls (1971)). First, we adopt Sen's Capability (Sen (1980, 1985)) index to evaluate...