We analyse a two-task work environment with risk-neutral but inequality averse individuals. For the agent employed in task 2 effort is verifiable, while in task 1 it is not. Accordingly, agent 1 receives an incentive contract that, owing to his wealth constraint, leads to a rent that the other...

This paper presents evidence on the effects of economic liberalization of 1991 on the price responsiveness of aggregate private investment in India. The wide ranging reforms are expected to increase the price response of private investment due to (i) the Le Chatelier effect, (ii) a higher price...

This paper develops an overlapping-generations model in which agents invest in health to prolong life in both working and retirement periods. It explores how unfunded social security with or without health subsidies affects life expectancy, economic growth, and welfare. In particular, by...

The Penn World Tables (PWT) are an important data source for cross-country comparisons in economics. The PWT have undergone several revisions over time. This paper documents how countries' output growth rates change across four publicly available versions of the PWT. We show that for some...

This paper examines the relationship between international migration and source country fertility. The impact of international migration on source country fertility may have a number of causes, including a transfer of destination countries' fertility norms. We provide a rigorous test of the...

This article attempts to explain the large and persistent disparities in levels of output per worker across countries. It is argued that an explanation for these disparities requires an understanding of the relationship between knowledge and technology. The model that is constructed can be...

In this paper, we examine the economic policies that might allow a developing rural economy to escape from the poverty trap characterized by a subsistence level of per capita consumption in the long run. In our model where labour is combined to land available in fixed quantity to produce a...

We consider trade policies intended to affect the production of a foreign monopolist that generates negative externalities. We derive the optimal tariff and optimal import quota and examine which policy measure should be used to maximize domestic welfare. We find that if the domestic government...

Disputes over national product standards are a major source of tension in international trade negotiations. The usual pattern is that exporters challenge new product standards as a `disguised barrier to trade.' The paper develops a two-country political agency model of standard setting. It is...

In this paper strategic R&D policy is analysed, where a firm and a firm compete in a third country with vertically differentiated ( and ) products. If the product market is under price competition, the high-tech (low-tech) firm's government has an incentive to tax (subsidize) its domestic firm's...