Analytical expectational stability results are obtained for both Euler-equation and infinitehorizon adaptive learning in a simple stochastic growth model. The rational expectations equilibrium is stable under both types of learning, though there are differences in the learning dynamics. JEL Classification: E62, D84, E21, E43.

Studies of the effect of government spending on unemployment are potentially confounded by reverse causality. To address the endogeneity problem, we exploit variation in a porkbarrel road-building program, and find that higher government expenditure on road-building substantially reduces local unemployment. JEL Codes: E24, E62, H30, H54,

The paper considers governments' public procurement decision as a way of influencing industry structure. In a federation in which capital is mobile and capital taxation is harmonized, a home bias in public procurement can potentially be explained as an effort to increase the capital intensity of local production and to attract taxable capital. As a result, governments may prefer domestic firms ...

This note studies the choice of tax structure in a majority voting model with tax competition. Regions may tax mobile capital or immobile labor. Individuals differ with respect to their relative endowments of labor and capital. Even though a lump sum tax is available, the equilibrium capital tax in a jurisdiction may be positive. In a symmetric equilibrium, this will be true if the median capit...

We note some problems in Alesina and Angeletos (2005) and suggest a way to maintain the key insight of that paper, which is that a demand for fairness could lead to di¤erent economic systems such as those observed in France versus the US (multiple equilibria). JEL classi…cation: D31, E62, H2, P16.

Differential tax analysis is used to show how the optimal mix of inflation tax and direct taxation changes with the relative size of the hidden economy. The larger the relative size of the hidden economy, the smaller the optimal ratio of direct tax to inflation tax. Anecdotal empirical evidence supports this result. JEL Classification: E62, H21, H26, O17.

This paper employs Roback’s locational-equilibrium model of public-goods pricing, crosssectional data from the Census of Population and Housing, and SMSA-level estimates of public capital stocks in order to examine the productive contribution of public capital. I find that public capital has a small positive impact on private output. JEL classification codes: E62, R53

We present a basic exogenous growth model with two consumption goods that differ as regards their contributions to environmental pollution. Allowing for habit formation of the polluting good, we show under which conditions habit formation raises the consumption of the clean good relative to the dirty one in the competitive economy. Further, we demonstrate when habit formation generates a lower ...

We document that government spending multipliers depend on the population age structure. Using variation in military and birth rates across US states, we show local fiscal multiplier is 1.5 increases with share of young people, implying 1.1–1.9 interquartile range. A parsimonious life cycle open economy New Keynesian model credit market imperfections age-specific differences labor supply demand...

We study how more negative historical exposure to the actions of nation-states—like war, occupation, and repression—affects formation regional identity. The quasi-exogenous division French regions Alsace Lorraine allows us implement a geographical regression discontinuity design at municipal level. Using measures stated revealed preferences, we find that experiences with nation-states are assoc...