This paper analyzes the dynamic behaviour of a two-sector model of endogenous growth with unproductive government spending. In this model, we prove that the subspace of the parameter space where the equilibrium exhibits indeterminacy is larger, the large the fraction of government revenues...

We develop a dynamic general equilibrium model to study the impact of the 2003 dividend and capital gains tax cuts. In the model, firms are heterogeneous in productivity and make investment and financing decisions subject to capital adjustment costs, equity issuance costs, and collateral...

This paper investigates the dynamic consequences of demographic change and various pension reform scenarios for Austria. The analysis is based on a computable overlapping-generations model with life-cycle labor supply, savings, and search unemployment. The public sector is decomposed into...

It has been believed that a social security system (SSS) is harmful to economic growth. However, it has been recognized recently that a SSS can encourage economic growth if the engine of the growth is human-capital accumulation. This paper uses an analytical model à la Uzawa/Lucas to examine...

We reconsider the conventional wisdom that, in the presence of public goods, Nash tax rates are inefficiently low and decrease with the size of population. We use a general equilibrium dynamic model of a world economy, in which world-wide environmental quality has public good features. We show...

This paper explores the implications that the specification of the leisure activity has on the effects of alternative forms of taxation in a two-sector endogenous growth model of the US economy. Growth and welfare effects of tax reforms are shown to depend markedly on the leisure specification....

We develop a geographic growth model where nominal wages are allowed to diverge between the two considered countries. Removing the standard assumption entailing that both countries always own a traditional sector, we argue that, as trade gets freer, the traditional sector of one country might...

This paper constructs a simple endogenous growth model featuring the product cycle, i.e., the transition from monopoly to perfect competition, and studies its implications for both asset market and business cycle statistics. I find that the product cycle is a powerful amplification mechanism;...

This paper analyses a model of overlapping generations in which agents who are not in the labor market are unable to borrow. An increase in a fully funded pension raises aggregate savings since private savings are not crowded out one-for-one. Labor force participation is determined endogenously,...

We show that in a two-sector real business cycle model wtih sufficiently strong investment externalities, a regressive tax policy can stabilize the economy against fluctuations driven by agents' animal spirits. By contrast, this economy with a flat or progressive tax scheme (such as that in the...