Dynamic inconsistency provides a theoretical basis for discussions of policy credibility: when the government cannot commit its future policies, the incentive to deviate from the 'optimal' plan renders it incredible. We derive the best policy in the absence of precommitment as the feedback Nash...

A spatial model of cities is constructed by combining interaction costs between firms with indivisibility in production. The optimal allocation requires Pigouvian subsidies to firms and the externality version of the Henry George Theorem is obtained: at the optimal city size, the total Pigouvian...

Clearly there are many aggregate factors which affect all firms in the economy to some degree. Presumably there are others which differentially affect individual industries. Industry considerations aside, any particular firm would want to formulate 'own-firm' expectations incorporating aggregate...

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The effect of an economy's growth on its balance of payments has been a subject which has received a good deal of attention in the recent literature in international economics. Much of this attention derives from general dissatisfaction with the theoretical and empirical aspects of the standard...

This paper develops a simple two-country model of illegal immigration to examine the interaction among migrant labour, unemployment rates, and spending by the host country on enforcement. The analysis focusses on the dynamics of immigration policy and its role in determining the mechanism by...

We analyze the formation of a hierarchy of groups such as herds, members of a "rung" in a tennis ladder, students at a particular quality of college, or club members sharing a local public good. An individual is interested in maximizing her individual payoff which depends on a variable...

The first order effect of a productivity increment in the output sector of a monocentric city which increase wages in the city is exactly capitalized in the increment in land rent in the city. We observe this result in the "open city" model in which a worker's utility level in city i is...

We amend the static model of industry structure in Dasgupta and Stiglitz to include external benefits from a firm's R&D. Now "the market" under invests in R&D relative to the social optimum. The work of Mansfield suggests such external benefits are pervasive.

The adverse reaction to the Economic Council's proposal last year to increase tuition fees for higher education was not surprising. Students in post-secondary institutions, and the families of which they are part, comprise a significant and growing proportion of the Canadian population. Recent...