How do movements in the distribution of income and wealth affect the macroeconomy? We create two economies where the only difference between them lies in the initial distribution of economic resources and the degree of frictions in financial markets. Generally, these economies eventually reach...

Financial liberalization is a controversial issue. One of the reasons is that many empirical studies report conflicting views. So far, negligible effects were found in savings and lending, while positive effects in allocating capital efficiently. However, these regression based studies are not...

This paper constructs a model of non-balanced economic growth. The main economic force is the combination of differences in factor proportions and capital deepening. Capital deepening tends to increase the relative output of the sector with a greater capital share (despite the equilibrium...

Tradable permits are now widely used to control pollution. We investigate the implications of setting up such a system in another field -- population control --, either domestically or at the global level. We first generalize the framework with both tradable procreation allowances and tradable...

In this paper I estimate unobserved labor-generated knowledge spillovers within and among six large macroeconomic sectors covering the totality of the US civilian economy from 1948 to 1991. Unobserved spillovers are identified by observed TFP changes measured using Dale Jorgenson’s...