In this paper we illustrate the possible normative relevance of the links between human capital and financial assets via an example related to growth. When the financial structure is complete, growth is indeterminate because individual allocations between human capital and a tradable asset are...

Voting games are characterized by the emergence of dominated strategies, that would be iteratively deleted by rational players. In this note we show, via an example, how applying iterated dominance restricts the set of equilibrium outcomes in Besley and Coate (1997) citizencandidate model of...

Empirical analysis has shown that oligopolistic rents are not generally fully translated into profits, but are instead shared between firms and workers. This evidence has implications for the desirability of trade intervention. The crucial point for the analysis is to know how wages react to...

In this paper we develop a model of a vertically differentiated industry where the production of higher quality goods needs a higher fraction of specialized labour. In the first stage, firms choose the quality of their products, in the second, both good prices and skilled workers’ wages are...

In a vertically differentiated oligopoly where the high quality variant of the good requires the use of the high quality labour (available in¯fixed supply) ¯firms may either all supply the same quality or di®erentiate their product. Only di®erentiated outcomes can be optimal, but the number...

When the production of high quality goods needs the employment of qualified labour, firms’ decisions concerning quality are affected by the extent to which skills are abundant. By means of a comparison between monopoly and perfect competition, we show how market power in such a context may...

We incorporate equilibrium unemployment due to imperfect matching into a model of trade in intermediate inputs (Ethier (1982)). Firms are assumed to be price takers and their size is given by technology. Firms enter the market as long as expected profits cover the search cost they incur...

Both the theoretical and the empirical literature on international trade agree that quantitative restrictions on trade have an impact on the average quality of exports. Yet, in evaluating (ex-ante) trade policy effects, there are no studies tiling into account the role of the change in quality....

Several developed countries are witnessing a trend towards an increasing gap in the earnings between skilled and unskilled workers. Though it is widely recognised that human capital formation programs through education and training should be strengthened in the presence of increasing wage...