In this paper we analyze the implications of status-preference, modeled as relative wealth, for the current account in a small open economy framework with capital stock dynamics. We demonstrate that the transitional dynamics of the economy is characterized by two distinct speeds of adjustment: a...

This paper reviews how the impact of taxes on the incentive to invest in the corporate sector can be measured. The main focus of the paper is to discuss measures derived from economic theory. In empirical work, these tend to be based on the legal parameters of tax regimes, rather than on...

This paper investigates determinacy of equilibrium in a canonical New Keynesian model under different monetary and fiscal policy rules. It is shown that a simple monetary rule that responds aggressively to inflation is a necessary condition for equilibrium determinacy, when fiscal policy is...

This paper explores individual motives for volunteering: The analysis is based on the interpretation of volunteering as a consumption good (consumption model) or as a mean to increase individual’s own human capital (investment model). We present an econometric framework taking into account...

Microborrowers may take usurious loans to repay a loan taken from a micro nance institution because of having neglected the time inconsistency of optimal plans or having discounted future payoffs too strongly from the ex-post perspective. Microfinance programs should strive at preventing such...

The paper develops a model of firm´s investment under uncertainty with financial market imperfections and analyzes the effects of financial constraints on firm´s investment. Firm´s investment is an increasing function of the firm´s marginal q, however the investment function is characterized...