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Immigration policies in western democracies have often been contrary to the predictions of the mainstream theory of international economics. Political parties that are predicted to adopt policies beneficial for lower-income constituents have not protected workers from labor-market competition. Nor have workers been protected from a fiscal burden of financing incomes and benefits for welfare-dependent immigrants. We explain the contradiction by immigrants being future voters. We give a hearing to alternative interpretations.

This paper develops a two-country model of intra-industry trade with trade costs that can be reduced by public investment in an international infrastructure capital, the stock of which accumulates over time. Depending on the trade costs and international distribution of manufacturing firms, equilibrium patterns of trade are determined, and national welfare in each country is affected by these trade patterns. Taking into account the relationship between trade costs and national welfare, the governments carry out a dynamic game of public investment. We show that the dynamic equilibrium of the policy game may exhibit history dependency, if the initial stock of international infrastructure is smaller (larger) than a threshold level, the infrastructure stock decreases (increases) over time, and the world economy will end up in autarky (two way free trade) in the long run. We also show that international cooperation is beneficial in the sense that it may enable the world economy to escape from a &ldquo, low development trap&rdquo

We construct a modified Hotelling‐type model of two media providers, each of whom can issue fake and/or real news and each of whom can invest in the debunking of their rival's fake news. The model assumes that consumers have an innate preference for one provider or the other and value real news. However, that valuation varies according to their bias favouring one provider or the other. We demonstrate a unique subgame perfect Nash equilibrium in which only one firm issues fake news and we show, in this setting, that increased polarisation of consumers (represented by a wider distribution) increases the prevalence of both fake news and debunking expenditures and is welfare‐reducing. We also show, inter alia, that a stronger preference by consumers for their preferred provider lowers both fake news and debunking. Finally, we compare monopoly and duopoly market structures in terms of 'fake news' provision and show that a public news provider can be welfare‐improving. [ABSTRACT FROM AUTHOR] email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The purpose of this paper builds a model for the loyalty of domestic travelers. We gathered research data from 345 consumers in Nha Trang City, Khanh Hoa Province, Vietnam. The research model was proposed from previous researches. Besides, we applied the partial least squared structural equation modeling (PLS-SEM) with SmartPLS software for data analysis. The research results showed the moderating effect of diversity in the relationship between auxiliary service and satisfaction to the loyalty of domestic travelers found significant.

Bio-geometric and Psycho-geometric are theories developed since 1978 by scientists in the world. The cores of this theory are five geometric shapes each of which describes a type of human personality relating to communication, language, interaction, career choice, stress relief and decision making. This study is discovering the relationship between Bio-geometric and Psycho-geometric and the career with logical intelligence of students, through the students’ choices of the shapes (circle, box, triangle, rectangle or squiggle) which show that there is a relationship between Bio-geometric and Psycho-geometric with career and logical intelligence of students in some universities in Hanoi. The students with box, triangle and squiggle geometry often have better IQ than students with Geometric shapes round and rectangle. This relationship is significant in recognizing the ability to think through geometric observations

The purpose of this paper is to model the influence of Kantian moral scruples in a dynamic environment. Our objectives are twofold. Firstly, we investigate how a Nash equilibrium among agents who have moral scruples may ensure that the exploitation of a common-property renewable resource is Pareto efficient at every point of time. Secondly, we outline a prototype model that shows, in an overlapping generation framework, how a community’s sense of morality may evolve over time and identifies conditions under which the community may reach a steady-state level of morality in which everyone is perfectly Kantian.

This paper examines the relationship between countries’ bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population are educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.

The political-economy view of public policy is that policies that do not have majority support among voters arise because of a principal-agent problem that impedes voter disciplining of policy decisions of political representatives. We study a case in which voter disciplining could take place and the policy decision was a choice between electoral popularity and the prospect of winning the Nobel Peace Prize. The background for our model is the electorally-unpopular open-door refugee policy of German chancellor Angela Merkel. Our study motivates the question whether, because of the compromise of democratic accountability, it should be permissible for the Nobel Peace Prize to be awarded to politicians, either as incumbents or after they have left political office.

This paper examines the relationship between countries’ bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population are educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.

This paper defines the concept of feedback Kant-Nash equilibrium for a discrete-time model of resource exploitation by infinitely-lived Kantian and Nashian players, where we define Kantian agents as those who act in accordance with the categorical imperative. We revisit a well-known dynamic model of the tragedy of the commons and ask what would happen if not all agents are solely motivated by self interest. We establish that even without external punishment of violation of social norms, if a sufficiently large fraction of the population consists of Kantian agents, the tragedy of the commons can be substantially mitigated.

In this work, we establish a new estimate result for fractional differential inequality, and this inequality is used to derive a robust sliding mode control law for the fractional-order (FO) dynamic systems. The sliding mode control law is provided to make the states of the system asymptotically stable. Some examples are given to illustrate the results.

McCune-Albright syndrome (MAS), a rare genetic disorder, affects multiple organs and classically presents with the triad of polyostotic fibrous dysplasia (FD), skin hyperpigmentation (café-au-lait spots) and precocious puberty. Diagnosis occurs when patients manifest at least two of these three symptoms. We describe a 4-year-old girl who was admitted to our hospital due to recurrent vaginal bleeding, initially diagnosed as precocious puberty. On brain MRI, abnormalities in the maxillary and occipital bones were compatible with FD. Clinical examination after craniofacial bone lesions and clinical signs indicated MAS revealed abnormally pigmented macules on the neck and back, which were initially overlooked. No abnormal hormone tests were observed. Precocious puberty is the most common MAS-associated symptom that results in the admission to the hospital, whereas the clinical manifestation of FD in the first years of life is usually equivocal and probably has not been discovered by parents. Thus, comprehensive medical examinations are necessary to obtain a prompt and proper diagnosis.

This paper demonstrates that technological progress in production of renewable energy can influence the extraction path of fossil fuels indirectly by a change in the equilibrium interest rate. We show in a simple model that the indirect effect can be so strong that first-period or even aggregate extraction levels rise with green technological progress, contrary to popular expectations.

In the current trend, the integration process in the economic fields, literature socialization with other countries in the world has been developing strongly. Vietnam's social management has shifted from a central planning mechanism to a market mechanism. The implementation of the policy of socialization in the areas of interest to implement, including sports. Through the development of sport socialization will create conditions for it to develop stronger and more diversified towards service business. Building and developing social and professional organizations in sports will attract a large number of the masses to participate, thereby promoting the resources and creativity of the people in sport development. This researchis conducted with the aim of developing futsal in Vietnam, which is really professional and is the basis for the planning of futsalmanagement in the futsal clubs and training centers on the whole is better in the future. Based on the results of the research on the status of socialization by quantitative and qualitative research methods, we have suggested six groups of solutions consist of Innovation, Capacity Building and Management Effectiveness on; Strengthen the Propagation, Education and Awareness of Development in The professional Environment; Promote the Application of Science and Technology and Sports Medicine in the Training and Organization of Futsal Competitions; Evaluation Results of the Feasibility and Importance of Each Solution in the Solution Group: Step by Step Expand the Futsal Market; Enhance and Improve the Efficiency of Capital Management of Futsal; Develop the Relationship Between the Club and Partners Involved in Futsal. They have been proposed to contribute to improving the socialization of futsal in Vietnam.

We present a model of market hyper-segmentation, where a monopolist acquires within a short time all information about the preferences of consumers who purchase its vertically differentiated products within a given period. The firrm offers a new price/quality schedule after each commitment period. Lower consumer types may have an incentive to delay their purchases until next period to obtain a better introductory offer to new customers. The monopolist counters this incentive by offering higher informational rents. Considering the dynamic game played by the monopolist and its customers, we find that there is always a Markov perfect equilibrium (MPE) in which the firm immediately sells the good to all its customers, offering the Mussa-Rosen static equilibrium schedule to first time customers (and getting full commitment profits). However, if the commitment period between two offers is long enough, there is another MPE, where the number of customers that are served expands only gradually. Contrary to the Coasian result for a durable-good monopoly, we find that in both equilibria the profit of the monopolist increases (and the consumers' expected surplus decreases) as the interval of commitment shrinks. The model yields policy implications for regulation on information collection and commitment period.

Using a specific-factors' model, with two goods (a shift-working good and a non-shift-working good), three factors (capital specific to shift-working, land specific to non-shift-working and labor) and two countries (Home and Foreign), which are located in different time zones, we highlight the impact of trade in labor services via communication networks on factor prices and production patterns. If two countries are identical in size, then under free trade in labor services, all workers work only in their local daytime, and night shift in each country is performed by imported labor services supplied by residents of the other country in their local daytime. Night-time wage becomes the same as daytime wage (a wage equalization result). Other factor prices are also equalized. In both countries, capital rental rate increases, while land rent decreases. However, if two countries are different in size, trade in labor services does not equalize wages: in the large country, wages for night-shift workers are higher than daytime wages and some residents work at night; in the small country, daytime wages become higher than night-time wages and no one works at night, and night-shift work is done by imported labor services from the large country. Land rent in the small country decreases. Land rent in the large country may or may not decrease, but it is always higher than in the small country. Capital rental rates in both countries are equalized and increase.

We study the optimal delegation problem which arises between the median voter (writer of the constitution) and the (future) incumbent politician when not only the state of the world and but also the politician’s type (preferred policy) are the policy-maker’s private information. We show that it is optimal to tie the hands of the politician by imposing him/her both a policy floor and a policy cap and delegating him/her the policy choice only in between. The delegation interval is shown to be the smaller the greater is the uncertainty about the politician’s type. These results apply outside the specific problem to which our model is applied here.

The aim of this research is to explore relationship both customer satisfaction and loyalty of internet users in Vietnam to stay with their current provider among existing Internet Service Providers (ISP) in the context of Vietnam telecommunication sector. Survey data was collected from 200 people in HCM City. The research model is proposed from the study of customer satisfaction and loyalty of some authors in abroad. The reliability and validity of the scale were tested by Cronbach’s Alpha, Average Variance Extracted (Pvc) and Composite Reliability (Pc). The analysis results of structural equation model (SEM) showed that the customer satisfaction and loyalty have a relationship with each other.

In this article, we consider a knowledge accumulation problem within an organization that cannot prevent the worker from quitting and using the knowledge outside the organization. We show that knowledge accumulation is delayed: The fraction of working time allocated to knowledge creation is highest at the early career stage, falls gradually, then rises again, before falling finally toward zero. We determine the effect of a change in the severity of the enforcement problem (or the specificity of knowledge). We also discuss the form of the optimal life-cycle wage profiles, the role of the initial knowledge level, and the role of discounting.

Given its significance in practice, piecewise linear taxation has received relatively little attention in the literature. This paper offers a simple and transparent analysis of its main characteristics. We fully characterize optimal tax parameters for the cases in which budget sets are convex and nonconvex respectively. A numerical analysis of a discrete version of the model shows the circumstances under which each of these cases will hold as a global optimum. We find that, given plausible parameter values and wage distributions, the globally optimal tax system is convex, and marginal rate progressivity increases with rising inequality.

There has been a shift of manufacturing industries from Organization for Economic Co-operation and Development (OECD) countries to emerging countries. In a competitive global economy increases in productivity in any country are generally welfare-enhancing. The established industrialized countries can suffer from the collapse of some industries, and from the associated increase in unemployment. We model this process and analyze the interactions between various rigidities that cause it, such as the minimum viable scale of an industry or the number of workers who lack the necessary skills to change jobs. When, under free trade, the technology transfer causes the manufacturing industry to collapse in the home country, it experiences a discrete drop in welfare and the price of the manufactured good rises sharply. Further transfers may reverse these results. The optimal level of protection is the minimum size required to operate. Conditions that make supporting an ailing industry worthwhile can be interpreted i...

This paper is a brief review of the literature on contests, with focus on rent-seeking. A fairly general contest model is presented. We show that the Tullock contest model and the first-prize sealed-bid auction model are obtained as special cases. Some important modifications of the basic model are reviewed: hierarchical rent-seeking, rent-seeking under risk aversion, insecure rents, sabotage in rent-seeking contests, contest design, commitment and endogenous order of moves, and dynamic rent-seeking.

We propose a new criterion reflecting both the concern for rights and the concern for welfare in the evaluation of economic development paths. The concern for rights is captured by a pre-ordering over combinations of thresholds corresponding to floors or ceilings on various quantitative indicators. The resulting constraints on actions and on levels of state variables are interpreted as minimal rights to be guaranteed to all generations, for intergenerational equity purposes. The level of these rights are endogenously chosen, accounting for the “cost in terms of welfare” of granting them. Such a criterion could embody the idea of sustainable development. We provide an axiomatization of such a criterion and characterize the tension between rights and welfare in a general economic framework. We apply the criterion to the standard Dasgupta–Heal–Solow model of resource extraction and capital accumulation. We show that if the weight given to rights in the criterion is sufficiently high, the optimal solution is on the threshold possibility frontier. The development path is then “driven” by the rights. In particular, if a minimal consumption is considered as a right, constant consumption can be optimal even with a positive utility discount rate. In this case, the shadow value of the right plays an important role in the determination of the rate of discount to be applied to social investment projects., Les auteurs proposent un nouveau critère reflétant à la fois le souci des droits et le souci du bien-être dans l’évaluation des sentiers de développement économique. La préoccupation pour les droits est saisie par une structure de préférences envers des combinaisons de seuils de divers indicateurs quantitatifs. Les contraintes sont interprétées comme des droits minimaux à garantir à toutes les générations. Les niveaux de ces droits sont choisis de façon endogène, en tenant compte du coût en termes de bien-être. Un tel critère pourrait incarner l’idée du développement durable. La tension entre droits et bien-être est caractérisée dans un cadre économique général. Les auteursappliquent le critère au modèle de Dasgupta-Heal-Solow. Ils montrent que si le poids accordé aux droits dans le critère est suffisamment élevé, la solution optimale se situe sur la frontière des seuils. Le chemin de développement est alors « piloté » par les droits. Plus précisément, si une consommation minimale est considérée comme un droit, la consommation constante peut être optimale même avec un taux d’actualisation positif. Dans ce cas, la valeur implicite du droit joue un rôle important dans la détermination du taux d’actualisation à appliquer aux projets d’investissement social.

ACL-2; International audience; This paper provides general theorems about the control that maximizes the mixed Bentham–Rawls (MBR) criterion for intergenerational justice, which was introduced in Alvarez-Cuadrado and Long (2009). We establish sufficient concavity conditions for a candidate trajectory to be optimal and unique. We show that the state variable is monotonic under rather weak conditions. We also prove that inequality among generations, captured by the gap between the poorest and the richest generations, is lower when optimization is performed under the MBR criterion rather than under the discounted utilitarian criterion. A quadratic example is also used to perform comparative static exercises: it turns out, in particular, that the larger the weight attributed to the maximin part of the MBR criterion, the better-off the less fortunate generations. All those properties are discussed and compared with those of the discounted utilitarian (DU, Koopmans 1960) and the rank-discounted utilitarian (RDU, Zuber and Asheim, 2012) criteria. We contend they are in line with some aspects of the rawlsian just savings principle.

Exploiting prior knowledge in the Bayesian learning process is one way to improve the quality of Bayesian model. To the best of our knowledge, however, there is no formal research about the influence of prior in streaming environment. In this paper, we address the problem of using prior knowledge in streaming Bayesian learning, and develop a framework for keeping priors in streaming learning (KPS) that maintains knowledge from the prior through each minibatch of streaming data. We demonstrate the performance of our framework in two scenarios: streaming learning for latent Dirichlet allocation and streaming text classification in comparison with methods that do not keep prior.

This paper models an international contest for government procurement as a dynamic game between a domestic firm and a foreign firm. We show that trade liberalization, in the form of a reduction in bias against the foreign firm, improves both domestic and global welfare if (i) either the foreign firm's profit is sufficiently large or (ii) the initial degree of home bias is sufficiently small. If the initial home bias is large, a small reduction in the bias may reduce welfare.

This paper models liberalization of government procurements as admitting entry of foreign firms in a contest among potential rent seekers. It contributes to the literature on how institutions influence socially desirable outcomes. Liberalizing procurements reduces wasteful domestic lobbying but also increases the likelihood that a foreign firm will capture the rent. A main result is that the domestic welfare change is not monotonic in the foreign firms' abilities. Furthermore, we show that domestic liberalization policies can be inefficient from the global point of view because foreign lobbying costs can outweight productive efficiency.

We present a model of bilateral monopoly between resource-importing countries and a resource-exporting country. We show that there exists a threshold level of marginal cost beyond which the resource-importing coalition would prefer bilateral monopoly to free trade. In the case of two non-collusive asymmetric importing countries, we show that asymmetry of market sizes also plays a role in determining the welfare gains under free trade or tariff war. As importing countries become more asymmetric, their aggregate welfare is more likely to be higher under the tariff war.

This paper proposes a welfare criterion that balances the need for development and the concern for the least advantaged generations, and explores its implications. This criterion, called the mixed Bentham–Rawls criterion, moderates the effect of discounting, yet permits some degree of intertemporal trade-off. It is a weighted average of two terms: (a) the sum of discounted utilities and (b) the utility level of the least advantaged generation. We derive necessary conditions to characterize growth paths that satisfy our criterion, and show that in some models with familiar dynamic specifications, an optimal path exists and displays appealing characteristics.

We consider two dynamic games of foreign aid. Model 1 deals with the case where donor countries continually feel the warm glow from the act of giving. Model 2 postulates that donors will stop giving aid when a target level of development is reached. In Model 1, there are multiple equilibria that can be Pareto ranked. In Model 2, the equilibrium strategies are nonlinear functions of the level of development. The flow of aid falls at a faster and faster rate as the target is approached. An increase in corruption will increase the flow of aid.

This paper examines how two geographically separated ports compete for a market consisting of manufacturing firms located between them. There is a service firm in each port, and these two firms, taking the infrastructure provided by their governments as given, compete in prices. The governments compete in terms of investment in infrastructure. This paper shows that there are cases in which both the firm and the government in the port that has a longer history may have the first-mover advantage. In particular, the government can provide a credible threat by overinvesting in infrastructure.

Purpose – The purpose of this paper is to investigate conditions under which voters’ comparison of relative performance between adjacent jurisdictions can help reduce rent‐seeking by politicians.Design/methodology/approach – A theoretical model was developed to examine the effectiveness of yardstick competition in restraining political corruption, first under a static setting, and then under a dynamic setting, using optimal control theory and differential games. It is assumed that voters compare the performance of their incumbent government with that of a neighboring jurisdiction. The incumbent can provide a public good and extract rent, which are financed by imposing a distortionary tax on the population. Politicians derive utility from rent as well as from popularity. The stock of reputation builds up or decays over time. Reputation is decreasing in rent appropriation.Findings – Without assigning an ex ante type on the politician, the paper demonstrates the possibility that yardstick competition itself ...

In May 1968, Ngo Van was working in a Paris factory and soon afterwards he wrote one of the few accounts of what happened by a rank-and-file industrial worker that was published close to the time. His perspective was informed by his previous political experience. He had been a Trotskyist militant in Vietnam in the 1930s and 1940s, imprisoned and tortured both by the French imperialists and Ho chi Minh's Stalinists. Exiled in Paris in the late 1940s, he soon broke with the French Trotskyists over their dogmatic commitment to formulae such as the ‘deformed workers’ state’. In 1968, his political discussions were focused on a group of workers meeting with the Marxist intellectual Maximilien Rubel, and committed to socialism through the self-activity of the working class. Written by an advocate of rank-and-file workers’ councils, Van's nuanced account is sensitive to, for example, generational differences in workforce attitudes to les evenements and the historical resonances of the conflicting symbols of the ...

Analyzing texts from social media often encounters many challenges, including shortness, dynamic, and huge size. Short texts do not provide enough information so that statistical models often fail to work. In this paper, we present a very simple approach namely, bag-of-biterms that helps statistical models such as Hierarchical Dirichlet Processes HDP to work well with short texts. By using both terms words and biterms to represent documents, bag-of-biterms BoB provides significant benefits: 1 it naturally lengthens representation and thus helps us reduce bad effects of shortness; 2 it enables the posterior inference in a large class of probabilistic models including HDP to be less intractable; 3 no modification of existing models/methods is necessary, and thus BoB can be easily employed in a wide class of statistical models. To evaluate those benefits of BoB, we take Online HDP into account in that it can deal with dynamic and massive text collections, and we do experiments on three large corpora of short texts which are crawled from Twitter, Yahoo Q&A, and New York Times. Extensive experiments show that BoB can help HDP work significantly better in both predictiveness and quality.

Using a model with moral hazard and bankruptcy costs, we show that the direction of intertemporal trade between countries depends on differences in their autarkic distributions of wealth. We also examine the consequences of redistribution policies and bail-out policies in this framework. We show that, in the presence of bankruptcy cost and capital market imperfections due to moral hazard, the very rich and the very poor do not undertake any risk and choose to be passive lenders. Only individuals whose wealth lies within an intermediate range choose to become entrepreneurs. Redistributive policies influence the supply of entrepreneurship and autarkic interest rates.

We develop a new framework for the analysis of the impact of trade liberalization on the wage structure and on welfare. Our model focuses on the decision of workers to accumulate firm-specific skills, by “on-the-job” training, knowing that this means their future wages will have to be negotiated, and that the outcome of negotiation will depend on the profitability prospect of firms operating in a new trading environment. We show that trade liberalization may reduce the welfare of a developing country because of its adverse effect on skill accumulation. We also explore the effects of trade liberalization on the wage gap between skilled and unskilled workers.

I. Introductory Remarks The dynamics of knowledge generation and diffusion have been fundamentally transformed by the rapid and cumulative progress in science and technology (ST Popp 2003; Shapiro 2000; and Lanjouw and Schankerman 1999). Reinforced by rapid advances in transportation technologies and logistics, the ICT revolution has changed significantly the meaning of national borders and distances, and the organizational modalities in value creation. In particular, many economies have shifted towards more decentralization, greater dispersion (or deverticalization), and leaner systems in their production and services activities, stimulating further the proliferation of national and cross-border production arrangements and service platforms. This trend, often driven by foreign direct investment (FDI) among developing economies, is especially evident since the mid-1980s (Yusuf et al. 2003; Urata 2001; Borrus, Ernst, and Haggard 2000; Ito and Krueger 2000; and Lipsey 2000). In the process, what separates developed from developing economies is the substantial, and widening, gap in knowledge creation, ownership of intellectual property (IP) assets, and the sophistication of applied industrial technologies and organizational techniques (Stiglitz 2003, p. 4; and Romer 1992, pp. 64-66). Meanwhile, the liberalization and deregulation of various cross-border transactions and of domestic product and factor markets have been in progress in virtually all economies, regardless of their former shades of ideology. This has led to a huge expansion of trade and financial flows as a response to the substantial increase in world demand for goods and services as well as the emergence of vast and new business opportunities across the globe. Additionally, value creation is now subject to intensified global competition and commercial rivalries, and more sophisticated and exacting consumer choice. (2) In the process, most manufactured goods have become standardized and are produced or customized in mass for greater economies of scale, scope, and agglomeration. Commoditization helps to counterbalance the falling prices and squeezed profit margins of many manufactures; the shorter product cycles and lead-time advantage; and the rapid obsolescence of costly technologies, equipment, and acquired skills. (3) All these developments have enhanced greatly the intrinsic importance of inventive entrepreneurship and the technology-driven small--and medium-sized enterprises (SMEs) as a major source of competitiveness in developed and, to a rising degree, developing economies. (4) Indeed, about nine-tenths of gross domestic product (GDP) of the United States are generated (directly and indirectly) from innovations and inventions since 1870 (Baumol 2002, pp. 133-34), yet another indicator of the much larger gains in total factor productivity (TFP) among the KBEs (more later in the text). As such, IP and the evolving global and regional regimes on intellectual property rights (IPRs) will have an even more profound and unprecedented influence on the social well-being, technological capabilities, and economic progress of interdependent economies in the years to come, those in the developing region especially. …

The paper analyzes a model of strategic trade policies in the presence of international cross-ownership of firms that are heterogenous both in terms of costs and in terms of extent of foreign ownership. The equilibrium pattern of taxes and subsidies is characterized for any arbitrary cross-ownership profile, and any number of heterogenous firms. The equilibrium subsidy (or tax) given to any firm is shown to depend, in a separable manner, on the firm’s characteristics and on the covariance of the distribution of cost and foreign ownership across firms. A neutrality theorem is proved concerning the Nash equilibrium of the game between governments: in equilibrium, the pattern of trade, the value of each firm, and world welfare are independent of the ownership pattern.

We model the endogenous evolution of the de facto property rights regime and explore the impact of trade on de facto property rights regimes and on welfare. The model takes into account the dynamics of the stocks of natural resources, and the effect of trade on resource utilization. We show that the opening of trade can change the de facto property rights regime of an economy. Such changes may lead to a greater stock of resource, but are not always beneficial to society due to the enforcement costs. Thus, the opening of trade can be harmful.

We derive the characteristics of firm-specific strategic trade policies when industries consist of heterogenous firms, and show how the informational requirements for policy design are thereby expanded. A knowledge of the Herfindahl index of concentration of the foreign industry is required for the design of optimal protection for domestic firms. It is shown that optimal firm-specific tariffs reduce the degree of foreign concentration, thus shifting rents to domestic firms.

The paper models international rivalry between a domestic firm that is going through a learning-by-doing phase, and a mature foreign rival. It is shown that the optimal production subsidy for the domestic firm depends on the degree of strategic sophistication of the foreign firm. Optimal production subsidy rules are derived under various scenarios. They are shown to be very sensitive to the specification of the game between the domestic and the foreign firms. Whether the optimal subsidy should decrease over time depends on the strategic sophistication of the foreign firm.

We investigate economic depreciation of natural capital for cases of nonstationary output prices, technology, and interest rates. For the former two cases (exogenous movements in prices and technology), constant consumption emerges under a strategy of investing to cover off economic depreciation. The interest rate case requires a modified sinking fund strategy.

A model is developed to study the implications of the presence of rent-opposing activities for the measurement of deadweight losses and for cost–benefit analysis. The analysis provides an upper bound on the social cost of rent-seeking in the presence of potential rent-opposers. Remarks are offered on the interactions between merits and skills in the determination of success in rent-seeking, and on the pervasiness of corruption in developing economies.

This chapter sets up a simple framework for the analysis of income contingent loans, under adverse selection and moral hazard. Economic agents face credit constraints, and consumption smoothing is not perfect when the interest rate on borrowing is higher than that on lending. An income contingent loan scheme contributes toward consumption smoothing across states of nature (or individual types) within any period, as well as across periods. We argue in favour of a scheme of piecewise linear income-dependent repayment rates. This is a dynamic generalization of the scheme of piecewise linear income taxation that Apps, Long and Rees (2011) investigated in a static setting.

This paper demonstrates that technological progress in production of renewable energy can influence the extraction path of fossil fuels indirectly by a change in the equilibrium interest rate. We show in a simple model that the indirect effect can be so strong that first-period or even aggregate extraction levels rise with technological progress.

We study a dynamic game involving a fossil fuel exporting cartel and a coalition of importing countries that imposes carbon taxes. We show that there exists a unique Nash equilibrium, where all countries use feedback strategies. We also obtain two Stackelberg equilibria, one where the exporting cartel is the leader, and one where the coalition of importing countries is the leader. Not surprisingly, the world welfare under the Nash equilibrium is lower than that under the social planning, even though both solutions have the same steady state. Comparison of the Stackelberg equilibria with the Nash equilibrium is performed numerically. All our numerical examples reveal that world welfare under the Nash equilibrium is higher than that under the Stackelberg game where the exporting cartel is the leader. The worst outcome for world welfare occurs when the importing coalition is the Stackelberg leader.

Parents care about their children, spend resources on educating them and bequeath them some physical and/or human capital. Here we argue that the actions of the parents have an influence, not only on the productive possibilities open to the children (through the capital they inherit) but also on their tastes and attitudes. We investigate the resulting dynamics of this idea. Several influences are identified but one startling result is that, if inheritance has a large influence on people's attitude to work, the pattern of behavior becomes completely unpredictable after a few generations.

In a world where firms are oligopolists, is it possible to create a customs union that raises the welfare of member countries without hurting non-member countries? We give sufficient conditions for an affirmative answer.