This paper introduces wealth-dependent time preference into a simplemodel of endogenous growth. The model generates adjustment dynamics in linewith the historical facts on savings and economic growth in Europe from the HighMiddle Ages to today. Along a virtuous cycle of development more wealth...

This paper proposes a model that links households and firms, as usual, by markets forfactors and goods and, additionally, by a banking sector that channels households’funds to firms and eliminates idiosyncratic risk. In equilibrium, agency costs and taxbenefits of corporate debt are equalizing...

Taxes on inheritances may induce heirs to discontinue family firms. Becausefirm dissolution incurs transaction costs, a preferential tax treatment of transferredfamily businesses seems to be desirable from a macroeconomic viewpoint.The support of dynastic succession, however, entails also a cost...

Does it make us unhappier when we compare our consumptionwith that of the Joneses or our own past achievements? This paper tries ananswer by bringing together two disparate literatures: the macro (growth)theory on habit formation and the applied literature related to the Easterlinparadox. Using...

In this paper we analyze the distribution of fertility rates across theworld using parametric mixture models. We demonstrate the existence of twinpeaks and the division of the world's countries in two distinct components: ahigh-fertility regime and a low fertility regime. Whereas the signicance...

This study provides a unied growth theory to correctly predictthe initially negative and subsequently positive relationship between child mortalityand net reproduction observed in industrialized countries over the courseof their demographic transitions. The model captures the intricate...

This paper theoretically investigates how community approval or disapprovalaects school attendance and child labor and how aggregate behavior of thecommunity feeds back towards the formation and persistence of an anti- (or pro-)schooling norm. The proposed community-model continues to take...

This article investigates economic performance when enforceable propertyrights are missing and basic needs matter for consumption. It suggests anew view of the so-called voracity eect according to which windfall gains inproductivity induce behavior that leads to lower economic growth. Takinginto...

In an inuential article Tornell and Lane (1999) considered an economy populatedby multiple powerful groups in which property rights in the formal sectorof production are not protected. They obtained conditions under which thegroups appropriate output from the formal sector in order to invest it...

The output multiplier turns negative before a deficit spending program expires.We show the generality of this unpleasant finding for the standard real business cyclemodel. We then calibrate an extended model for the US and demonstrate how fiscalstimulus slows down economic recovery from...