We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a...

This paper models the relationship between growth, technology-lifetime, entry, and competition in a vintage-knowledge model of endogenous growth and perfect competition. The model has a unique steady state REE equilibrium. Variations of R&D-efficiency lead to a negative relation between growth...

In this paper it is shown that money can matter for macroeconomic stability under interest rate policy, if transactions frictions are specified in a consistent way. We develop a sticky price model with a shopping time specification, which induces the marginal utility of consumption to depend on...

We study the consequences of non-neutrality of government debt with respect to aggregate demand for short-run macroeconomic stability and for fiscal-monetary policy interactions in an environment where prices are sticky. Assuming either transaction services of government bonds or partial debt...

This model analyses the interaction between inflation and the long-run levels of employment and output growth in a Schumpeterian growth model with quality improving innovations under nominal price rigidity. At the unique REE steady state equilibrium, both employment and growth are hump-shaped...

This letter investigates the presence of asymmetric dynamics in the behaviour of the current account as emphasized in recent theoretical contributions. We estimate a Markov switching model for long-horizon current account to GDP data for six countries and find substantial asymmetries in the...

This paper assumes that human capital not only generates market incomes but is a direct source of utility as well. In an otherwise standard framework it is shown that the interaction between human capital and effort in raising human capital and in generating utility naturally leads to...

This paper analyzes a market with three firms. One of them is the dominant firm and the two others are fringe firms. The formulation of demand allows a comparison between price competition with heterogeneous and homogeneous products. Because a parameterization is required to assure that market...

In this article we analyze firms investment incentives in liberalized electricity markets. Since electricity is economically non storable, it is optimal for firms to invest in a differentiated portfolio of technologies in order to serve strongly fluctuating demand. Prior to the Liberalization of...

We experimentally examine the impact of self-inflicted neediness on the solidarity behavior of subjects. In one treatment in our solidarity experiment all subjects face the same probability of becoming needy, in the other treatment subjects have the choice between a secure payment and a lottery...