This contribution provides evidence for the hypothesis that trade increases growth through its curbing effect on capital taxes. The analysed trade-growth channel includes a negative impact of openness on corporate taxes and a negative effect of taxes on growth. The paper explores the two steps...

We set up a dynamic stochastic model of a stylized economy comprising a final output sector (with traditional and modern firms) and an intermediate goods sector. It is shown that market integration reduces the volatility of the rate of return of capital invested in modern firms. The induced...

Production often causes pollution as a by-product. Once pollution problems become too severe, regulation is introduced by political authorities which forces the economy to make a transition to cleaner production processes. We model this transition as a change in "general purpose technology"...

This contribution provides evidence for the hypothesis that trade increases growth through its curbing effect on capital taxes. The analyzed mechanism includes two different steps and considers the critical points of both the theoretical and empirical studies in this field. In particular, the...

This contribution provides evidence for the hypothesis that trade increases growth through its curbing effect on capital taxes. The analysed mechanism includes two different steps and considers the critical points of both the theoretical and empirical studies in this field. In particular, the...

Integration affects economic growth mainly through two different channels : The scale-effect channel and the factor-reallocation channel. In order to investigate both channels within a unifying framework, we employ a simple descriptive growth model. The scale-effect channel increases either the...