We explore a dynamic commons problem and assess the welfare consequences of access to capital markets. The commons has a high intrinsic rate of return but its fruits cannot be secured by individual agents. Capital market access allows resources to be held securely and intertemporally...

We obtain an inequality for th esmaple varaince of a Brownian motion on [0,1] and an associated Ornstein-Uhlenbeck process. The result is applied to a regression involving a near-integrated regressor, and establishes that in the limit the dispersion of the least squares estimator is greater in...

Economic history provides many examples of situatio where workers resist the adoption of new technologies, but also of situations where expansion is resisted by entrepreneurs. This paper starts with the hypothesis that this resistance is a rational response to anticipated effects on the...

In a simple overlapping generations set-up, faster nominal money growth is found to squeeze labour and divert savings towards physical capital. Its net effect on both output and welfare is ambiguous. The main variable that can resolve these ambiguities is the profit share in income: the lower...

Faster population growth lowers steady-state utility per head in simple Ramsey and Solowian growth models. In overlapping generations models, however, it always raises utility per head in the steady state when money is the sole asset.

Regional integration affects location decisions of MNCs and therefore influences each member country’s provision of investment incentives, which in turn may trigger relocation. As a consequence, subsidy competition increases as integration proceeds. We analyze the welfare consequences of this...

In a small open economy with heterogeneous firms, in which tariffs determine the mass of active firms, free trade optimality depends positively on the level of firm heterogeneity and negatively on transportation costs. The benefits from temporary protection depend on the level of backwardness:...

A macroeconomic model with endogenous credit constraints due to a moral hazard problem in lending is developed. There are two sequential borrowing decisions; first, an agent may wish to borrow to become educated and secondly, an educated agent may wish to borrow to become an entrepreneur. The...