In this paper, we consider an economy with infinitely many commodities and non-convex production sets. We propose a definition of the marginal pricing rule which allows us to encompass the case of smooth and convex production sets. We also show the link with the definition used in a finite...

It is by now widely appreciated that institution building is at the heart of the transition process. Without functioning institutions markets cannot work effectively and the sustainability of the economic transition process can be undermined. The crisis in Russia provided just one piece of...

This line of research considers econometric methods for dealing with agent-level consumer choice data in the presence of binding non-negativity constraints. Specifically, the Kuhn-Tucker (KT) model and its dual counterpart (Wales and Woodland (1983), Lee and Pitt (1987), Phaneuf (1999), Phaneuf,...

No abstract.

The Lorenz curve relates the cumulative proportion of income to the cumulative proportion of population. When a particular functional form of the Lorenz curve is specified it is typically estimated by linear or nonlinear least squares assuming that the error terms are independently and normally...

This article studies the design of optimal mechanisms to regulate entry in natural oligopoly markets, assuming the regulator is unable to control the behavior of firms once they are in the market. We adapt the Clarke--Groves mechanism, characterize the optimal mechanism that maximizes the...

Most quantitative studies of international real business cycle (IRBC) models require the use of approximate solution methods. We solve an IRBC model with incomplete asset markets using King, Plosser and Rebelo's (1988) linear approximation method. We quantify the additional approximation error...

I show that environmental policy affects the cross sectoral allocation of demand and output if intermediate goods are differentiated according to their pollution intensity. When innovations are environmental friendly, a tax on emissions skews demand towards new goods, which are the most...

In this paper we develop a theory of scale-invariant endogenous growth. By this we mean a theory capable of generating a balanced growth path where both the growth rate and the level of GDP per capita are independent of the size of population, where population growth is neither necessary nor...

Recent theoretical research on rotating savings and credit associations (Roscas) suggests that identical individuals prefer a random to a bidding Rosca when participants save for a lumpy durable or an investment good. Here,in contrast, under the assumption that participants are risk averse and...