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Murphy et al. (1989). We show under which conditions the global economy in our model is caught in a poverty trap … the set of parameter combinations leading to a poverty trap, whereas international trade makes it more difficult to …
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framework, informal risk-sharing is incomplete due to risk externalities, which leads to moral hazard. We compare the first best …
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We consider the optimal taxation of a good which exhibits a negative externality, in a setting where agents differ in their value for the good, their disutility for the externality and their value for money, and the planner observes neither. Pigouvian taxation is the unique Pareto efficient...
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