We explore the link between wealth inequality and output fluctuations in a general two-sector neoclassical growth model with endogenous labor and heterogeneous agents. When agents have homogeneous CRRA preferences and individual wealth is Pareto distributed, a sufficiently large rise in the Gini...

This paper studies issues related to global economic growth, trade patterns and elastic labor supply with capital accumulation and knowledge creation. Trade patterns among countries are determined by free competition and knowledge accumulation is through learning by doing. This study considers...

We prove the existence of competitive equilibrium in a single-sector dynamic economy with heterogeneous agents and elastic labor supply. The method of proof relies on exploiting the existence of Lagrange multipliers in infinite dimensional spaces and the link between Pareto-optima and...

The first two sections of the paper are devoted to a combination of Kuznets and structuralist stories, where we ask how the agricultural/nonagricultural terms of trade and income distribution must adjust to permit both savings and investment and commodity market balance to be assured. It will be...

This paper analyzes the effects of technological risk on long–run growth when labor supply is elastic and production gives rise to a pollution externality. For the social planner as well as for the market economy we show that the randomness of production as well as the endogeneity of labor...

We investigate Matsuyama's (Econometrica, 72, pp. 853-84, 2004) model modi- fied only to include endogenous and forward looking labor supply decision. Young agents supply one unit of labor endowment elastically to a competitive labor market. While, old agents of ex-ante identical individuals are...

Recently, Park (2009, Economic Theory 39, 377--398) extended the Barro endogenous growth model (1990) by assuming that tax rate is optimally chosen by the government and labor supply is elastic. Park claimed to have proved the existence of multiple balanced growth paths that exhibit zero growth...

The paper extends the canonical representative agent Ramsey model to include heterogeneous agents and elastic labor supply. The welfare maximization problem is analyzed and shown to be equivalent to a non-stationary reduced form model. An iterative procedure is exploited to prove the...

This paper shows conditions under which a marginally progressive income tax emerges as the outcome of political competition between two parties, when labor is elastically supplied and candidates are uncertain about voters' choice at election day. Assuming the elasticity of labor is decreasing on...

This paper proves the existence of competitive equilibrium in a single sector dynamic economy with heterogeneous agents and elastic labor supply. The method of proof relies on some recent results concerning the existence of Lagrange multipliers in inï¬nite dimensional spaces and their...