New! You can now keep track of new articles from Review of Economic Dynamics on your personalized homepage!
This paper presents evidence that the spread between the marginal product of capital and the return on financial assets is much higher in poor than in rich countries. A model with costly intermediation is developed. In this economy, individuals choose at each instant whether to work or to operate...
Most economic models do not suggest an optimal fiscal policy in which the government's budget is balanced each period. Conventional wisdom suggests that the government run surpluses and deficits to smooth taxes. In this paper, I use an approach which brings together real business cycle theory and...