This paper links the two fields of “development traps” and “brain drain”. We construct a model which integrates endogenous international migration into a simple growth model. As a result the dynamics of the economy can feature some underdevelopment traps: an economy starting with a low...

We investigate whether a government should lead an activist policy in a rigorous utility maximizing framework under rational expectations. The economy is a monetary one with preset wages, and is subject to both demand and supply shocks. It is assumed that the government can never act on the...

It has often been found difficult to generate a liquidity effect (i.e., a negative effect of monetary injections on the nominal interest rate) in the traditional "Ricardian" stochastic dynamic model with a single infinitely lived household. We show that moving to a non-Ricardian environment...

The fiscal theory of the price level says that the price level can be made determinate if thegovernment uses fiscal policies such that government liabilities explode unless the price inthe first period is at the “right” level. The policy implications are disturbing, as they callfor rather...

We investigate whether a government should lead an activist policy in a rigorous utility maximizing framework under rational expectations. The economy is a monetary one with preset wages, and is subject to both demand and supply shocks. It is assumed that the government can never act on the...

This paper links the two fields of 'development traps' and 'brain drain'. We construct a model which integrates endogenous international migration into a simple growth model. As a result the dynamics of the economy can feature some underdevelopment traps: an economy starting with a low level of...

The Taylor principle is quite usually considered as a central condition for price determinacy. Recently, however, this has been questioned on several grounds, notably because (i ) this condition is a condition for local determinacy, not global determinacy (ii ) it has been derived in...

The fiscal theory of the price level says that the price level can be made determinate if the government uses fiscal policies such that government liabilities explode unless the price in the first period is at the "right" level. The policy implications are disturbing, as they call for rather...

The Taylor principle is quite usually considered as a central condition for price determinacy. Recently, however, this has been questioned on several grounds, notably because (i) this condition is a condition for local determinacy, not global determinacy (ii) it has been derived in "Ricardian"...