The paper investigates per capita income convergence across Chinese provinces over 1978-1992 period. If confirms previous studies which find a reduction in inter-regional income inequality over the course of economic reforms. However, the rate of convergence has declined since 1985 as a result...

This paper surveys the recent literature on fiscal sustainability, with particular emphasis on emerging market countries. It discusses the main elements that differentiate emerging market countries from industrial countries and then discusses how probabilistic models can help to evaluate fiscal...

We show that a simple and intuitive three-parameter equation fits remarkably well the evolution of the gross domestic product (GDP) in current and constant dollars of many countries during times of recession and recovery. We then argue that this equation is the response function of the economy...

We consider a small open Harris-Todaro (1970) econmy with special emphasis on informal sector and open urban unemployment.The simultaneous existence of informal sector and urban unemployment is explained in terms of efficiency-wage relation. We examine the efficacy of subsidy policy to the urban...

Benabou (2002) strengthens the so-called Efficient Redistribution Hypothesis (ERH) by demonstrating how income redistribution can promote growth and welfare by mitigating economic waste from resource misallocation that is caused by credit market frictions to production, which is subject to...

Parental education largely determines a child's opportunity to learn. However, a higher level of trust and a higher frequency of social interactions between adults with significantly different educational attainments shrinks the knowledge-gaps among the adults, making their human capital more...

Investment decisions are usually affected by what firms perceive as government supply constraints: when a firm considers whether to increase its capital stock it takes into account possible constraints due to the lack of public productive services. Introducing this consideration in a simple...

The paper analyses the impact of tax competition on innovation in the public sector. It is shown that the effects of increased mobility of the tax base on innovation and growth are ambiguous. The negative relationship is more likely, however. Moreover, it is shown that a Leviathan government may...

This paper examines the effects of taxation of human capital, physical capital and foreign assets in a multi-sector model of endogenous growth. It is shown that in general the growth rate is reduced by taxes on capital and labor (human capital) income. When the government faces no borrowing...

So-called "uphill capital flows", i.e. flows of physical capital from relatively poor to rich countries, are a new phenomenon with yet unclear impact. We develop a unified framework incorporating economic institutions, human capital and physical capital to study the interaction of international...