We consider a small open Harris-Todaro(1970) economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. The main objective of this paper is to analyse the effects of...

We propose a theory of how market power affects wage inequality. We ask how goods and labor market power jointly affect the level of wages, the Skill Premium, and wage inequality. We then use detailed microdata from the US Census between 1997 and 2016 to estimate the parameters of labor supply,...

In this paper, we analyze how to utilize discount rates in intergenerational projects. Firstly, neoclassical decision-making is depicted in Ramsey and overlapping-generations models (OLG-models). Afterwards we investigate the utilization of time preference rates and opportunity cost rates in an...

The paper argues that, from a dynamic efficiency perspective, intersections of factor price frontiers are irrelevant to the choice of techniques. Because every change in technique involves a temporary loss or gain in both profit and per capita consumption within the transition period, its...

The effect of incomplete information on the term structure of interest rates is examined in the framework of a pure exchange economy under uncertainty. When the growth rate of the aggregate endowment is known, the term structure is flat and deterministic. When agents do not observe the...

This paper is concerned with occupational choice under risk, where agents care about their social status. It is motivated by recent developments in the 'New Economy', which indicate that status preferences possibly provide an explanation for the observed shift towards entrepreneurial...