All over Europe, ageing populations threaten nations' financial sustainability. In this paper we examine the potential of immigration to strengthen financial sustainability. We look at a particularly challenging case, namely that of Denmark, which has extensive tax-financed welfare programmes...

This paper analyses the effects of cuts in the marginal tax rates on income from labour and capital on the macroeconomy and on the intergenerational distribution of welfare in a small open economy. For this purpose we set up a computable general equilibrium model incorporating overlapping...

In Weitzman's 1983 paper on alternative compensation systems he proves that all compensation ssytems have the same long run equilibria. Weitzman defines long run equilibrium as the equilibrium in which the wage rate is perfectly flexible and the labor market is frictionless. Weitzman infers that...

The behavior of a monopoly union in a model with optimizing agents and growing endogenous capital stock is analyzed. It is shown that the stationary state of the economy is the walrasian stationary state. Thus any unemployment is temporary. Further it is shown that unemployment may prevail...

In this paper we consider a model where agents optimize intertemporally and in which there is imperfect competition in the market for consumer goods. The labor market is one of perfect competition and there is exogenous labor supply. In other factor markets there may or may not be imperfect...

This article introduces investments into the discussion of the properties of the share economy. We show that gross profit sharing gives biased incentives to the owners of the firm such that the stationary state capital stock is lower than in the wage economy when the payment to the workers is...

Recent tax reforms in the OECD area have aimed at reducing the progressivity of the labour income taxation. The present analysis seeks to evaluate the effects of such reforms both theoretically and empirically for the case of Denmark. The theoretical general equilibrium model contains a dual...