In a world where poor countries provide weak protection for intellectual property rights, market integration will systematically shift technical change in favor of rich nations. For this reason, free trade can increase international income differences. At the same time, integration with...

This paper focuses on the effects of a recent episode of trade liberalization in India. India underwent a massive reform in 1991 which involved slashing tariffs and opening up different industrial sectors to foreign direct investment. This episode, which is described in detail in a section of...

How does the size of the transfer system evolve in the short and in the long run? We construct a model where taxation is distortionary because it discourages capital accumulation. We compare the Ramsey allocation with the time-consistent allocation. The latter can be interpreted as the outcome...

Both empirical and theoretical evidence suggests that preference heterogeneity is a necessary feature of any model that is able to account for observed heterogeneity in wealth and lifetime income and consumption profiles. Why do tastes differ across people? We propose a framework in which people...