It is shown that, in pure exchange economies, the individual demand functions can be recovered from the equilibrium set regardless of the way we evaluate wealth. Following Balasco (2004), the demand functions do not have to be differentiable, not even continuous nor utility maximizing. Thus, the...

This paper utilizes the baseline Real Business Cycle (RBC) model in order to construct a time recursive approximate optimal decision rule as a linear function of the model's state variables and an exogenous surprise shock that hits the economy. The constructed rule is subsequently used in order...

The authors consider a multivariable system comprising a set of macroeconomic variables as inputs, states and outputs. In this setting the authors assess the control potential of fiscal policy versus a large negative business cycle shock that affects the output of the system. The inputs...

A linear control system in the form of a vector autoregressive (VAR) model with an input is considered. The system comprises a set of macroeconomic variables as inputs, states and outputs. The state variables included are the cyclical components of gross domestic product (GDP) and the rate of...

In a simple model based on political support approach, we show that poor and less egalitarian societies may impose a lower tax rate contrary to the prediction of the median voter approach. This is consistent with the available empirical findings. In the framework developed in this paper, the...

The paper provides an explanation of recent empirical evidence on fragmentation and the expansion of the informal sector in India. We argue that as the prospect of getting a better price in the international market increases, the producers in the formal sector act more like merchants and...

The paper attempts to construct political influence variables and explain discrepancies in fund disbursement through proper econometric specification in the Indian context.

A rising wage-gap, almost universally, in the last two decades has contradicted the age-old conventional wisdom of asymmetric wage movements across nations when trade is liberalized. We offer an explanation that fits well with the emerging trade pattern between the developed and more advanced...

Trade statistics reported through official sources may not provide the right information because a regulated system does not induce truthful revelation. Hence, policy prescriptions or evaluations based on official statistics can be misleading. For example, the impact of a devaluation on exports...