In an infinite-horizon model with endogenous time preferences, foreign aid, foreign borrowing, and domestic capital accumulation, a permanent increase in foreign aid leads to a reduction in long-run capital accumulation, a rise in domestic consumption, and an increase in foreign borrowing....

In this paper, we study the optimal choices of the federal income tax, federal transfers, and local taxes in a dynamic model of capital accumulation and with explicit game structures among private agents, the local government and the federal government. When the federal government is the leader...

In this paper, we consider social status, the spirit of capitalism, fiscal policies, and asset pricing in a stochastic model of growth. With specific assumptions on the production technology, preferences, and stochastic shocks, we derive the explicit solutions to the growth rates of consumption...

In this paper, we study the optimal choices of the federal income tax, federal transfers, and local taxes in a dynamic model of capital accumulation and with explicit gamestructure s among multipleprivateage nts, multiplelocal governments, and the federal government. In general, the optimal...

This paper presents an infinite-horizon model of optimal capital accumulation with the social-status concern and the cash-in-advance constraint. When the cash-in-advance constraint applies to both consumption and investment, money is not supemeutral. If only consumption is subject to the...

This paper presents a group of models showing the strikingly different implications of foreign aid to the private sector and public sector. In the first model, with decentralized decision-making and without optimal choices of fiscal policies on behalf of the government, foreign aid to the...

This paper extends the Barro (1990) model with single aggregate government spending and one flat income tax to include public expenditures and taxes by multiple levels of government. It derives the rate of endogenous growth and, with both simulations and special examples, examines how that rate...

This paper extends Kurz¡¯s (1968) growth model to a stochastic growth framework with the social-status concern and production shocks. Using the stochastic monotonicity of stochastic dynamic system and methods using in Zhang (2007), the existence and stability of invariant distribution has been...

In an optimal growth model with foreign aid, foreign borrowing, and endogenous leisure-and-consumption choices, it is shown that a permanent rise in foreign aid reduces long-run capital accumulation and labor supply, increases long-run consumption, and has no effect on long-run foreign borrowing.