We study the effects of stylized fiscal policy rules on the (global) determinacy of rational expectations equilibrium in perfectly competitive monetary model with constant returns to scale and labor as the unique input. Government spending on transfers and/or demand implies a distortion of the...

This paper tackles a number of issues that are central to cross-country comparisons of productivity. We develop a "dual" method to compare levels of total factor productivity (TFP) across nations that relies on factor price data rather than the data on stocks of factors required by standard...

The transition from unfunded pensions may impose a double burden on a transitional generation, which must both pay taxes to finance current pension liabilities and save for their own retirement. There are also economic gains which will accrue to future generations from increased rates of savings...

This paper looks at some consequences of a comittment to wage equality in some sectors of the economy which produce lumpy consumer goods. We show that in this setting, there are two equilibria, with high or low wages, incomes and output. In this closed economy, growth may be immiserizing. We...

We set up a probabilistic voting model to explore the hypothesis that tax competition improves public sector efficiency and social welfare. In the absence of tax base mobility, distortions in the political process induce vote-maximising politicians to create rents to public sector employees....

The paper provides an intuitive explanation - seen from an efficiency point of view - of the optimal commodity tax structure as the result of a trade-off between two objectives: 1) the objective of maintaining the first-best pattern of consumption of produced commodities, and 2) the objective of...

This paper studies the short-run transmission of foreign shocks in a small open economy with capital controls and a fixed exchange rate. Capital controls alter the transmission of shocks because endogenous changes in the domestic nominal interest rate affect savings and investment decisions. The...

This paper proposes a unifying framework for theories of capital tax competition, and surveys and synthesizes the literature within this framework. The synthesis covers various standard tax competition models, models allowing for leviathan governments and democratic elections, in addition more...

Semi-endogenous models and, to some extent, also Schumpeterian models are based on the assumption of diminishing returns to R&D. This paper shows that the null hypothesis of constant returns to R&D cannot be rejected for the OECD countries.

This paper sets up a dynamic general equilibrium model to study how the composition of technical progress affects the asymptotic speed of convergence. The following questions are addressed: Will endogenizing a fraction of the productivity increases as coming from learning by investing help to...