This paper develops a general methodology for analyzing shadow wage (and other shadow prices). Our approach is to identify those reduced form relationships describing the economy which are central to the determination of the shadow wage, and use these to obtain simple formulae for the shadow...

We analyze consequences of changing the terms of trade between agriculture and industry on capital accumulation and on welfare of workers in different sectors. The issue was central to Soviet industrialization debate and it remains important in today's developing world. Through a simple general...

Thi spaper presents certain remarkably simple results concerning market's allocation to R&D and its comparison to socially efficient allocations. We posit that a firm can undertake more than one project aimed at the same innovation, and consider a product market characterized by Bertrand...

This chapter presents an analysis of pricing (and taxation) of agricultural and industrial goods in LDCs. We identify and explain the central tradeoffs involved in changing prices, in reforming prices, and in setting optimal prices. Our analysis is based on a general equilibrium model of a dual...

In many developing economies, governments provide limited quantities of subsidized food rations to their urban population. This paper presents a positive analysis of the impact of such subsidy systems on the welfare of heterogeneous individuals within the urban and rural sectors, when the urban...

We present some new ways of looking at economic systems. The aspect of human behavior which we emphasize is that individuals' judgments entail errors (they sometimes reject good projects and accept bad projects). The aspect of an economic system on which we focus is its architecture; that is, how...

The authors report an empirical regularity in the market shares of brands. They propose a theoretical explanation for this observed regularity and identify additional consequences of their explanation. Empirical testing of these consequences supports the proposed explanation. The empirical...

Higher-order discrete dynamic systems arise naturally in many economic models in which the problem at hand requires an explicit treatment of dynamics involving lags of more than one period. In studying such models, one type of analysis that economists are often interested in is the assessment of...

This paper presents a general framework for analyzing shadow wages in LDCs. We focus on (i) the differences between the domestic and international prices, (ii) the equilibrating mechanisms in the economy, (iii) the endogeneity of earnings in industry and agriculture, (iv) the consequences of...

Non-linear systems of difference equations of various orders arise naturally in many economic models in which the dynamics is explicit. In such contexts, economists often have potential interest in the comparative statics of locally stable steady-states, with respect to the system's parameters....