We provide a theoretical justification for bi-sourcing, which refers to thesituation where a final goods producer buys an input from an outside supplier and alsoproduces it in-house. Bi-sourcing occurs if the marginal cost of producing the input inhouseis higher than the marginal cost of outside...

We analyze how a permanent shift in political power in a region that is creative a la Richard Florida affects tax policy and economic outcomes. There are three groups of individuals in our region: laborers or workers, creative class members or entrepreneurs, and the elites. The elites initially...

We analyze a stylized creative region populated by three groups of individuals: the elites who hold political and taxing power, the entrepreneurial creative class that produces a knowledge good, and workers. Political competition between the elites and the creative class results in the elites...