A two factor production function with a variable elasticity of substitution is considered. The note describes the relation between the elasticity and the behavior of the marginal products and the output per unit input as the factor ratio approaches zero or infinity.

This paper examines the macroeconomic implications of life-cycle and dynastic saving behavior for closed and small, open economies. Using an extended version of Blanchard’s overlapping agents model, the analytical framework nests these two competing views, treating agents as either dynastic...

This paper presents estimates of the size of the shadow economy in 76 developing, transition, and OECD countries, which are derived by combining figures from different estimation methods. We describe and discuss the strengths and weaknesses of the different estimation methods. We find that the...

Using a two-stage Cournot game with economies of scope, we examine the effects of monetary policy on the optimal bank behavior. Emphasis is on the way the interest rate spread is influenced by the minimum reserve requirements. It is demonstrated that the sign of this effect depends on the kind...

Рассматриваются взгляды экономистов ХХ столетия на влияние налогов на экономическую активность хозяйствующих субьектов. При этом под эффективностью имеется в...

Intermediate microeconomics textbooks employ indifference curve analysis to explain the income and substitution effects of a change in the price of a good x on the demand for it, holding other variables constant. Further, they demonstrate how the shape and slope of the demand curve changes...

In a recent article, Thaver (2013) makes the case for including in intermediate microeconomics textbooks analysis of the substitution and output effects of a firm’s response to a change in the price of an input. In her analysis, Thaver assumes that the firm is constrained by a fixed...

This paper studies a panel of China's provinces over the period 1996-2009 during which urban household saving rates increased from 19 percent of disposable income to 30 percent. It finds that the increase in urban saving rates is negatively associated with the decline in real interest rates over...

This paper focuses on the necessary conditions required in order to exploit the substitution effect which arises when there is a shift in demand induced by import quotas under imperfect competition. The protective policy succeeds if the substitution effect shifts in favor of goods produced by...

Alcopops, the popular drinks especially between the young people, are alcoholic drinks which are highly sweetened and mixed before. The success of this new drink is based on its taste with sugar, special design appropriated to trend, advertisement for the young people and image. The image of...