In this paper, we characterize a mechanism for reducing pollution emissions in which countries, acting non-cooperatively, commit to match each others' abatement levels and may subsequently engage in emissions quota trading. The analysis shows that the mechanism leads to efficient outcomes. The...

The use of unemployment insurance and minimum wages as instruments for redistributing income are analyzed. The government is assumed to be able to implement an optimal income tax in an economy consisting of two ability-types of persons. The effect of introducing a minimum wage which induces...

The Atkinson-Stiglitz Theorem states that if labor is weakly separable from goods in household utility functions, differential commodity taxation should not be not part of an optimal redistributive tax system. This Theorem, which is arguable the most policy-relevant result to come out of the...

A model is constructed in which, given the inability of implicit contracts to be self-enforcing, a minimum wage policy combined with unemployment insurance can be welfare-improving. Unemployment insurance can be decentralized to the private sector if the government can commit to a minimum wage....

The purpose of this paper is twofold. First, it extends previous models of non-cooperative private funding of pure public goods by allowing both for distortionary taxation of private goods and for subsidies based on contributions to the public goods. Second, it clarifies the type of behavioural...

The dynamic path of accumulation in a neo-classical economy can be described by a differential equation in the time rate of change of the per capita capital stock. In the theory of differential equations there is a technique for examining the change of the solution of a differential equation...

Redistribution programs are constrained because those not working may be either unable to work, voluntarily unemployed or involuntarily unemployed. The inability to distinguish among these three cases inhibits the targeting of transfers to those most in need. Enabling the government to monitor...