By promoting some of the poor into the middle class and thereby co-opting them into the system, a self-interested elite reduces the threat of political instability and the risk of being overthrown. Co-optation is accomplished through the transfer of resources to some of the poor, enabling them...

Developing country leaders typically resemble proprietors more than benevolent social planners, i.e., they are powerful individuals pursuing their own interests while they remain in power. We model growth in a "proprietary economy" facing each period an endogenous probability of "political...

This paper presents a new, dynamic economic model of criminal activity. Individuals are endowed with legal and criminal human capital. Potential incomes in legal and criminal sectors depend on the level of the relevant human capital, the rate of return, and random shocks. Both types of human...

We examine the dynamics of two endogenous-growth models in which agents have comparison utility. In the inward-looking economy, individuals care about how their current consumption compares with their own past consumption. In the outward-looking economy, they care about how their own consumption...

Developing country leaders typically resemble proprietors more than benevolent social planners, i.e., they are powerful individuals pursuing their own interests while they remain in power. We model growth in a 'proprietary economy" facing each period an endogenous probability of 'political...

We model growth in dictatorships facing each period an endogenous probability of “political catastrophe'' that would extinguish the regime's wealth extraction ability. Domestic capital exhibits a bifurcation point determining economic growth or shrinkage. With low initial domestic capital the...

We model growth in dictatorships facing each period an endogenous probability of ‘political catastrophe’ that would extinguish the regime's wealth extraction ability. Domestic capital exhibits a bifurcation point determining economic growth or shrinkage. With low initial domestic capital the...

This paper presents a dynamic model of criminal activity. Individuals are endowed with legal and criminal human capital. Potential incomes in legal and criminal sectors depend on the level of the relevant human capital, the rate of return and random shocks. Human capital can be enhanced by...

This paper compares the dynamics of two general equilibrium models of endogenous growth in which agents have comparison utility In the inward-looking economy individuals care about how their consumption in the current period compares to their own consumption in the past (one way to describe this...