This paper combines the standard incomplete markets model of uninsurable idiosyncratic risks and borrowing constraints with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter also endogenously determined in equilibrium. We derive...

This paper combines the standard incomplete markets model of uninsurable idiosyncratic risks and borrowing constraints with the Arrow/Romer approach to endogenous growth to analyze the interaction of risk, growth, and inequality, the latter also endogenously determined in equilibrium. We derive...

We analyze the implications of innovation and social interactions on economic growth in a stylized endogenous growth model with heterogenous research firms. A large number of research firms decide whether to innovate or not, by taking into account what competitors (i.e., other firms) do. This is...

Parents care about their children, spend resources on educating them and bequeath them some physical and/or human capital. Here we argue that the actions of the parents have an influence, not only on the productive possibilities open to the children (through the capital they inherit) but also on...

Many empirical studies show the paradoxical fact that service output in proportion to industrial output does not tend to decline, in spite of rising service prices. Baumol's "cost disease" model well explains rising service prices, but it simply assumes that the output proportion remains...

We study a series of sustained growth models in which households' preferences are affected by the consumption of other households as summarized by average consumption. In endogenous growth models, the equilibrium paths involve lower savings and lower growth than the corresponding efficient...

New macro empirical evidence is provided to assess the relative importance of object and idea gaps in explaining the world income distribution dynamics over a benchmark period 1960-1985. Results are then extended through 1995. Formal statistical hypothesis tests allow us to discriminate between...

South Africa has experienced high budget deficits accompanied by sluggish economic growth over the years. Fears mount that such a trend may worsen due to the advent of the Covid-19. Yet, the effect of budget deficit on economic growth remains one of the widely debated topics in economics. This...

In endogenous growth theory models exist which are characterized by local and global indeterminacy. These concepts imply that economies differ with respect to their growth rates on the transition path (local indeterminacy) as well as their long-run growth rates (global indeterminacy). While the...

This paper investigates the link between overall specialization and growth, analyzing the shape of the relationship between the median of the sectoral distribution of the Balassa Index, our summary measure of overall specialization, and the level of per capita income. The median of the Balassa...