This dissertation consists of three essays which investigate the economic implications of monetary and fiscal policies on the macroeconomy. The first essay focuses on the following question: how can we explain the observed behavior of aggregate inflation in response to e.g. monetary policy changes? Mankiw and Reis (2002) have proposed sticky information as an alternative to Calvo sticky prices ...

Subsidy programs are typically accompanied by large costs due to the difficulty of screening those who should receive the program from those who would have purchased the good anyway. We design and implement a platform intended to increase the take-up of improved sanitation services by targeting the poorest households for subsidies. The project proceeds in two stages: we first create a demand mo...

We investigate an automobile supply chain where a manufacturer and a retailer serve heterogeneous consumers with electric vehicles (EVs) under a government’s price-discount incentive scheme that involves a price discount rate and a subsidy ceiling. We show that the subsidy ceiling is more effective in influencing the optimal wholesale pricing decision of the manufacturer with a higher unit prod...

The paper analyzes “subsidy games” between countries in order to attract foreign direct investment (FDI) from a third country. The winner of this game results from the interaction of two factors, relative country size and employment gains from FDI: a large (or “central”) country is more likely to attract FDI, and so is a country with high unemployment. The subsidy equilibrium is compared with t...

We investigate an automobile supply chain where a manufacturer and a retailer serve heterogeneous consumers with electric vehicles (EVs) under a government’s price-discount incentive scheme that involves a price discount rate and a subsidy ceiling. We show that the subsidy ceiling is more effective in influencing the optimal wholesale pricing decision of the manufacturer with a higher unit prod...

The government as a policy maker wishing to promote remanufacturing and proper disposal of hazardous old products which are harmful to environment has taken many actions, ranging from carbon regulation and financial incentives such as trade-in subsidy. However, carbon tax can result in loss of profit for firms to some degree, so the government has to give other subsidy to balance the profits an...

Despite some empirical evidence to the contrary, government subsidies to higher education are usually presumed to be inequitable because college-educated workers earn more than less educated workers. Using a simple model of educational choice with endogenous wages and two worker types, I obtain strong results concerning this conflict between effi ciency and equity —namely that equity and effi c...

BACKGROUND To assess the effect of policies supporting local medicine production to improve access to medicines. METHODS We adapted the WHO/HAI instruments measuring medicines availability and prices to differentiate local from imported products, then pilot tested in Ethiopia and Tanzania. In each outlet, prices were recorded for all products in stock for medicines on a country-specific list....

The Affordable Medicines Facility for malaria (AMFm) was conceived as a global market-based mechanism to increase access to effective malaria treatment and prolong effectiveness of artemisinin. Although results from a pilot implementation suggested that the subsidy was effective in increasing access to high-quality artemisinin combination therapies (ACTs), the Global Fund has converted AMFm int...

Remanufactured products offer better environmental benefits, and governments encourage manufacturers to remanufacture through various subsidy policies. This practice has shown that, in addition to product sales, remanufactured product can also achieve its value through social donation. Based on the remanufactured product value realization approaches, governments provide two kinds of incentive p...