This paper analyzes the effects of changes in government expenditures on both a domestically produced and an imported good in an open economy based on intertemporal optimizing behavior. The dynamic adjustment is characterized in detail and the critical role played by the accumulating capital...

It is shown that for a small open economy the welfare effects of a tariff on the import of the brands of a differentiated good depends crucially on the pattern of trade. The literature has shown that welfare rises when the domestic brands are nontraded. But when the domestic brands are traded,...

This paper looks at the conditions under which we may have welfare improving capital accumulation in two-sector two-period overlapping generations models. It is found that both the usual conditions of the rate of interest exceeding the population growth rate and profits exceeding investment may...

I look at the existence of asset bubbles in a monopolistically competitive dynamic macroeconomic model. The positive predictions of te model are very similar to Tirole's competitive model. But the welfare effects are very different - in that as capital gets crowded out, welfare falls. The...

In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive mar- gin. We find numerically that a model...

In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive margin. We find numerically that a model...

In this paper debt policy in a two-period, two-sector overlapping generations model with Leontief technologies has been analysed. It has been found that debt, issued to transfer resources to the initially old, could be welfare improving in the new steady state for an economy which satisfies the...

This paper explores the steady state welfare implications of permanent transfers in a two-country, two-sector overlapping generations model. At the golden rule and with Walrasian stability, we demonstrate that the change in the (static) terms of trade always works in favor of a transfer paradox....

In a dynamic general equilibrium model with endogenous markups and labor market frictions, we investigate the effects of increased product market competition. Unlike most macroeconomic models of search, we endogenize the labor supply along the extensive margin. We show that beneficial effects in...