The purpose of this paper is to provide an exact algebraic solution to a fully specified Romer endogenous growth model. The proposed model has three main virtues. First, taking Romer's [1986] model as the starting point, we build a completely and explicitly micro-founded competitive general...

This paper studies an endogenous growth economy with two sectors owned by a life-time utility maximizing representative household, one sector producing consumption goods and the other sector producing knowledge and technology. The stationary Euler conditions are used to derived relationships...

This paper investigates the growth impact of Information and Communication Technologies (ICT) in an economy consisting of three sectors: ICT-producing, ICT-using, and non-ICT-using. The ICT progress causes falling prices of the consumption and intermediates produced by the ICT-using sector,...

We look at the theory of arbitrage with taxation under certainty. The tax scale in our model is not linear. Under the premise that tax scale is convex, we analyze prices that do not exhibit arbitrage opportunities. It turns out that there are two kinds of arbitrage: unbounded as well as bounded...

This chapter on urbanization and growth focuses on modeling and empirical evidence that pertain to a number of inter-related questions. Why do cities form in an economy, with so much of economic activity in countries geographically concentrated in cities? Second, how do different types of cities...

In this paper we develop a framework to analyze stochastic dynamic optimization problems in discrete time. We obtain new results about the existence and uniqueness of solutions to the Bellman equation through a notion of Banach contractions that generalizes known results for Banach and local...

We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in the damage coefficient. The model allows the full dynamic characterization of the optimal emission policies under uncertainty. The results, that imply prudent behavior due to...

We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in the damage coefficient. The model allows the full dynamic characterization of the optimal emission policies under uncertainty. The results, that imply prudent behavior due to...