In this paper we present an economic model of optimal consumption and labor supply where we assume that working may generate stress that affects the well-being of the representative individual. As to stress we posit that it is influenced by cumulated past labor and capital. The latter reflects...

This paper responds to the development policy debate involving the World Bank and the IMF on the use of fiscal policy not only for economic stabilization but also to promote economic growth and increase per capita income. A key issue in this debate relates to the effect of the composition of...

In this paper we analyze dynamic incentives of a firm to invest in production facilities in a less developed country with lower wage costs and lower productivity. Foreign investment induces that, due to technological spillovers, productivity of local firms in the foreign country increases. Firms...

This paper presents a model of economic growth with unemployment due to labor market rigidities. The economy consists of a firm that maximizes profits, of a government and of two types of households that maximize inter-temporal utility. One household supplies skilled labor at the first labor...

This paper studies effects of fiscal policy in an endogenous growth model with human capital and heterogenous agents. Two types of households are considered. One household acquires human capital or skills through education while the other household remains unskilled. Sustained growth is the...

A two-sector growth model with endogenous technical change is presented. Concerning technical change, we assume that it is reflected by increases in the stock of human capital which are acquired through learning by doing. As a result, it turns out that transitory or, using the Hopf bifurcation...