The purpose of the paper is to study the effects of labor market policies on the equilibrium rate of growth in the Grossman-Helpman model. For that purpose, the version of the their model developed by Klette and Kortum to explain the distribution of firm size is extended to allow for both...

In this paper I quantify the value of conscription as a state-contingent capital levy in the face of stochastic war-and-peace shocks. I construct a model in which the Ramsey planner is subject to a restricted set of fiscal instruments, characterize optimal policy and the role of conscription,...

This paper characterizes the dynamics of Pareto efficient income taxes in a dynamic economy with human capital accumulation. I extend the tools and insights developed by Mirrlees (1971) into a dynamic framework. I follow Diamond (1998) by assuming that there are no income effects on labor...

I study a model where firms bargain with unions over wages and employment levels. This interaction generates unemployment. Households take unemployment risk as given in making their participation decisions. I am thus able to study the interactions of product and labor market institutions in a...

We study the volatility of growth rates and find that it differs systematically across countries. Our empirical investigation reveals that there is a high correlation between disparity in political regimes across countries and differences in volatility. This is not the case for some of the...

Governments in emerging markets often behave like a "tormented insurer" struggling to smooth government outlays given the randomness of public revenues in a world with "liability dollarization" in which they can only issue debt denominated in hard currencies, or indexed to tradable goods prices....

This paper analyzes optimal pre-announced capital and labor income tax reforms under valuable and productive government spending. Our baseline optimal reform reveals that these model ingredients result in a reduction of welfare losses that occur when the reform is announced before its...