This paper examines the dynamic effects of taxation and investment on the steady state output level of an economy. A simple neoclassical growth model with different tiers of government is developed. The initial focus is on governments that aim to maximise their citizens' welfare and economic...

In a one-sector neoclassical dynamic economic growth model, a reasonable ratio of investment to consumption exists, i.e., the “Golden Rule of Consumption”. This study is to extend one-sector neoclassical growth model to a multi-sector one. It is assumed that both the production function and...

This paper studies a two-sector model with aggregate and sector-specific external effects in production and inelastic labor supply. We first characterize the existence, uniqueness and multiplicity of the steady states as well as their welfare properties. We particularly focus on the CES...

In this paper we define the concept of admissible solution and then provide closed-form solutions for all variables of the model along the transitional dynamics path. We present numerical simulations and compare our results with those obtained through the methods developed by Boucekkine and...

By introducing search and matching frictions in both the labor and the credit markets into a cash in advance New Keynesian DSGE model, we provide a novel explanation of the incomplete pass-through from policy rates to loan rates. We show that this phenomenon is ineradicable if banks possess some...

Turkey has the lowest hours worked (the product of total employment and annual hours per worker, divided by the size of the working-age population) among the OECD countries. We study the changes in hours of work following Ohanian, Raffo, and Rogerson (Journal of Monetary Economics, 2008) and...

Growth models with endogenous mortality assume generally that life expectancy is increasing with output per capita and, thus, with individual consumption, whatever its level is. However, empirical evidence supports a U-shaped relationship between consumption and mortality, implying that the...

Luxembourg is a small open economy with a set of particular features, including rather limited competition in the domestic goods market, strong union power, and a segmented labor market for resident and non-resident workers. In this paper we develop a medium scale DSGE model that captures these...

This study empirically explores the growth effects of rent seeking activity (RSA) for a group of 52 developing/transitional countries, using a dynamic panel data approach. The modeling framework is a Mankiw–Romer–Weil (MRW) conditional convergence model with path dependence and augmented by...

In this paper, firms are considered on the hypothesis of having incomplete rationality expectation and incomplete information of the market to get the dynamic development of price competition behavior in the Hotelling model (Hotelling, 1929). Under the assumption of the heterogeneous...