Finding solutions to the Bellman equation often relies on restrictive boundedness assumptions. In this paper we develop a method of proof that allows to dispense with the assumption that returns are bounded from above. In applications our assumptions only imply that long run average (expected)...

We explore an economy with two regions and independent local administrations. Local governments collect taxes to finance public education, but once educated agents can choose to migrate to the other region. The Nash equilibrium of the long-run game between the two governments is compared to a...

This paper aims at studying the interaction between growth of real output and human capital accumulation when education requires investment of physical resources. To this end we investigate the aggregate implications of individual specific uncertainty about returns to investment in education in...

This paper examines the stationary equilibrium situation and the dynamic behavior of the main control variables of an economy where investment is subject to adjustment costs and the maintenance of deteriorated capital goods is considered expensive. The optimal intertemporal resources allocation...