The fixed effects (FE) estimator of "conditional convergence" in income based dynamic panel models could be biased downward when capital adjustment cost is present. Such a capital adjustment cost means a rising marginal cost of investment which could slow down the convergence. The standard FE...

A surprising cross country stylized fact is that a higher public spending on education tends to lower the long run per capita growth rate and schooling returns. This is contrary to the conventional wisdom that education is a major driver of growth. In this paper, we revisit this issue and try to...

We compare the welfare costs of tax distortions of labour supply in one and two member household discrete and continuous labour supply (leisure consumption) choice models. In the discrete models taxes induce a large response from a subset of the population, while the majority of the population...

This paper finds empirical support for a Taylor (1993) type interest rate determination rule. The model is solved analytically, estimated and used for simulation, impulse response analyses and forecasting with quarterly time series data for the UK and annual time series data for Germany, France,...

The productivity of capital and the discount rate for future consumption are more important for economic growth than the cost of financial intermediation. Using analytical and numerical illustrations from a version of the Ramsey model this study illustrates how parameters of preferences in...

With a dynamic computable general equilibrium model with Pissarides and Mortensen and Pissarides type equilibrium unemployment, impacts of tax-transfer programmes are assessed for the UK. The model contains more desirable structure of households and production sectors and includes more type of...