A common assumption in literature dealing with the lifecycle profile of human capital is that individuals decide every period on the investment in their human capital, i.e., schooling and training. However, in many cases training is a decision made by the employer rather than the employee. This...

This study analyzes the effects of government policies on the short-run and long-run movement of locally owned firms from a developed country to a less-developed country and on the output and growth rate of each country in the presence of home bias. The analysis uses a model which was developed...

Current growth literature does not explain the inability of poor countries to utilize existing knowledge. This study presents a stylized development model based on firms' expansion through on-the-job training. Since trained workers can supervise and train more workers, a development process in...

Literature notes many factors as affecting capital flows, but the effects of these flows over the recipient economies and the overall effect over growth are highly debatable. This study claims that although capital flows may be required for the increase in output, other forces are causing this...

Literature acknowledges various reasons for the natural resources curse, i.e., the tendency of countries that are abundant in natural resources to be relatively poor. However, all these reasons relate to the wealth effect created by natural resources, i.e., the increase in the income of a...

Institutions are important for proper economic performance, but are replaceable by trust or other social norms. We show that when proper institutions and trust are missing, integrity of the individuals can replace them. We construct a model of a transactions-based economy with contracts...