We construct a tractable endogenous growth model with production externalities in which the public capital stock augments investment specific technological change. We characterize the first best fiscal policy and show that there exist several labor and capital tax-subsidy combinations that...

We study a model of human capital driven growth, where the parent's human capital serves as a productive input in the child's human capital production only when that of the former exceeds a minimum level required to intellectually contribute to the child's learning. Private and public...

We study the sectoral allocation of public infrastructure investments in the agriculture and manufacturing sectors in India. In addition to the changing employment and output shares of these two sectors, the capital output ratio in agriculture in India has fallen, while it has risen in...

We present a model of optimal government policy when policy choices may exacerbate socio-political instability (SPI). We show that optimal policy that takes into account SPI transforms a standard concave growth model into a model with both a poverty trap and endogenous growth. The resulting...

Is it politically feasible for governments to engineer endogenous growth? This paper illustrates two reasonable political decision mechanisms by which fiscal policy generates endogenous growth with a single accumulable factor, under a constant returns to scale production technology, and without...