This paper presents an analytically tractable continuous-time general equilibrium model with investment irreversibility and fixed adjustment costs. In the model, there is a continuum of firms that are subject to idiosyncratic shocks to capital. Although the presence of investment frictions lowers consumer welfare, it may raise or reduce the long-run average capital stock, depending on the degre...

The dynamic properties of the optimal growth model are examined, based on a one good and two factor-labor and capital--model with a labor-surplus economy due to a fixed wage rate. If the average capital productivity is higher than the time discount rate which is assumed to be larger than the population growth rate, then the economy reaches the full employment stationary state in a finite amount...

Available online 26 November 2010 This paper estimates the Heckscher–Ohlin model with annual US data from 1949 to 2006 for outputs of manufactures and services with inputs of fixed capital assets and the labor force. Difference equation and error correction regressions provide estimated coefficients for the comparative static system. Tariffs on manufactures primarily raise the capital return in...

We re-examine, from a political economy perspective, the standard view that higher capital mobility results in lower capital taxes a view, in fact, that is not confirmed by the available empirical evidence. We show that when a small economy is opened to capital mobility, the change of incidence of a tax on capital from capital owners to owners of the immobile factor may interact in such a way w...

We analyse the incentive impact of bank capital regulation in a model with endogenous capital, assuming regulators randomly audit banks and require undercapitalised banks either to bear the fixed cost of new issue or to liquidate. Forward looking banks with sufficient franchise value maintain a buffer of capital in excess of the regulatory minimum. In our dynamic setting we show, amongst other ...

BACKGROUND A growing number of studies have suggested a link between social capital and health. However, the association may reflect confounding by factors, such as personality or early childhood environment, that are unmeasured prior common causes of both social capital and health outcomes. The purpose of this study was to investigate the impact of social capital on physical and mental health ...

Two competing approaches to setting risk-based capital (RBC) parameters are the traditional probability of ruin approach and the more recent expected policyholder deficit (EPD) ratio approach. The probability of ruin approach develops capital standards based on a fixed maximum probability of insolvency regardless of risk. The EPD ratio approach allows tradeoffs between the risk of insolvency an...

OBJECTIVE To examine which contextual features of the workplace are associated with social capital. METHODS This is a cohort study of 43,167 employees in 3090 Finnish public sector workplaces who responded to a survey of individual workplace social capital in 2000-02 (response rate 68%). We used ecometrics approach to estimate social capital of work units. Features of the workplace were work ...