Economists typically evaluate policies based on how such policies affect individuals' utilities. We follow this approach by taking a welfarist view of the USA's espoused policy of promoting liberty in other parts of the world. However, we take a nuanced view by investigating the type of welfare...

This Handbook entry presents a conceptual, normative overview of the subject of taxation. It emphasizes the relationships among the main functions of taxation—notably, raising revenue, redistributing income, and correcting externalities—and the mapping between these functions and various...

We constract a two-country trade model of foreign aid. The aid receiving country suffers from Harris-Todaro type of unemployment. Aid is either untied, tied to sector-specific capital, or tied to intersectorally mobile capital. We compare these types of aid by examining their terms-of-trade and...

This paper examines the welfare effects of international income transfers in a two-country, two-good model with transboundary pollution. Most existing studies have assumed that pollution negatively affects the consumer's utility function instead of influencing production. In our model, there is...

A major shortcoming of the theoretical literature on international transfers is that it is not at all clear whether the welfare results obtained are consistent with transfers flowing from rich to poor nations. This is because economists hardly ever model the difference in wealth between the...

Although one-third of workers in the USA and Germany contract supplementary private disability insurance (DI), most studies on the design of public DI systems abstract from private DI. Using unique and comprehensive contract data from a major German insurance company and representative survey...

A key issue in development economics is the explanation of core-periphery patterns around the world. Combining this issue with that of analyzing unilateral transfers (e.g. foreign aid) points in the direction of the use of New Economic Geography (NEG) models which, so far, has not been done...

This paper examines the impact of a major Australian disability reform – the 2006 Welfare to Work reform – on welfare receipt. It uses a combination of difference-in-differences and propensity score matching to identify the treatment effect. The reform reduced the generosity and increased...

We introduce credit frictions motivated by moral hazard in a general equilibrium model of international trade with two dimensions of heterogeneity and endogenous investments. Firms' competitiveness consists of capabilities to conduct process and quality innovations at low costs, whereas...