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...

It is well known that shadow economy has many impacts on the economy and distorts competition. It is also known that shadow economy is hard to restrict without some repercussions regarding unemployment creation, investment distortions, economic growth, income distribution worsening, stock prices...

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...

This paper develops a method for solving for the dynamic general equilibrium of a deterministic continuous time overlapping generations model with a finite-horizon life-cycle. The model has isoelastic preferences and allows for general assumptions about individual endowments and demographics....

Shadow economy is harmful to the economy for various reasons. On the other hand shadow economy restriction has some repercussions. In other words, there is perhaps a sort of trade-off between the restriction of shadow economy and the resulting macroeconomic repercussions. Hence, in the present...

Age structured populations are studied in economics through overlapping generations models. These models allow for a realistic characterization of life-cycle behaviors and display intertemporal equilibrium that are not necessarily efficient. This article uses the latest developments in...

A general and practical competitive market model for trading indivisible goods is introduced. There are a group of buyers and a group of sellers, and several indivisible goods. Each buyer is initially endowed with a sufficient amount of money and each seller is endowed with several units of each...