Investment decisions are usually affected by what firms perceive as government supply constraints: when a firm considers whether to increase its capital stock it takes into account possible constraints due to the lack of public productive services. Introducing this consideration in a simple...

A growth model of a developing economy facing an upward sloping supply curve of debt is analyzed. Equilibrium is characterized by transitional dynamics in which consumption, capital, and debt converge to a common growth rate. The adjustment is through the debt-capital ratio, which drives the...

The U.S. went through a remarkable structural transformation between 1800 and 2000. In 1800 the majority of people worked in agriculture. Barely anyone did by 2000. What caused the rapid demise of agriculture in the economy? The analysis here concentrates on the development of new consumer goods...

This paper studies the effects of distortionary taxes and public investment in an endogenous growth OLG model with knowledge transmission. Fiscal policy aspects growth in two respects: first, work time reacts to variations of prospective tax rates and modifies knowledge formation; second, public...

Because the returns to successful industrial research generally enjoy a larger scale economy than that to successful scientific research, this paper shows that while economic integration increases R&D employment, it may not raise the rate of long-run economic growth due to the shift of resources...

In a standard exhaustible resource model, it is known that if, along a competitive path, investment in the augmentable capital good equals the rents on the exhaustible resource (known as Hartwick's rule), then the path is equitable in the sense that the consumption level is constant over time....

In this paper we analyze qualitatively and quantitatively the potential effect of the EU accession on the development of several Central and Eastern European (CEE)countries (specifically, the Czech Republic, Hungary, and Poland). To achieve the task we design a small open economy version of the...

Because of its inappropriability, protection of property rights is widely recognized as being the state's responsibility. Moreover, recent empirical evidence suggests that it leads to higher investment levels and faster growth. Nevertheless, the extent of property rights protection differs...

I develop a model for a small, open, technology-lagging economy that imports leading-edge knowledge from the technology leader by paying high-skilled researchers from the leading country their opportunity cost to train the lagging country's future high-skilled workers while adding to a local...

A growth model is presented that examines i) the creation of skill-biased knowledge through invention (defined here as additions to leading-edge knowledge) and ii) its diffusion to adoptive knowledge through innovation (defined here as later applications of knowledge to low cost production...