Empirical evidence for the U.S. suggests that the consumption of intoxicants increases in association with the socio-economic deprivation of the middle-class. To explore the underlying mechanisms, we set up a task-based labor market model with endogenous mental health status and a health care...

R&D-based growth theory suggests that a larger population size raises either the long-run rate of economic growth (“strong scale effect”) or the level of per capita income (“weak scale effect”), with far-reaching policy implications. However, for modern times there is little empirical...

This paper develops a two-sector R&D-based growth model with congestion effects from increasing urban population density. We show that endogenous technological progress causes structural change if there are positive productivity spillovers from the modern to the traditional sector and Engel’s...

This paper examines the impact of technological progress in the effectiveness of quality-improving, demand-enhancing activities on wage inequality and the employment structure in an ideal variety model of monopolistic competition. In a first step, it is shown that such technological change leads...

We provide a brief account of the ongoing debate on the relationship between international capital flows and economic growth. In particular, we argue that the current debate may be enriched by looking more closely at the relationship between these key variables and educational choice and public...

This paper argues that openness to goods trade in combination with an unequal distribution of political power has been a major determinant of the comparatively slow development of resource- or land-abundant regions like South America and the Caribbean in the nineteenth century. We develop a...

Ability of managers and other nonproduction professionals is key for the productivity of firms. Hence, the assignment of heterogeneous nonproduction workers across firms determines the distribution of productivity. In turn, the transmission of productivity differences into profit differences --...