In this paper we present an inter-temporal optimization problem of a representative R&D firm that simultaneously invests in horizontal and vertical innovations. We posit that learning-by-doing makes the process of quality improvements a positive function of the number of existing technologies...

The paper considers the transition of an economy from non-renewable to renewable energy. The Hotelling theorem suggests to extract a non-renewable resource in an optimal way such that the resource tends to be depleted when optimally extracted. Yet, it might not be reasonable to deplete...

Agricultural commodities, here considered as renewable products, are critical to many developing countries. Not only are their prices rising, along with price volatility on both spot and future markets, but also an increasing financialization of these products is making itself felt. All this may...

With this paper our objective is to study the effects of different deficit policies in an endogenous growth model with publicly funded human capital accumulation and public debt, where we allow for heterogeneous households. Two types of households are considered. One household acquires human...

The European Union has set up a fund in order to compensate countries for damages resulting from COVID-19 that hit the economies in an asymmetric way. We argue that payments should be based only on relative damages, expressed as losses relative to GDP, and any distribution mechanism implying...

In this paper we develop an economic growth model that includes anthropogenic climate change. We explicitly include a research sector that creates new technologies and simultaneously expands productivities of existing technologies. The environment is affected by R&D activities both negatively,...

In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacrifice theory can be used to determine the compensation payments...

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...