In this paper, I examine a model economy with production, search, and unemployment insurance. The introduction of capital into the economy of Wang and Williamson (2001) generates the result that optimal replacement ratios are always zero. The result arises from the decline in aggregate activity caused by unemployment insurance: both capital and labor inputs to production fall when benefits rise...

Article history: Received 29 June 2013 Received in revised form 18 November 2013 Accepted 19 November 2013 Available online 12 December 2013 Constructing a duopoly model with non-constant marginal costs and a strict Pareto criterion, this paper examines welfare effects of world-price-fixing tariff reductions accompanied by adjustments of a domestic tax. If a destination-based consumption tax is...

A Welfare-to-Work (WTW) program is a scheme of government expenditures on “passive” (unemployment compensation, social assistance) and “active” (job search monitoring, training, wage subsidies) labor market policies targeted to the unemployed. This paper studies the optimal WTW program as a recursive contract between a cost-minimizing government and a worker whose human capital depreciates duri...

This paper develops a model of FDI with reverse imports examining the impact of FDI on the home economy through the “hollowing out” effect on the domestic employment. A foreign wage threshold exists. If the foreign wage is lower than the threshold, the home firm chooses FDI. The threshold depends on a FDI fixed cost and a demand parameter. A welfare analysis shows that another foreign wage thre...

in welfare economic studies, because of the differences among households scale, we cannot consider household expenditures without attention to this factor. a simple method to consider household scale in welfare analysis is the usage of the per capita expenditure. but, the usage of per capita expenditure ignores economies of scale. in fact, per capita expenditure is a biased variable, and underv...

Financing through crowdfunding is growing rapidly, especially for start-ups. Investment financing via crowdfunding is integrated with the real side of the firm as future consumers may potentially provide all or part of the required resources. We derive the optimal pre-sale crowdfunding contract of a financially constrained monopolist and analyze its implications for production, investment and w...

Using panel data from rural Ethiopia, the article discusses the determinants of consumption growth (1989–1997), based on a microgrowth model, controlling for heterogeneity. Consumption grew substantially, but with diverse experiences across villages and individuals. Rainfall shocks have a substantial impact on consumption growth, which persists for many years. There also is a persistent growth ...

This paper investigates a general procedure to estimate second-order approximations to a DSGE model and compares the performance with the widely used estimation technique for a log-linearized economy on a version of new Keynesian monetary model. It is done in the context of posterior distributions, welfare cost, and impulse response analysis. Our findings include the followings. First, we find ...

Drawing on the stylized facts and evidences, in a computable general equilibrium (CGE) model, this paper examines the impact on TFP of North–South, North–North trade-related triangular R&D spillovers. By constructing different technology appropriation parameters based on embodied and disembodied R&D, absorption and learning effects, it shows: (i) North–South R&D flows have a positive impact on ...

This paper investigates the implications of U.S. withdrawal on environmental effectiveness, economic efficiency, and the distribution of compliance costs taking into account market power of the Former Soviet Union (FSU) on emission permit markets. While exercise of market power on behalf of FSU under U.S. compliance has no environmental impact as compared to competitive permit trade, it prevent...