It is a well known fact that economic development and distance to the equator are positively correlated variables in the world today. It is perhaps less well known that as recently as 1500 C.E. it was the other way around. The present paper provides a theory of why the 'latitude gradient'...

This paper consolidates two previously disconnected literatures. It integrates R&D-based innovations into a unified growth framework with micro-founded fertility and schooling behavior. The theory suggests a refined view on the human factor in productivity growth. It helps to explain the...

We examine the long-run relationship between fertility, mortality, and income using panel cointegration techniques and the available data for the last century. Our main result is that mortality changes and growth of income contributed to the fertility transition. The fertility reduction...

This paper analyses the long run effects of the 2000 Income Tax Act in Estonia in a dynamic equilibrium model. It studiesthe impact of the shift from an imputation system to a system in which companies pay taxes only with respect to distributed profits.Balanced growth paths, transitional...

Economists frequently confine themselves to the qualitative analysis of continuous optimization problems or they restrict their quantitative analysis to inaccurate methods like linearization around the steady state. The fact that the solution is characterized by an inherently unstable adjustment...

The paper analyses the interaction between capital structure and employment decisions of firms. For this purpose, a theoretical model is developed in which a firm determines employment along an optimal path taking into account financial considerations. The empirical analysis using West German...

The paper analyses dynamic investment behaviour and labour demand of the financially restricted firm. It shows that firm development is characterised by a negative correlation between leverage and the stocks of capital and labour but a positive correlation between leverage and investment and...

This paper reports an attempt to implement financial factors into a neoclassical model of optimal factor demand. The theoretical shows that factor demand decisions of firms operating under monopolistic competition or with decreasing returns to scale are affected by financial restrictions. The...

The paper presents the long-run equilibrium and development dynamics in the neoclassical growth model and a simple model of endogenous growth when property rights are absent. The results are compared to the outcome in a corresponding model economy with secure property rights. The main findings...