Two modifications are introduced into the standard real-business-cycle model: habit preferences and a two-sector technology with limited intersectoral factor mobility. The model is consistent with the observed mean risk-free rate, equity premium, and Sharpe ratio on equity. In addition, its...

"Unfunded state pension schemes are projected to become financially unsustainable. This is usually attributed to demographic trends. Yet trends in unemployment and in female labour force participation are quantitatively as important. Improvements in either or both might be sufficient to rescue...

I study an overlapping generations model where physical and human capitals are used in production and can be accumulated by withholding resources from current consumption. Human capital is accumulated through a schooling system which can be finance either by private expenditures or by taxes on...

In this paper I consider an OLG model with production and a single commodity. I show that in such an environment unbounded growth of income per capita is not possible if the aggregate technology is of the usual constant returns to scale type. This is not due to lack of productivity of the...