We study an open economy where a pro labor and a pro business candidate compete in an election. The winner chooses taxes, which affect investment returns. Electoral outcomes depend on the size of the foreign debt, but the debt itself reflects expectations about the election. The resulting interaction is novel and has several implications. Elections are associated with increased volatility. Poli...

This paper proposes a dynamic economic model with physical capital and renewable resources. Different from most of the neoclassical growth models with renewable resources which are based on microeconomic foundation and neglect physical capital accumulation, this study proposes a growth model with dynamics of renewable resources and physical capital accumulation. The model is a synthesis of the ...

Most of us in this room-I dare say most adult Americans-were challenged as children to "make something of ourselves," specifically to "get an education." The fervor of the plea in my own case may have been a bit unusual-you see, unlike Senator Joe Biden, I am the first in my immediate family to get a college education. But I doubt very many haven't heard somewhere along the way the clarion call...

The gap between the world's rich and poor countries largely comes down to the financial and physical assets that create wealth. Developed economies possess more of this capital than developing ones, and what they have usually incorporates more advanced technologies. The implication is clear: A key aspect of economic advancement lies in poorer nations' capacity to acquire more capital and scale ...

The field of New Economic Geography (NEG) aims at explaining agglomeration based on increasing returns, monopolistic competition and international factor mobility. Deviating from existing approaches, this paper constructs a theoretical model based on capital market frictions. Firms compete monopolistically, but are lead by managers subject to moral hazard. Incentivizing managers is cheaper in r...

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Urban economists have put forward the idea that cities that are culturally interesting tend to attract “the creative class” and, as a result, end up being economically successful. Yet it is still unclear how economic and cultural dynamics mutually influence each other. By contrast, that has been extensively studied in the case of individuals. Over decades, the French sociologist Pierre Bourdieu...

In recent years substantial progress has been achieved in the field of ecological economics for clarifying human-nature interrelations. The fundamental role of the lifesupport functions of the environment (Odum, 1975) for economic development and sustainability has entered from ecology into economics, and has started to be theoretically as well as empirically analyzed. This has, in part, given ...

This paper assesses the quality of various micro level measures of social capital. It begins by examining a simple model of social capital accumulation in which households acquire social capital by devoting resources to forming relationships with other households. Through these relationships households acquire access to social resources which raises utility for any level of consumption. Tests o...