Using a public finance approach, this study investigates welfare costs between seignorage and consumption taxes in a standard growth model. One of these two taxes is used to finance exogenous public spending to balance the government budget. The steady-state welfare cost of consumption taxes is...

We construct a uni…ed framework to study under what conditions one of the three frequently observed organizational structures of international middle-product production may arise in equilibrium: (i) separation of upstream and downstream …firms with middle-product trade, (ii) vertical...

We extend Antras and Helpman (2004) on firm heterogeneity and organizational choice to a dynamic setting with FDI uncertainty, in which the probability of investment failure decreases with the host country's infrastructure level and increases with the technological complexity facing each firm....

The past 30 years have witnessed lower employment rates and lower hours worked per worker, and thus lower hours worked per person, in Europe relative to the US. European countries have more regulated labor market then the US. This paper envisages the role the labor market regulation plays on the...

This paper incorporates risk into the FDI decisions of rms. The risk of FDI failure increases with the gap between the South's technology frontier and the technology complexity of a firm's product. This leads to a double-crossing sorting pattern of FDI firms of intermediate technology levels are...

This paper builds a dynamic model to examine the two-way interaction between FDI and the South's technology frontier. Inferior technology capacity in the South generates risk of production failure, which discourages inward FDI with high technology content. Only if the risk is not prohibitive...

This paper studies the optimal factor tax incidence in a neoclassical growth model with a given share of government expenditure in output. In the Ramsey planner’s optimization, the effect of next period’s capital on government expenditure equals the given share of the marginal product of...

This paper considers leisure externalities in a Lucas (1988) type model in which physical and human capital are necessary inputs in both sectors. In spite of a non-concave utility, the balanced growth path is always unique in our model which guarantees global stability for comparative-static...

This paper studies the optimal factor tax incidence in a standard two-sector, human capital-based endogenous growth model elucidated by Lucas (1988). Capital income taxes generate dynamic inefficiency for capital accumulation and labor income taxes create dynamic inefficiency for human capital...