We calibrate an infinite-horizon model with endogenous growth and unemployment on actual data from the largest countries in the European Union. Two types of balanced-budget fiscal policy experiments are studied. First, the effects of separately changing the tax rates on capital, labor and...

Kaldor's neo-Pasinetti theorem is examined in an economy where the rate of profit adjusts to higher effective demand through increases in the rate of capacity utilization rather than through increases in the margin of profit. A Tobinian investment function, where investment responds to the...

In a Barro-type economy with exogenous consumption aspirations, raising income taxes favors growth even in the presence of lump-sum taxes. Such a policy is compatible with the behavior of private consumption, income taxes and growth rates observed in actual economies.

. In this article, as part of the symposium on total factor productivity, Timothy C. Sargent and Edgard R. Rodriquez of Finance Canada discuss the issue of the choice between labour and total factor productivity. They conclude that both measures have uses. For periods of less than a decade,...

This paper examines the interrelationship between capital accumulation, fertility, and growth by introducing an endogenous fertility decision into Diamond's (1965) neoclassical growth model. Under the assumptions that children provide old age support and that individuals incur a variable time...

This paper develops a two-sector model for a renewable natural resource based economy. Pareto efficient results show the optimal harvesting rate that allows for sustained long-run optimal growth, which is upper-bounded by the biological rate of reproduction. Regulation prevents from resource...

Do high levels of human capital foster economic growth by facilitating technology adoption? If so, countries with more human capital should have adopted more rapidly the skilled-labor augmenting technologies becoming available since the 1970’s. High human capital levels should therefore have...

In a model where seignorage provides the financing instrument for the government’s budget, public spending volatility has an adverse effect on long-run growth. This negative relationship arises because the incidence of volatility in this type of public policy is responsible for higher average...

Three decades have passed since China dramatically opened up to the global market and began to catch up rapidly with leading economies. In this paper we discuss the effects of Chinafs opening-up and rapid growth on the welfare of both China and the rest of the world (ROW). We find that the...

A computable neoclassical model with financial intermediation is used first to explain the falling Euler equation tax wedge of S. Korea and Taiwan between 1966 and 2006 and then to explore the hypothesis that more efficient financial intermediation enhances growth. The analysis reveals that...