This discussion paper led to an article in <I>Regional Studies</I> (2014). Volume 48, issue 4, pages 624-645.<P> Knowledge triggers regional growth. Evidence suggests that skilled labour force concentrates in islands of innovation, determining an advantage for innovative regions and a challenge for...</p></i>

This paper enters the debate on the islands of innovation through the lens of the standard Lucas (1988) growth model. It begins with a review of the theoretical details of the model and of the ensuing main empirical results, which can be identified when estimating such model on a sample of 261...

In a dynamic setting, housing is both an asset and a consumption good. But should it be taxed like other forms of consumption or like other forms of saving? We consider the optimal taxation of the imputed rent from owner housing within a version of the neoclassical growth model. We find that the...

We argue that promoting education may be a means to reduceincome inequality. When workers of different skill levels areimperfect substitutes in production, an increase in the level ofhuman capital in the economy reduces the return to education.Hence, a given compression of after-tax incomes can...