This paper investigates the structural relation between the italian weak macroeconomic performances and the productivity decline experienced over the last fifteen years, estimating a Dynamic Stochastic General Equilibrium (DSGE) model. Modifying Ireland and Schuh's (2008) two-sector RBC model in...

We construct a two-sector growth model to show that sector biased technical change is the only fundamental driving force of perpetual structural change and non-balanced sectoral growth. The direction of sector biased technical change depends exclusively on the sectoral difference in the purely...

Using a tractable dynamic general equilibrium model, this paper analyzes the interaction between the important roles of consumption tax: Redistribution, static and dynamic distortion. In particular, the novel is to provide the sharp implications for resource allocation, aggregate dynamics and...

We construct a multi-agent system (MAS) model of cyclical growth in which aggregate fluctuations result from variations in activity at firm level. The latter, in turn, result from changes in the state of long run expectations (SOLE) or “animal spirits” and their effect on firms' investment...

The average labor productivity, ALP, growth rates have declined among developed countries since around 2005. We argue that the declines were caused by the universal technological stagnation, which is reflected in the relative investment price movements. In the last decade, the declines of the...

This paper shows that the consumption-based capital asset pricing model (C-CAPM) with low-probability disaster risk rationalizes pricing errors. We find that implausible estimates of risk aversion and time preference are not puzzling if market participants expect a future catastrophic change in...

While it is widely recognized that the development of a sound financial system may contribute to foster economic growth, the relation between economic growth and financial activities is complex. In this perspective, our contribution investigates the existence of threshold effects in the...

Based on a dynamic general equilibrium model we study how the composition of technical progress, along three dimensions, affects transitional dynamics, with an emphasis on the speed of convergence. The three dimensions are, first, the degree to which technical change is embodied, second, the...

In the aftermath of World War II, the world's economies exhibited very different rates of economic recovery. We provide evidence that those countries that caught up the most with the U.S. in the postwar period are those that also saw an acceleration in the speed of adoption of new technologies....

Competition among banks promotes growth and stability for an economy with production externality. Following Arrow and Debreu (1954), I formulate a standard growth model with externality — a two-period version of Romer (1986) — as a game among consumers, firms, and intermediaries. The...