We conduct two policy experiments in a general equilibrium framework with an informal sector. The first deals with a liberal trade policy and the second with a decline in the unionized wage rate. In both cases, informal workers gain if capital moves between the formal and the informal segments...

We use the HOSV model of trade to find out a link between corruption and the pattern of trade, not just its effect on the volume of trade. We prove that greater corruption in labor-abundant countries will restrict the volume of world trade while corrupt capital-abundant countries promote trade....

This paper is an attempt to provide a strategic rationale behind patent infringement agreements (PIA). We interpret such agreements as yet another form of cooperation in a non-cooperative environment. If the infringement probability is not 'too' low, firms would have incentive to sign a PIA...

This paper introduces `harassment' in a simple model of bribery and corruption.

We develop a monopolistically competitive model for a closed economy without contract incompleteness. We show that if superior technology is not allowed to be transferred, integration would be the best mode of organization given that the transaction cost of intermediate input is sufficiently...

Informal economy involving unrecorded, unregistered, extra legal activities employs majority of the workforce in the developing world. Such extra legal existence of informal manufacturing and service sectors is facilitated through extortion by agents of political forces in power. Such extortion...

We propose a two-country growth model of intermediate business-services trade that captures the role of time zone differences. It is shown that a time-saving improvement in intermediate business-services trade involving production in different time zones can have a permanent impact on productivity.

We consider a situation where the relatively ‘poor’ are concerned about their relative income status with respect to a relevant reference group. Such a concern is explicitly introduced in a utility function to study the consumption behavior of the poor. We point towards a possible conflict...