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...

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...

The literature on endogenous growth cycles predicts the countercyclical allocation of resources to R&D. However, this prediction is not supported by empirical studies. This study considers the R&D-based growth model with endogenous fluctuations introducing population growth and a negative...

The aim of this paper is to provide an analysis of the impact of investment in health-policies on economic development. In order to do this, it is vital to bear in mind the fact that long-term economic growth is characterized by the interaction between the physical aspects of capital dynamics...

We present a Schumpterian model of endogenous growth with General Purpose Technologies (GPTs) that captures two important historical stylized facts: First, from the beginning of mankind until today GPTs are arriving at an increasing frequency and, second, all GPTs heavily depended on previous...