This paper considers the effects of fiscal and financial policy on economic growth in open and closed economies, when human capital formation by young households is constrained by the illiquidity of human wealth. Both endogenous and exogenous growth versions of the basic OLG model are analyzed....

We analyse deflationary bubbles in a model where money is the only financial asset. We show that such bubbles are consistent with the household's transversality condition if and only if the nominal money stock is falling. Our results are in sharp contrast to those in several prominent...

After an absence of almost half a century, the spectre of deflation is once again haunting the corridors of central banks and finance ministries in the industrial world. While preventing or combating deflation poses some unique difficulties not present in preventing or combating inflation,...

The paper analyzes the role of differences in household behavior as a source of persistent and even permanent differences between national or regional productivity growth rates, when there are constant static returns to scale in production and costless international diffusion of technology. A...