The aim of this paper is to identify possibilities for guiding policy in the area of basic research. We provide an extended review of basic research and offer new insights on its linkages to key economic variables and economic growth. After defining what basic research is, we identify and...

This paper models technology adoption as replacing workers by machines, which perform the same job in the production process. The paper shows that such modelling of technology adoption affects significantly the analysis of economic growth. This model can explain large and persistent...

This Paper studies a model of the distribution of income under bounded needs. Utility derived from any given good reaches a bliss point at a finite consumption level of that good. On the other hand, introducing new varieties always increases utility. It is assumed that each variety is owned by a...

This Paper studies a model where Information Technology, while typically increasing overall inequality, is likely to harm some people at intermediate and high levels of the distribution of income but to benefit people at the bottom; where within a given occupation it may harm some workers while...

We introduce non-homothetic preferences into a general equilibrium model of monopolistic competition and explore the impact of income inequality on the medium-run macroeconomic equilibrium. We find that (i) a sufficiently high extent of inequality divides the economy into mass consumption...

This Paper presents data on the evolution of top incomes and wages from 1922 to 2000 in India using individual tax returns data. Our data shows that the shares of the top 0.01%, the top 0.1% and the top 1% in total income shrank substantially from the 1950s until the early-to-mid 1980s but then...

This paper evaluates the prospects for income tax reform in China during the coming decade (with a comparison to India), and argues that such reforms should rank high on the policy agenda in these two countries. Due to high average income growth and sharply rising top income shares during the...

This paper studies the distributive effects of growth when different agents' income is drawn from accumulated and non-accumulated factors of production in different proportions. It also notes that political interactions may contribute to determine factor shares and growth when income sources are...

Mobility of workers involves flows of labour, human capital and other production factors and thus contributes to a more efficient allocation of resources. Besides these effects on allocative efficiency, migrant flows affect relative wages and also change the international and national...

Models of labour market equilibrium where forward-looking decisions maximize both profits and labour income on a risk-neutral basis, offer valuable insights into the effects of employment protection legislation. Since risk-neutral behaviour in the labour market presumes perfect insurance,...