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We present a simple general-equilibrium model where one industry is oligopolistic and vertically differentiated. The manufacturing of products of a higher quality requires the employment of a larger amount of skilled labour. Given an underlying skills distribution, the model determines profits,...
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The effect of labour costs on industry profits, employment and labour income is at the heart of the current European debate on industry competitiveness. High wages paid in European countries such as Germany are generally considered harmful for industry profitability. Though, high wages appear...
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An optimal education subsidy formula is derived using an overlapping generations model with parental altruism. The … model predicts that public education subsidy is greater in economies with lesser parental altruism because a benevolent … the other hand, growth is higher in economies with greater parental altruism. Cross-country regressions using the World …
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