The purpose of the paper is two-fold: (i) to construct and analyze a novel endogenous growth model, in which unbounded growth is possible without the need to assume increasing returns to scale, and (ii) to use the model to estimate the long-run (or dynamic) costs of recessions. In our model,...

In an attempt to advance our understanding of the potential long-run benefits of macroeconomic stabilization policies, the paper studies the long-term effects of economic slowdowns. We construct a discrete-time endogenous growth model, in which a recession, defined as a reduction in resource...

An identical two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raise the relative price of human capital investment so as to favor it over goods production. Modified by having the household sector produce human...

An identical two-sector productivity shock causes Rybczynski (1955) and Stolper and Samuelson (1941) effects that release leisure time and initially raise the relative price of human capital investment so as to favor it over goods production. Modified by having the household sector produce human...

This paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

We develop a two-sector endogenous growth model with a dual labour market resulting from the presence of an effort extraction function in one sector. Effort of workers can be influenced by pay and monitoring. This results in an endogenous non-competitive wage differential between sectors and a...

This paper considers the impact of leisure preference and leisure externalities on growth and labor supply in a Lucas [12] type model, as in Gómez [7], with a separable non‐homothetic utility and the assumption that physical and human capital are both necessary inputs in both the goods and...

We construct a simple endogenous growth model to analyse the relationship between the composition of fiscal policy, economic growth and employment. The government sets different tax rates on labour income, capital income, and private consumption to finance productive expenditures,...

R&D-based growth models are tested using US data for the period 1953-2014. A general growth model is developed which nests the model varieties of interest. The model implies a cointegrating relationship between multifactor productivity, research intensity, and employment. This relationship is...

Public education is usually seen as having at least two desirable effects: fostering economic growth and reducing income inequality. This paper revisits both relations in a single model of occupational choice with an endogenous supply of teachers. First, we show that the impact of public...