- “Nondurable and Durable Consumption with Habits and Anticipation of Future Consumption” (with Joao Ricardo Faria)
- Infrastructure maintenance versus new investment in the case of an open economy (with Rolando Escobar-Posada and Bibaswan Chatterjee)
- Compulsory and non-compulsory education: consequences for growth and welfare (with Rolando Escobar-Posada )
This paper develops a two-sector model of endogenous growth, where the government provides not only infrastructure services, but also education services. Education services are broken into two components. The first reflects compulsory education (K12) which is provided “free of cost”. The second represents non-compulsory education (i.e. higher education), which we allow to be financed with a combination of public and private resources. We consider several higher education reforms regarding its financing (tax changes) and provision (expenditure changes) and their impact on growth, welfare, and public debt. A reform that expands the supply of higher education is always growth promoting but not necessary welfare promoting, and sustainability requires either a higher deficit or a higher tax. The combination of growth and welfare maximization are not achievable with a single policy. At the optimal income tax or the growth maximizing rate of spending, positive user fees are required to maintain public solvency. Therefore, “free” higher education is not an optimal policy for promoting growth or welfare.