This paper proposes a theory for the evolution of knowledge diffusion and growth over the very long run. A feedback mechanism between capital accumulation and knowledge spillovers creates a unified growth theory that explains a long epoch of (quasi-) stasis and an epoch of high growth linked by...

This paper first replicates Basu and Fernald's (1995) US results to find no externalities from aggregate West German manufacturing to gross industry output changes and approximately constant internal returns to scale. However, when we distinguish between upswings and downturns in aggregate...

A neoclassical growth model is augmented by a corporate sector, financial intermediation, and a set of tax rates. In this setting, capital structure is determined by the interplay between an advantage of debt finance resulting from the tax system and a disadvantage resulting from asymmetric...

Macroeconomic studies of tax policy in dynamic general equilibrium usually assume that reforms hit the economy unexpectedly and last forever. Here, we explore how previous results change when we allow policy changes to be pre-announced and of finite duration and when these facts are anticipated...

This article shows within a simple growth model how the make up of society affects economic performance when property rights are unenforceable. It investigates behavior of non-cooperative social groups that consume, produce, and appropriate resources either peacefully or through contest. For the...

The natural sciences have established a general scaling law that relates metabolism and body size of animals. Recently this association - known as Kleiber's law - has received deep theoretical foundation by network theory and has been fruitfully applied to explain various biological phenomena,...

We develop a simple model of labor market participation, human capital degradation, and re-training. We focus on how non-participation, as a distinct state from unemployment and employment, is determined by the welfare system in interaction with labor market conditions and personal...

Inheritance taxes may induce heirs to discontinue family firms. Because firm dissolution incurs transaction costs, a preferential tax treatment of transferred family businesses seems to be desirable from a macroeconomic viewpoint. The support of dynastic succession, however, entails also a cost...

This paper analyses the long-run effects of Estonia’s 2000 Income Tax Act with a dynamic general equilibrium model. Specifically, we consider the impact of the shift from an imputation system to one where companies only pay taxes on distributed profits. Balanced growth paths, transitional...

We apply the a nonparametric method of kernel regression on a dataset for 109 countries to estimate the income fertility nexus in demo-economic transition. The results suggest the existence of a critical level of per capita income above which fertility decreases exponentially with rising income....