We examine the consequences of parental control over choice of wives for sons, for parental incentives to educate daughters, in a dualistic transitional economy, where preferences conflict across generations and the marriage market exhibits competitive dowry payments. Parental control generates persistence of low levels of female literacy, despite economic growth. In steady state equilibrium, t...

Rodrik (JIE 1996) argues for the use of government policy in cases where emerging countries are stuck in a low wage equilibrium because of a coordination failure. His coordination failure arises between downstream producers and their upstream intermediate suppliers when the production of high tech final goods requires a special set of differentiated intermediate goods. To qualify, intermediate ...

We examine a two-sector real business cycle model with sector-specific externalities in the production of distinct consumption and investment goods. In addition, the household utility is postulated to exhibit no income effect on the demand for leisure. Unlike in the one-sector counterpart, we show that equilibrium indeterminacy can result with sufficiently high returns-to-scale in the productio...

Developing a three-sector and four-factor general equilibrium model, this paper offers an explanation of wage inequality in a vertically fragmented production structure typical of off-shore outsourcing to developing countries like China or India. The model characterizes a typical developing economy where intermediate good is produced using capital and local low-skilled worker, traditional secto...

This paper considers a public provider’s strategic use of rationing in a market served by both public and private providers. Such a ‘mixed’ market structure is common in many industries such as health care, telecommunication, postal service, and public utilities. The technology in the private sector exhibits increasing returns: each firm can expend ‘effort’ in the form of fixed cost to reduce t...

This paper shows that in a one-sector real business cycle model with strong increasing returns in production, progressive taxation of labor income can stabilize the economy against sunspot ‡uctuations, even when the capital tax schedule is ‡at. This result is consistent with the U.S. tax code in which labor-income taxation is more progressive than capital-income taxation.

This paper seeks to study and compare the historical present-day financial performance risk profile of renewable energy fossil fuel power sectors. Our findings are as follows. First, portfolios have historically shown more attractive investment characteristics including, on average, 12% higher annual returns, 20% lower volatility 61% risk-adjusted returns. Second, investors perceive investments...

Entrepreneurial activity has been argued to be an important stimulus of growth, especially in less developed countries. However, measuring the returns to entrepreneurship is made difficult due to potential selection on the basis of unobservable abilities and the agents’ im­ perfect information about their own comparative advantage in entrepreneurship. I develop a novel extension to projection-b...