One of the central hypotheses of the neoclassical growth literature is the balanced- growth hypothesis, which predicts that output, consumption, and investment grow at the same rate. Empirically, this implies that the consumption-to-output ratio and the investment-to-output ratio must be...

In an R&D-driven growth model with asymmetric fundamentals the steady state equilibrium R&D investments are industry-specific and they are such that R&D returns are equalized across industries. Return equalization, however, makes investors indifferent as to where to target research and, hence,...

It is often argued that rigid labour market and centralized bargaining are harmful employment and growth. This paper looks at the case of Nordic countries as a counter-example pointing to some weaknesses of this view. Rigid labour markets, while reducing the offer of low quality jobs, increase...

We analyze the paradox of thrift in a two-sector Kaleckian growth model. We consider an economy with one consumption and one investment good, differential sectoral markups, and profit rates equalization. We show that when the investment function depends on aggregate capacity utilization and on...

We analyze the paradox of thrift in a two-sector Kaleckian growth model. We consider an economy with one consumption and one investment good, differential sectoral mark-ups, and profit rates equalization. We show that when the investment function depends on aggregate capacity utilization and on...

We adopt a standard search and matching model with endogenous job destruction to investigate two issues. First, we use a simplified version of Boeri and Burda (2009) to show that at sufficiently low levels of wage share, centralized wage bargaining performs better than decentralized bargaining...