This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to realize a product innovation. Production capacities of both firms are product...

Based on a closed agent-based macroeconomic simulation model (Eurace@Unibi) this paper analyzes whether the density of social networks influences via referrals the residual wage inequality in different skill groups. It is shown that an increase in network density leads to a polarization of firms...

This paper analyzes behavior in repeatedly played two-stage games, where players choose actions in both stages according to best replies using 'level-n expectations' about the opponent's actions in both stages. Level-n expectations are recursively defined in a way that a player holding level n...

We develop a new model of trade in which educational institutions drive comparative advantage and determine the distribution of human capital within and across countries. Our framework exploits a multiplicity of sectors and the continuous support of human capital choices to demonstrate that...

This paper explores the role of pooled-producer, e.g. private label, trade intermediation in shaping the range and diversity of exports. Direct sales maintain a firm's unique product characteristics (`brand equity'), whereas trade through an intermediary can take two forms - either a wholesaling...

This paper combines the Aiyagari/Huggett–type standard incomplete markets model with the Arrow/Romer approach to growth to analyze feedback effects between growth and inequality, both endogenously determined in equilibrium. We derive conditions on existence/ nonexistence of balanced growth...

In this paper we analyse a growth model that includes environmental and economic variables as well as technological progress under different informational constraints on the behavior of economic agents. To simulate the informationally constrained economy, we make use of the non-linear model...

In this note we theoretically investigate the question of whether the relationship between public debt and economic growth is characterized by an inverse U-shaped functional form. Starting point of our analysis is the paper by Checherita-Westphal et al. (2012) who present an endogenous growth...

This paper examines the consequences of international financial integration in a two-sector heterogeneous-agent dynamic general equilibrium model of occupational choice with financial constraints and idiosyncratic risks. We discuss the macroeconomic and distributional effects of financial market...

Testing the reaction of the primary surplus to variations in public debt, relative to GDP respectively, has been frequently resorted to in order to test for sustainability of a given debt policy. In this contribution, we analyze theoretically under which condition a positive reaction of the...