We investigate the optimal nonlinear wage and interest-income taxes with money as an asset, assuming that there are two types of labor, which are not perfect substitutes in production, and that each type is difficult for the policymaker to observe. It is shown that the optimal interest-income...

Assuming horizontal product differentiation and environmental R&D spillovers in duopoly, we analyze the welfare effects of R&D strategies of firms in symmetric equilibrium. When the degree of product differentiation is sufficiently great, firms benefit from technological spillovers by...

We examine the policy implications of relaxing constraints on the educational choice of individuals for economic development. Distinguishing human capital accumulation through schooling and through learning-by-doing and knowledge spillovers, we show that in the earlier stages of development,...