In many OECD countries income inequality has risen, but surprisingly redistribution as well. The theory attributes this partly to the redistributive effect of education spending. In the model income inequality and growth depend in an inverted U-shaped way on education. To maintain a given level...

This paper complements research on how {\em love of wealth} bears on key variables in a Ramsey-Cass-Koopmans growth framework. It is shown that for an optimum the social planner cannot have an excessive {\em love of wealth}. If the planner has the `right' {\em love of wealth} an optimum exists...

This paper analyzes the interplay of economic growth, (re-)distribution and policies when the latter are set exogenously or when they depend on economically important fundamentals. A redistribution policy generally causes lower growth, but less so when economic efficiency is higher. The model...

This book contributes fresh theoretical and empirical evidence on competitiveness and growth in connection with the commitment made by European leaders at the Lisbon Summit in 2000 to ‘render the European Union the most competitive and dynamic knowledge based economy in the world by 2010,...

This paper analyzes the link between long-run economic growth and policy that depends on important economic fundamentals. In simple growth regressions the measured policy effects would then generally be biased. Using a widely quoted theoretical model, the signs of the biases are derived. It is...

Many theoretical models show that redistribution causes low growth or capital outflows even though empirically redistribution and growth are often found to be positively associated across countries. This paper argues that tax competition and the danger of capital outflows leads optimizing...