Sustainability of public debt has become a major issue in the debate over the success of the European Monetary Union. The authors pursue the question of whether Germany’s fiscal policy is sustainable. With sustainability of a given fiscal policy, the authors refer to a policy that...

We present a macroeconomic growth model in which investment in physical capital exhibits positive externalities which raise the stock of knowledge. Treating physical capital and knowledge as two separate variables, we show that the model can generate endogenous growth. It is demonstrated that...

Abstract In this paper we present a model of flexicurity capitalism that exhibits a second labor market with the government as an employer of first resort, where all workers not employed by firms in the private sector find meaningful employment. We show that the model exhibits a unique interior...

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...