Consumption and leisure in Austria

Böhm's (1980) data set on consumption and leisure in Austria is used to estimate the Almost Ideal Demand System (AIDS) of Deaton and Muellbauer (1980). Average income elasticities and average Slutzky price elasticities are calculated and the patterns of consumption and leisure in Austria are described.     

Euro membership and fiscal reaction functions

The paper uses fiscal reaction functions for a panel of euro-area countries. We investigate whether euro membership has reduced the responsiveness to shocks in the level of inherited debt. Compared with the performance in the period between signing of the Maastricht Treaty and introduction of the euro, membership has significantly reduced the average responsiveness. Conversely, when compared to the period before the Maastricht Treaty, euro membership is associated with a larger responsiveness. The results are sensitive to changes in the specification, such as an exclusion of Greece from the panel.     

Demography, growth, and inequality

We extend the single-sector endogenous growth model to allow for a general demographic structure. The model shows that due to the “generational turnover term,” the equilibrium growth rate is less than that of a representative agent model. We find the local dynamics about the balanced growth path (bgp) to be unstable, implying that the bgp is the only viable equilibrium. Using numerical simulations, we analyze how economic consequences of a change in the population growth rate differ, depending on the source of the demographic change. In addition, we analyze the relationship between changes in the demographic structure and what we call the “natural rate of wealth inequality”. Finally, we use our model to study how the demographic transition experienced by the United States has affected the economic growth rate and the degree of wealth inequality.