Abstract An expression for the welfare cost of a marginal increase in the public debt is derived using a simple AK endogenous growth model. This measure of the marginal cost of public funds (MCF) can be interpreted as the marginal benefit-cost ratio that a debt-financed public project needs in...

Abstract Different industrializing experiences beginning on innovation or education could be explained not only by different structural parameters or policies but also by differences in factor endowments. In this paper, we consider an endogenous growth model with physical capital, human capital...

Is it politically feasible for governments to engineer endogenous growth? This paper illustrates two reasonable political decision mechanisms by which fiscal policy generates endogenous growth with a single accumulable factor, and a constant returns to scale production technology without...

Abstract This paper extends a model of endogenous growth through the introduction of a component of knowledge that makes new technologies more productive than older vintages. Creative destruction or obsolescence of technologies underlies the growth process. In this setup, the growth effects of...

Abstract Conventional endogenous growth theory relies on the assumption of constant returns to "broad capital". As Solow pointed out, the strength of this assumption is revealed by recognizing that even the slightest touch of increasing returns creates explosive growth: infinite output in finite...

Multi-product firms dominate production activity in the global economy. There is widespread evidence showing that large corporations improve their efficiency by increasing the scale of their operations; this objective can be realized either by consistently investing in R&D or by expanding the...

Abstract Credit-constrained households must use savings both to smooth consumption and to finance productive investments. This non-separability between consumption and production decisions is ignored in the standard intertemporal buffer-stock consumption model where income growth is exogenous....

Abstract In comparison to the standard literature on inequality and growth which assumes the former to be exogenous, we formulate a model in which inequality and growth are both endogenous. Long-run distribution, at least locally, is shown to be independent of the initial distribution of factor...

Abstract This paper analyzes some unnoticed predictions of the two-sector AK model in line with the recent literature on embodied technical change. Firstly, by confining constant returns to capital to the investment sector, the AK model generates endogenously the secular downward trend of the...

Does economic justice stymie economic development? This paper demonstrates that sustainability is compatible with Rawlsian intertemporal justice, even when considering human capital and natural resources. The methodology employed herein extends and amends previous works that (1) do not consider...