In this paper, we present a model of labor search in order to assess the role played by unemployment benefits in the increase of European unemployment since the mid 70's. Our main finding is that although benefits may reduce unemployment, they increase the vulnerability of the economy to...

In this paper we are concerned with the equilibrium dynamics of a two-sector model of endogenous growth with distortionary taxes. We show that for certain parameters values and tax schemes every equilibrium orbit--except the steady state solution--is non-interior; i.e., there are times in which...

Shocks to investment-specific technology have been identified as a main source of U.S. aggregate output volatility. In this paper, we present a model with frictions in the labor market and explore the contribution of these shocks to the volatility of labor market variables, namely, unemployment,...

In this paper, the authors analyze the speed of convergence to a balanced path in a class of endogenous growth models with physical and human capital. They show that such rate depends locally on the technological parameters of the model but does not depend on preferences parameters. This result...