The paper investigates an economy where parents observe wage rates, interest rates, and child mortality and decide about savings and the quantity and quality of their children. Expenditure on child quality causes human capital accmulation as an external effect. If mortality is high parents...

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...

Recent empirical studies have revealed a strong impact of tax changes on corporate finance. Yet, models of economic growth usually neglect financial structure of the representative firm. In order to investigate whether the consideration of firm finance modifies the estimated outcome of capital...

Quantitative aspects of adjustment processes in economic growth remain frequently unsolved or are tackled with bulky or inaccurate methods like multiple shooting or log-linearization. Mulligan's (1991) method of time elimination, however, has improved the analysis of saddle path dynamics in...

Young adults observe the current interest rate, wage rate, and child mortality and decide about savings and the quantity and quality of their children. Human capital is produced as an external effect of expenditure on child quality and its production is subject to decreasing returns. Depending...

We present a non-linear solution method of saddlepoint dynamics in discrete time optimization problems. It is based on the backward attractivity of the stable manifold and is very easy to implement. After an introduction to the general method we present two applications. First we consider the...

Simple problems of discrete-time optimal control can be solved using a standard spreadsheet software. The employed-solution method of backward iteration is intuitively understandable, does not require any programming skills, and is easy to implement so that it is suitable for classroom exercises...

This article develops a socio-economic model that analyzes the doping decision of professional athletes. In their decision to use performance enhancing drugs athletes do not only evaluate the costs and benefits (in terms of potential rank improvement). They also take into account peer-group...

Drawing on recent research on allometric scaling and energy consumption, the present paper develops a nutrition-based efficiency wage model from first principles. The biologically micro-founded model allows us to address empirical criticism of the original nutrition-based efficiency wage model....

The present paper discusses the long-run effects of two interdependent relations between economic and population growth. According to a frequently used formulation of the population-push hypothesis, learning-by-doing effects in production lead to increasing returns to scale and, therefore, to a...