We extend an open economy Ramsey model to include the technology gap to the world technology frontier. The setting is a middle income country with productivity growth driven by technology adoption and foreign capital goods stimulating spillover and catching up. The interaction of technology...

Trade openness influences the wage structure via technology adoption in middle income countries. Given the econometric challenges of handling endogenous trade and technology interaction, we offer an alternative quantification based on calibration of a general equilibrium model. We expand the...

The relationship between foreign trade openness and growth is a challenge for economic analysis. Econometric approaches struggle with endogeneity of foreign trade and trade policy and endogenous interaction between investment and productivity. We offer an alternative route to identification and...

When investigating the effects of federal grants on the behavior of lower-level governments, it is hard to defend the handling of grants as an exogenous factor affecting local governments; federal governments often set grants based on characteristics and performance of local governments. In this...

Excessive administrative spending in local governments has been a concern in the public debate in Norway. Administration takes resources away from welfare services such as primary education and care for the elderly. Since administrative spending varies considerably between local governments, a...

Vertical fiscal imbalance, decentralized responsibility of spending with centralized financing, creates a common pool problem with spending pressure towards central funds. A model of decentralized government spending under vertical fiscal imbalance is developed, and the importance of national...

Thailand has experienced economic growth well above world averages for about 40 years. It is a challenge to understand the sources of this high growth path, and in particular why growth has not slowed down with assumed decreasing returns to capital. We develop an intertemporal general equilbrium...

The barrier model of productivity growth suggests that individual country productivity is related to the world technology frontier disturbed by national barriers. We offer a country study of the barrier model exploiting the dramatic changes in the linkages to the world economy in South Africa....

The paper integrates two mechanisms of economic growth, barriers to international spillovers and skill-biased effects on the income distribution. South Africa is an interesting case study because of dramatic changes in international barriers over time and policy focus to productivity and...