This paper brings three new insights into the Purchasing Power Parity (PPP) debate. First, we show that a half-life PPP model is able to forecast real exchange rates (RER) better than the random walk (RW) model at both short and long-term horizons. Secondly, we find that this result holds only...

The objective of this paper is to add to the the criticisms of the "macro-Mincer" approach by emphasizing two important theoretical points, not addressed so far in the literature. First, we show that the "macro-Mincer" relationship between aggregate human capital and average years of schooling...

The objective of the current paper is to estimate the aggregate, country-level production function as a relationship between countries' aggregate inputs and their maximum attainable output, computed on the basis of the World Technology Frontier -- the best-practice frontier at each moment in...

Most technologies used nowadays are complex in the sense that the production processes (and products themselves) consist of a large number of components which might interact with each other in complementary ways. Based on this insight, the current paper assumes that the total productivity of any...

This paper provides evidence that bridging and bonding social capital as well as social trust may interdependently affect individuals' earnings and subjective well-being. Paper is based on cross-sectional World Values Survey 2000 data on individuals from Central and Eastern European countries...

We investigate the extent to which bridging and bonding social capital as well as social trust and individuals’ earnings interdependently affect self-reported happiness. The study is based on cross-sectional World Values Survey 2000 data on individuals from eight Central and Eastern European...

The study considers a stochastic R&D process where the invented production technologies consist of a large number n of complementary components. The degree of complementarity is captured by the elasticity of substitution of the CES aggregator function. Drawing from the Central Limit Theorem and...

We generalize the normalized Constant Elasticity of Substitution (CES) production function by allowing the elasticity of substitution to vary isoelastically with (i) relative factor shares, (ii) marginal rates of substitution, (iii) capital–labor ratios, or (iv) capital–output ratios....

We introduce fertility choice into an R&D-based semi-endogenous growth model so that the economy's long-run growth rate is again fully endogenously determined. The ultimate growth engine is located in the population equation of the model ("people reproduce in proportion to their number"), and...