Rebelo's two-sector endogenous growth model is embedded within a two-country international trade framework. The two countries bargain over a trade agreement that specifies: (i) The size of the foreign aid that the richer country gives to the poorer one; (ii) the terms of the international trade...

This paper presents a model that generates a non-monotonic evolution of the return to education. The model highlights the role played by socioeconomic stratification in the joint determination of the supply of educated labor and the supply of physical capital. The recent theoretical literature...

This paper presents a model that generates a non-monotonic evolution of the return to education. The model highlights the role played by socioeconomic stratification in the joint determination of the supply of educated labor and the supply of physical capital. The recent theoretical literature...

The effect that investment lags has on the uncertainty-investment relationship is studied by modifying the Bar-Ilan and Strange (1996) model in a manner that enables analytical solution. It turns out that: (i) If the time lag is sufficiently small, uncertainty affects investment negatively; (ii)...

Often, firms can choose from different combinations of price and cost processes. For example, they can choose between different production locations or technologies, between different products to produce, or between different locations for selling them. To study the choice of the optimal...

A large number of pairs of countries exhibit a dynamic pattern in which: (i) Fertility in both countries declines across time; (ii) Initially one country has higher fertility and lower per-capita income compared to the other; (iii) In time, as per-capita income converges, fertility rates in the...