This paper demonstrates that the role of the personal income distribution for an economy's process of development through risky human capital accumulation critically depends on the shape of the saving function. Empirical evidence for the U.S. strongly suggests that the marginal propensity to...

The optimal mix of growth policies is determined within a comprehensive endogenous growth model. The analysis captures important elements of the tax-transfer system and accounts for transitional dynamics. Currently, for calculating corporate taxable income US firms are allowed to deduct...

Market imperfections may lead to underinvestment in dynamic general equilibrium models. An interesting but unexplored question is whether policy interventions which attenuate underinvestment gaps necessarily imply that consumption will initially decline. By employing a calibrated version of a...

This paper develops a two-sector R&D-based growth model with congestion effects from increasing urban population density. We show that endogenous technological progress causes structural change if there are positive productivity spillovers from the modern to the traditional sector and Engel’s...

This paper investigates how people subdivided in social groups behave in an economy without property rights. Facing a linear production technology groups follow Markovian strategies for consumption and investment. Additionally, they may spend effort in an appropriation contest. For a symmetric...

We set up a neoclassical growth model extended by a corporate sector, an investment and finance decision of firms, and a set of taxes on capital income. We provide analytical dynamic scoring of taxes on corporate income, dividends, capital gains, other private capital income, and depreciation...