International Journal of Economic Theory最新文献

This paper explores the impact of fiscal policies on growth, welfare, and public deficits in tertiary education financing using a two-sector growth model. It evaluates trade-offs between public and private funding, comparing scenarios with and without budget deficit constraints. The results suggest that shifting to a user fee system can promote growth, but growth and welfare cannot be maximized simultaneously. For Colombia, increasing government spending on education, such as expanding infrastructure or hiring more teachers, improves welfare, while subsidies for user fees are ineffective. The study provides insights into the efficiency of mixed funding systems for higher education.

This study extends the Direct Technical Change model to explore how tourism shocks influence sectoral competitiveness, wages, skill premium, technological knowledge, and economic growth. Tourism impacts the economy by reallocating labor from production to services and stimulating R&D, disproportionately benefiting skilled-labor-intensive sectors and fostering innovation. By incorporating labor dynamics and technological absorption, this study bridges gaps in existing literature, offering actionable insights for policymakers to drive sustainable and inclusive growth. Numerical simulations corroborate the theoretical findings, highlighting scenarios where R&D-driven innovation outweighs labor reallocation losses, emphasizing tourism's potential as a catalyst for innovation and long-term economic development.

Wage inequality within rural areas refers to the wage inequality between the modern and traditional agricultural sectors. In developing countries, the development of modern agriculture is an important factor affecting this inequality. This paper establishes a general equilibrium model to investigate this impact under the framework of labor transfer. We found that capital subsidy policies for modern agriculture will be conducive to expanding the scale of modern agriculture and narrowing wage inequality within rural areas. Conversely, wage subsidies for modern agriculture would widen wage inequality within rural areas, despite facilitating the transition of traditional agricultural labor into modern agriculture.

This study considers an endogenous competition mode between price and quantity and explores policy interaction between emission tax and privatization when a vertically integrated state-owned enterprise competes with a downstream firm that purchases inputs from an upstream supplier in its supply chain. We find that when the product substitutability is low (high), firms choose Bertrand (price-quantity) competition under a nationalization regime, whereas they choose quantity-price (Cournot) competition under a privatization regime. We demonstrate that an institutional change with privatization and emission tax could switch market competition mode from aggressive Bertrand (price-quantity) to conservative Cournot competition if (unless) the product substitutability is intermediate, which leads to improved (reduced) welfare. Our findings suggest that appropriate coordination between privatization and environmental policies in a vertical relation can enhance welfare in an era of environmental transition.

In a market with discrete prices, the seller provides verifiable information to buyers with privately known tastes, possibly horizontally differentiated. We present a necessary and sufficient condition, called the unraveling criteria, to achieve effective unraveling at every prudent rationalizable outcome, which extends pairwise monotonicity in a more general framework. The unraveling criteria are satisfied if we can rank seller types from the ones with the highest to the ones with the lowest sales at every price, reminiscent of vertical differentiation. We observe that cautiousness, embodied in prudent rationalizability, plays a specific role in achieving effective unraveling.

This paper develops a small open Harris-Todaro model with intersectoral capital mobility and the negative externality of pollution to analyze the effects of the pollution tax on urbanization and GDP. We demonstrate that an increase in the pollution tax leads to a decrease in the level of urbanization. Furthermore, we show that if the ratio of the production value of manufactured goods to GDP is smaller than the ratio of the production value of agricultural goods to GDP, then a rise in the pollution tax results in an increase in GDP.

In this paper, we examine the findings on tax pass-through and tax incidence in a differentiated duopoly when the owner of each firm hires a biased manager. We first show that irrespective of the mode of product market competition, the tax pass-through and tax incidence are higher when owners hire biased managers compared to the case of no delegation. We then consider the issue of tax pass-through and tax incidence when the owners understate the profit to lower the tax liability. Surprisingly, we find that when firms understate their profit, hiring biased managers further amplifies the tax pass-through and tax incidence under an ad valorem tax. However, the results remain the same under specific taxes.