Using the hybrid of Heckscher - Ohlin and Specific Factor models of trade we show that economic recession led shock results in a loss for both capitalists and skilled workers. Some of the unionized unskilled workers lose formal sector employment and move onto the informal sector. In case capital...

This paper builds a general equilibrium model for a small open economy with unemployment of unskilled labor to assess the impact of a recessionary shock. It is shown that irrespective of the factor intensity assumption skilled wage and rental ratio goes up if recession led price fall is...

We construct a general equilibrium model and analyze the effectiveness of trade reform in a distorted economy where distortion exists in form of bureaucratic corruption that arises because of trade protection at the border. In this kleptocratic set up, intermediaries are employed in order to run...

In this paper my endeavor is to give you an idea about the upshot of a recessionary phase on the intermediation activity which is required for the survival of the informal fragment of the society. Informal part of the economy covers a large chunk of the total economic activities in any stylized...

We use the HOS model of international trade to find a link between trading (including domestic trading or retailing) costs and pattern of trade, not just its effect on volume of trade. Even if we use symmetric iceberg type trading costs, unlike conventional unit cost approach, we generate...

In this paper we propose a theoretical model where formal and informal sectors co-exist in tandem. Trade union segregates some labor from being formal. Capital is not allowed to freely move between formal and informal sectors. Using this sort of framework it has been shown that immigration of...

Informal economy involving unrecorded, unregistered, extra legal activities employs majority of the workforce in the developing world. Such extra legal existence of informal production is facilitated through extortion by agents of political forces in power. Also extortion activities themselves...

This paper uses a Heckscher-Ohlin nugget framework with both traded and non-traded goods. Our motive is to investigate the effects of corruption and tax cut. We assume only the non-traded sector to be corruption affected. We argue that a fall in the degree of corruption surprisingly increases...

Health standard of a region or economy significantly depends on environmental quality. And informal sector has a striking role for overall environmental quality as sometimes producers prefer not to produce in the formal sector as formal production calls for stringent environmental and other...

Informal economy involving unrecorded, unregistered, extra legal activities employs majority of the workforce in the developing world. Such extra legal existence of informal manufacturing and service sectors is facilitated through extortion by agents of political forces in power. Such extortion...