We investigate the redistributive and welfare effects of disinflation in a two-agent New Keynesian (TANK) model characterized by Limited Asset Market Participation (LAMP) and wealth inequality. We highlight two key mechanisms driving our long-run results: i) the cash in advance constraint on...

I analyze the welfare effects of a policy of modern sector enlargement (MSENL), and a policy of increasing the efficiency of on-the-job search from the urban informal sector (IEOS) in a generalized Harris-Todaro model. I show that MSENL causes a Lorenz worsening of the income distribution and...

This paper studies the conditions for a welfare-maximizing allocation of resources to the production of global public goods, such as biodiversity, the global climate, the cultural heritage, knowledge, and world peace. A global social welfare function is maximized subject to production...

Willig (1976) argues that the change in consumer's surplus is often a good approximation to the willingness to pay for a price change: if the income elasticity of demand is small, or the price change is small, then the percentage error from using consumer's surplus is small. If the price of a...

This paper uses a simple diagram to compare two pricing strategies: price-quantity packages, and a two-part tariff from the monopoly and from the welfare points of view. It is shown that in the two-type consumer case when the monopoly is concerned, the price-quantity packages strategy dominates...

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...

We investigate the welfare effect of increasing competition in an anonymous two-sided matching market, where matched pairs play an infinitely repeated Prisoner's Dilemma. Higher matching efficiency is usually considered detrimental as it creates stronger incentives for defection. We point out,...

The rise of subjective measures of well-being represents at least two important trends in the measurement of welfare or well-being. The first trend, which has already received some attention in the literature, is a shift away from preference-satisfaction accounts of individual well-being and...

To broaden the operational scope of monetary policy, several authors suggest cash abolition as an appropriate means of breaking through the zero lower-bound. We argue that the welfare costs of bypassing the zero lower-bound by getting rid of cash entirely are analytically equivalent to negative...

Innovation commons – which we define as repositories of freely-accessible, “open source” innovation-related information and data - are a very significant resource for innovating and innovation-adopting firms and individuals: Availability of free data and information reduces the...