A less well-known empirical finding for the US and UK is a pronounced low frequency negative relationship between inflation and Tobin’s q; a normalized market price of capital. This stylized fact is explained within a dynamic stochastic general equilibrium model using three key features: (i) a...

An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent government has to compensate for the shortfall in private...

A monetary endogenous growth model is developed by explicitly taking into account the growth-enhancing effects of reserve-augmented seigniorage. The seigniorage is generated by imposing a reserve requirement on the banking sector. The benevolent government then spends all the seigniorage revenue...