This research develops a theory about the role of within-country income inequality leading to overtaking in economic performance among countries. The theory captures two opposing effects of inequality on factor accumulation and suggests that the qualitative change in their combined effect is a...

In this paper, we have obtained closed-form solutions in Cass-Koopmans growth models with heterogeneous agents. The relationship between the form of production function and the dynamics of income distribution is made explicit. We then use this relationship to determine what production structure...

There is much talk of the knowledge economy, and the central role of ideas and knowledge in generating economic growth. This paper provides a brief review of the economic literature on how skills/ knowledge/ ideas might contribute to higher output or higher rates of growth. Ideas are...

The city size distribution of many countries is remarkably well approximated by a Pareto distribution. We study what constraints this regularity imposes on standard urban models. We find that under general conditions urban models must have (i) a balanced growth path and (ii) a Pareto...

We empirically test some implications from location theory using the location of Los Angeles area gasoline stations in physical space and in the space of product attributes. We consider the effect of demand patterns, entry costs, and several proxies for competition -- the total number of...

We analyze models of product differentiation with perfect price discrimination and free entry. Although perfect price discrimination ensures efficient output decisions given product characteristics, coordination failures may prevent efficiency in the choice of product characteristics. More...

This paper analyzes the incentives for governments to impose export subsidies when firms invest in a cost saving technology before market competition. Governments first impose an export subsidy or a tax. After observing export policy, firms invest in cost reducing R&D and subsequently compete in...

We study the effect of market structure upon international trade policy when firms invest in process R&D before competing in a differentiated goods market. For a domestic monopoly, and increasing the number of foreign firms, the government either chooses a R&D (and output) subsidy, or remains...

Platform sharing across manufacturers has recently become common practice in the automobile industry. Its important objective is to reduce procurement costs by taking advantage of the commonality of components, but this often reduces the degree of product differentiation. We investigate this...