This paper employs a stochastic endogenous growth model with productive government expenditure to analyze the macroeconomic effects of income taxation. We demonstrate that in the presence of capital and income risk the impact of taxation on consumption choice as well as on economic growth is...

In this paper the impacts of income and consumption taxes are analyzed within a model of stochastic endogenous growth with congestion. It is shown that the optimal amount of governmental input diminishes with uncertainty and that the optimal financing depends on the relation between the degrees...

This paper combines the Aiyagari/Huggett–type standard incomplete markets model with the Arrow/Romer approach to growth to analyze feedback effects between growth and inequality, both endogenously determined in equilibrium. We derive conditions on existence/ nonexistence of balanced growth...

This paper proposes a framework for comparing the predictions of representative household models with those of models of overlapping generations, in the context of a class of endogenous growth theories with investment adjustment costs. In the model used in this paper, savings and investment are...

Productive consumption enables the satisfaction of current needs and, at the same time, increases the productive potential of labour. Theoretical as well as empirical evidence suggests that productive consumption is primarily relevant to low-income countries. From the perspective of growth...

Productive consumption enables the satisfaction of current needs and simultaneously increases the productive potential of labour. From the perspective of growth theory, the productive-consumption hypothesis is of fundamental interest because it modifies the harsh intertemporal consumption...

The purpose of the present paper is to describe the role of uncertainty and technical change in an environmental context. Which impact does ecological uncertainty have on physical and R&D investments' decisions? How are pollution trajectories modified when uncertainty is taken into account? To...