The Atkinson-Stiglitz theorem on uniform consumption taxation breaks down if prices are endogenous. This paper investigates the implications for optimal food subsidies in China. To do so, we build a general equilibrium model where low-skilled workers have comparative advantage production of food. Food raise relative demand workers, which reduces skill premium and indirectly redistributes income...

This paper proposes a spatial model with realistic geography where continuous distribution of agents (e.g., farmers) engages in economic interactions one location from finite set cities). The structure the equilibrium consists tessellation, i.e., partition space into collection mutually exclusive market areas. After proving existence unique equilibrium, we characterize how borders and, case mob...