An implicit rationale for a bank reserve requirement is that a central monetary authority is in a unique position (as quot;social planner) to impose a quot;socially superiorquot; outcome to that yielded by a free banking system. We illustrate how this can be true in the context of a simple...

We develop a model of learning by doing in human capital formation in the presence of allocative inefficiencies. The inefficiencies are a result of lobbying by firms to establish, or prevent, barriers to the perfectly competitive allocation of factors of production (labor). It is shown that...

An implicit rationale for a bank reserve requirement is that a central monetary authority is in a unique position (as "social planner) to impose a "socially superior" outcome to that yielded by a free banking system. We illustrate how this can be true in the context of a simple economy modeled...

We consider a neoclassical growth model with risky investment projects in which a borrower's (an investor's) risk type is private information. Our innovation is to determine jointly the equilibrium loan contract and the economy's growth path and the steady state capital stock. We show that as...

Until recently, economists have tended to ignore what Jack Hirshliefer calls "the dark-side way of confiscation, exploitation, and conflict." That is to say, economists have tended to ignore how societies or political regimes choose to allocate resources over productive activities and...

The empirical evidence on the causal relationship between international trade and economic growth is inconclusive. While some studies show that trade leads to growth, others have pointed to a reverse causation. In this paper we develop a model of international trade and productivity growth in...

This paper analyzes the role of expenditures on property right protection within a standard quality ladder model of endogenous growth. We develop a model where quality of each good improves as a result of innovation. Once the innovator develops a higher quality good there is an exogenously given...