Standard economics is regarded as the theory of the market system. Profit is the pivotal phenomenon of this system. Contrary to expectations, though, profit is neither well defined not fully understood. The frailty of the theoretical core is passed on to the subfields. This paper provides a...

Fiscal policy is particularly relevant in dollarized economies. For the case of Ecuador, we analyze the effects of taxes and public spending on the overall performance of the economy for the period 1993-2009. To do this, we use a structural autoregressive vector model (SVAR) incorporating the...

This paper constructs a narrative account of all legislated discretionary policy changes in the United Kingdom from 1945 to 2009. Following Romer and Romer (2009, 2010), evidence of the policymakers’ motivation is presented from U.K. official Budget documents together with technical notes,...

This paper investigates the transmission mechanism of government spending shocks in an estimated dynamic general equilibrium model. I construct a New Keynesian model with distortionary labour and capital taxes and with references that allow the wealth effect on labour supply to vary in strength....

This paper aims to study the stability properties of a two-period over- lapping generations model (OLG) with a progressive labor-income taxa- tion rule. In this case, wage income tax rates are increasing with agent's income. Each representative agent lives two periods: youth and adult- hood. In...

The current short note suggests an alternative measure for economic growth, which is based on consumer welfare instead of per capita income. It suggests that this measure can be better applied to economies with certain characteristics.

This study revisits the Feldstein-Horioka puzzle by investigating the saving-investment nexus through the unit root test, cointegration procedure, unrestricted VAR causality, and dynamic OLS (DOLS). Ten Asia Pacific nations of different level of economic development and financial openness were...

Hall (1978) has stimulated considerable controversy and empirical work on testing the permanent income hypothesis (PIH). Much of the empirical work is on the developed countries where opportunities for inter-temporal substitution are generally higher than in the developing countries. Therefore,...

This article re-examines Earl Hamilton’s famous 1929 thesis on ‘Profit Inflation’ and the ‘birth of modern industrial capitalism’: namely, that the inflationary forces of the Price Revolution era produced a widening gap between prices and wages, thus providing industrial entrepreneurs...

National accountants treat as consumption all expenditure incurred in purchasing consumer durables and in forming intangible assets such as knowledge, education and good health. The case is made in this paper that the national accounts measures of saving and investment understate both the extent...