In a neoclassical economy with endogenous capital- and labor-augmenting technical change the steady-state growth rate of output per worker is shown to increase in the elasticity of substitution between capital and labor. This confirms the assessment of Klump and de La Grandville (2000) that the...

We build a dynamic general equilibrium model with 2 countries, horizontal and vertical multinational activity and endogenous domestic and foreign investment. It is found that horizontal multinational activity always leads to a complementary relationship between domestic and foreign investment....

Population growth is often viewed as a most oppressive global problem with respect to environmental deterioration. In this paper, we investigate the optimal development of a coupled system comprising population, economy, and the natural environment as subsystems. In our formal dynamic model...

Population growth is often viewed as a most oppressive global problem with respect to environmental deterioration, but the relationships between population development, economic dynamics and environmental pollution are complex due to various feedback mechanisms. We analyze society’s economic...

Incorporating weakly nonseparable preferences into the familiar time-preference model, we emphasize a role of steady-state welfare changes in determining the effect of permanent tariffs on the current account. The effect consists of: a welfare effect, due to steady-state welfare changes, which...

This article investigates the consequences of population ageing for long-run economic growth perspectives. We introduce population ageing into a generalized model of endogenous technological change incorporating the model of Romer (1990) and Jones (1995) as special cases. We find that increases...

In order to better understand relationships between the real economy and financial economy, it is necessary to formulate a model of financing. New Keynesian theory emphasizes that a firm's net worth influences investment decisions and business cycles under an imperfect capital market. We have...

In the early 1970s, hours worked per working-age person in Spain were higher than in the United States. Starting in 1975, however, hours worked in Spain fell by 40%. We find that 80% of the decline in hours worked can be accounted for by the evolution of taxes in an otherwise standard...

This paper views the growth and convergence process of the four Visegrad economies - the Czech Republic, Hungary, Poland and Slovakia - through the lens of the open economy, stochastic neoclassical growth model. We use a unified framework to understand both the long-run convergence path and...

In this paper we present a model of flexicurity capitalism that exhibits a second labor market with the government as an employer of first resort, where all workers not employed by firms in the private sector find meaningful employment. We show that the model exhibits a unique interior steady...