Nontraded goods account for a major share of GDP in most economies, but have not been incorporated in the welfare analysis of monopolistic-competition models with heterogeneous productivity. This paper extends Helpman, Melitz and Yeaple (American Economic Review 94(1):300–316, <CitationRef CitationID="CR18">2004</CitationRef>) to explore...</citationref>

This paper analyzes optimal taxation in an efficiency-wage economy with involuntary unemployment, thereby extending Chamley’s (1986) optimal-tax analysis of the standard full-employment case. For this purpose, we introduce optimal savings into the shirking-unemployment model of Shapiro and...