Imported technologies,urban unemployment and the North-South dialogue

This paper extends the Harris-Todaro model with intersectoral capital mobility to include sector specific imported technologies. Technologies are assumed to be embodied in imported capital goods. The small economy in the South, for which the model is defined, can import any amount of these technologies from the North at given royalty rates. We find that if the North agrees to reduce the royalty rate on the industrial technology, both the level and the rate of urban unemployment would rise and the income distribution change against the wage earners, whereas such a reduction for the agricultural technology would have just the opposite effects. A decrease in either royalty rate would increase the national income in the South, although the magnitude of the increase in income would be larger with reduced royalty rate for agricultural rather than industrial technology. The policy implication is that the South should emphasize the import of agricultural technology over the industrial technology.     

技术变化与收入分配

本文以20世纪70年代的信息技术革命为背景，运用美国商务部经济统计局生产率数据库，在此较五，六十年代和七、八十年代工资结构的基础上，提出了一个简单的技术变化模型。通过模型以及与经验观察相一致的实证研究，指出技术变化引起工人工资不平等的两种渠道；直接的途径是对于既定的资本劳动力比率来说，新技术能生产更多的产量；间接的途径是资本从非技能工人流向技能工人，从而使得前者的人均资本在技术变化前变得更少，本文的结论是：运用革命性的新技术对传统行业进行改造，构成了经济增长的最终主体，人力资本水平之高低越来越影响到最终经济的财富的总量。     

教育体系、收入分布与经济增长

本文使用一个包含物质资本与人力资本积累的世代交叠模型,研究不同的教育体系对经济增长的影响.我们发现,在公立教育体系下,最优的教育投资水平高于私立教育体系,收入差异也将会比在私立教育体系下下降得更快.因此,与私立教育体系相比,公立教育体系更有利于人力资本积累,在公立教育体系下一个国家将会有更高的经济增长率与更为平等的收入分布.     

Aggregate savings when individual income varies

This paper examines aggregate savings in a general equilibrium model where infinitely lived households face volatile (and possibly uncertain) income paths, hold a risk-free asset, and face a borrowing constraint. I first show that the equilibrium capital stock in an economy without uncertainty, but where individual income varies, can be larger than in an economy where each household's income is constant. When individual income is stochastic and uninsurable, the equilibrium capital stock is always larger than when income is constant. This additional capital accumulation has sometimes been interpreted as precautionary savings, but I argue that much of the additional savings are generated by permanent-income motives in combination with strict borrowing constraints.     

Life Insurance,Human Capital Accumulation and Economic Growth

We compare growth rates in the absence and presence of life insurance using an overlapping generations framework with human capital accumulation to clarify how life insurance contributes to economic growth through the education investment of individuals depending on economic circumstances. Our results show that, as expected, the growth rate is higher when there is life insurance if the rate of time preference or the productivity of human capital accumulation is sufficiently low and if the income loss induced from lifetime uncertainty is moderate. However, if the income loss is sufficiently large, the growth rate is lower when there is life insurance.     

Endogenous mortality, human capital and economic growth

We consider growth and welfare effects of lifetime-uncertainty in an economy with human capital-led endogenous growth. We argue that lifetime uncertainty reduces private incentives to invest in both physical and human capital. Using an overlapping generations framework with finite-lived households we analyze the relevance of government expenditure on health and education to counter such growth-reducing forces. We focus on three different models that differ with respect to the mode of financing of education: (i) both private and public spending, (ii) only public spending, and (iii) only private spending. Results show that models (i) and (iii) outperform model (ii) with respect to long-term growth rates of per capita income, welfare levels and other important macroeconomic indicators. Theoretical predictions of model rankings for these macroeconomic indicators are also supported by observed stylized facts.     

Fiscal Policy, Congestion, and Endogenous Growth

We devise an endogenous growth model with private and public physical capital, and human capital, which allows for relative and absolute congestion. According to empirical evidence, long-run growth is invariant to fiscal policy. Despite its complexity, the dynamics of the market economy and the centralized economy are analyzed in detail. We show that an increase in absolute congestion reduces the long-run growth rate of output. In contrast, relative congestion does not affect long-run growth. In the absence of congestion, it is optimal to use lump-sum taxation, and with congestion it is optimal to also tax income.     

Income Inequality, Human Capital Accumulation and Economic Performance

We show that greater income equality implies higher human capital accumulation and economic performance in an overlapping-generations model with heterogeneity in income and talent. Given liquidity constraints and declining marginal utility, individuals with a given level of talent receive education if their initial income is higher than a threshold level and the threshold is lower for more talented individuals. Assuming the more talented create more human capital when educated, greater initial income equality for one generation then imply not only higher aggregate human capital accumulated by that generation but an improvement in all subsequent generations' initial income distributions.     

Scale Effects,Savings and Factor Shares in a Human Capital-based Growth Model with Physical Capital Accumulation

Using a balanced-growth model with physical and human capital accumulation, we analyze quantitatively the long-run effects of changes in the savings rate and in income distribution (i.e. the shares of physical and human capital in income) on investment in skill acquisition, income growth, and the ratio of human to physical capital. In the long run, the ratio of physical to human capital is constant, so that these two factor inputs can grow at the same rate. This rate is a function of the economy's exogenous technological and preference parameters and depends positively on the share of skills invested in human capital formation. We also find that population growth is neither necessary nor conducive to economic growth, that the level of real income depends linearly on the level of human capital and that it is independent of population size.     

An essay on the Life Cycle: Characterizing intertemporal behavior with uncertainty,human capital,taxes, durables,imperfect capital markets,and non-separable preferences

This paper formulates a general characterization of a household's portfolio choice and savings behavior in an environment with uncertain future interest rates, prices, wages, and factors influencing tastes. Savings may be invested in three types of assets: financial assets; human capital, which is non-tradable; and consumer durables, in which investment may be partially irreversible. Risk-return relations determine the optimal allocation of resources across assets at a point in time. The optimal intertemporal allocation of resources is determined by a restriction on the planned growth rate for the marginal utility of after-tax wealth, where growth rates depend on rates of time preference and measures of long-term riskless rates of interest. Given special assumptions, this marginal utility follows a martingale process as a consequence of optimizing behavior. Pricing formulae are developed for evaluating shifts in uncertain future income, wage, and price profiles. The relations characterizing portfolio and savings behavior presented here do not rely on particular distributional assumptions; they account for all forms of uncertainty including wage uncertainty induced by human capital investment; they allow for the non-marketability of assets; and the main results apply for very general functional form assumptions for preferences. In later sections, results are extended to incorporate income taxes and to account for a wide variety of imperfections in asset markets.     

Human capital and income distribution dynamics

The paper assumes a continuum of two period-lived agents; agents are identical except for inherited income. Young agents allocate their inheritance between consumption and investment in human capital under uncertainty. In the second period they receive a wage proportional to the accumulated human capital and invest in offspring. Two main results arise: a low earning per unit of human capital leads economy to converge to a stationary income distribution whatever the initial distribution and vice versa, for a sufficiently high wage, endogenous growth operates and the distributive dynamics depends on initial conditions. In this case different redistributive policies are analysed.     

Optimal income taxation with human capital accumulation and limited record keeping

This paper characterizes optimal income taxes in a dynamic economy where human capital is unobservable and the government is restricted to use taxes that depend only on current income. I show that unobservability of human capital tends to decrease the labor wedge, while the effect on the human capital wedge is uncertain. I also analyze the relationship between optimal taxes in economies with and without endogenous human capital and identify two qualitative reasons why the optimal tax codes will differ. I perform numerical simulations to calculate the quantitative relevance of endogenous human capital formation for optimal tax policy. I find that endogenous human capital lowers marginal tax rates by about 9% on average, as compared with a static model without human capital.     

Reexamination of Economic Growth, Tax Policy, and Distributive Politics

The paper examines the relationship between economic growth, tax policy, and distribution of capital and labor ownership in a one‐sector political‐economy model of endogenous growth with productive government spending financed by a proportional tax on capital income. The analysis shows that inequality in wealth and income can be positively or negatively related to the optimal tax rate. In either environment, higher inequality leads to a lower after‐tax return to capital, thereby reducing the economy's growth rate.     

Labor Income Taxation,Human Capital,and Growth: The Role of Childcare*

In this paper, we examine the effects of labor income taxation on growth in an overlapping generations model in which schooling and childcare play a role in the production of human capital. We compare such effects with those obtained in a model in which only schooling matters for skill formation. We show that the omission of childcare from the technology of skill formation can bias the results related to the impact of labor income taxation on growth.     

Comprehensive income taxation, investments in human and physical capital, and productivity

This paper analyses the implications of the comprehensive income tax for the accumulation of human and physical capital and for the overall productivity level of the economy. A comprehensive income tax, applying to both labour income and capital income, is shown to discriminate against investments in human capital relative to investments in physical capital. It has an adverse impact on human capital accumulation and lowers productivity.     

Capital Expansion, Endogenous Growth and Equilibrium Unemployment

A model is developed, which captures the interactions of unemployment and economic growth in general equilibrium. The economy evolves along a correct-expectations equilibrium path exhibiting endogenous job rationing, and productivity growth is driven by installation of new capital. Under the maintained hypothesis that the elasticity of substitution between capital and labour is less than unity, unemployment benefits are shown to shift up the whole path of equilibrium unemployment, leaving the economy with a higher natural rate of unemployment and lowering the long-run growth rate permanently. Investment tax credits financed by lump sum taxes on total income are capable of lowering the natural rate and raising the economy's growth rate.     

Innovation,Diffusion and Cumulative Causation: Changes in the Spanish Growth Regime, 1960–2001

This article presents a model of macroeconomic growth that combines in a single formalization two complementary views on innovation and economic growth, the technology‐gap approach and the Kaldorian theory of cumulative causation. The model suggests that what matters for economic growth in the long run is the existence of a good match between the patterns of technological change, income distribution and demand growth. The model is estimated for the Spanish economy during the period 1960–2001, and the econometric results show that important changes have happened in its growth regime over time. Since the 1980s, innovation and diffusion of new technologies provide a greater stimulus to productivity growth, but the technology push on the supply‐side is not sustained by the prevailing patterns of income distribution and demand growth.     

Business cycles in a two-sector model of endogenous growth

Summary. This paper analyzes the impact of cyclical volatility on long-term economic growth: does growth increase or decrease with increased cyclical volatility? We construct a stochastic two-sector model of endogenous growth to analyze this question in detail. We will show that economic growth is higher in the presence of business cycles, since people devote more time to learning activities in an uncertain economic environment. Human capital is a hedge against future income uncertainty. Hence, the rate of economic growth will be higher in a stochastic environment. Based on a calibration of the model, we find that economic growth increases by 0.46%-point as a result of observed business cycle variability. When account is taken of the interaction between the model's general equilibrium and the cycle, welfare gains (measured in units of a permanent percentage increase in consumption) from eliminating business cycle volatility are approximately 1.87%. Received: January 25, 2000; revised version: November 3, 2000     

International tax arbitrage, tax evasion and interest parity conditions

Using a finite-horizon general equilibrium model with uncertainty and money, we characterize situations where tax arbitrage opportunities may arise for international portfolio investors in an economy with heterogeneous capital income taxation when there is some scope to evade taxes on foreign capital income. We derive tax-modified uncovered interest parity conditions and forward rates similar to the no-tax ones, but augmented by tax-induced “risk-premium” terms; covered interest parity conditions remain unaffected by the introduction of capital income taxes, a consequence of our approach of bounding tax-based arbitrage without restricting arbitrage per se.     

Redistributive Tax and Growth in a Model with Discrete Occupational Choice

An optimal redistributive tax-subsidy formula is derived for a growth model where income inequality is endogenously driven by an adult's choice of occupation between work and management. Investment in human capital is the engine of growth. The world's stock of exploitable knowledge as well as the economy's average human capital determine the potential rate of return from investment in human capital in an economy. How much available knowledge would be exploited in the economy depends on the proportion of innovators in our model. A redistributive tax reform impacts growth as well as income inequality via its influence over the occupational choice. The optimal redistributive tax rate is path-dependent in the sense that it depends on the initial wealth distribution. The normative implication of the model is that the optimal capital income tax rate could very well be positive if the initial wealth inequality exceeds a threshold. The optimal capital income tax rate depends inversely on the initial wealth inequality.