Threshold Externalities in Economic Development.

Standard one-sector growth models often have the counterfactual implication that economies with access to similar technologies will converge to a common balanced growth path. The authors propose an elaboration of the Diamond model that permits multiple, locally stable stationary states. This multiplicity is due to increasing social returns to scale in the accumulation of human capital. Copyright 1990, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

A Dynamic Equilibrium Model of Search, Bargaining, and Money

This paper considers dynamic equilibria in a model with random matching, strategic bargaining, and money. Equilibrium in the bargaining game is characterized in terms of a simple differential equation. When we embed this characterization into the monetary economy, the model can generate outcomes such as limit cycles that never arise if one imposes a myopic Nash bargaining solution, as has been done in the past.Journal of Economic LiteratureClassification Numbers: C78, D83, E31. © 1998 Academic Press

The Dynamics of Exclusion and Fiscal Conservatism

This paper studies the impact of income inequality on fiscal conservatism when an increase in inequality essentially affects the bottom of the income distribution. It is argued that, contrary to what is generally assumed in the economic literature, inequality will then be associated will less, rather than more, redistributive taxation. Furthermore, if the poor are liquidity constrained then the positive association between inequality and fiscal conservatism will increase the persistence in the dynamics of income distribution and possibly lead to multiple steady states. (Copyright: Elsevier)political economy; income distribution; human capital; poverty; exclusion; inequality; path dependence