This paper continues the study of endogenous fiscal policy, using a framework where both capital taxes and government spending are determined optimally. The paper examines the interaction between private investors and fiscal authorities. It specifies the circumstances under which public debt...

This paper uses a dynamic monopoly union model to analyse the joint determination of wages, employment and investment in the absence of binding contracts. The union maximizes a utilitarian utility function while the firm faces a neoclassical investment problem with adjustment costs....