Melitz and Ottaviano (2008) predicts a monotonic relation between productivity and markups. When including revenue taxes, however, this relation is non-monotonic and depends on taxes. Even without taxes, productivity and markups can be non-monotonic depending on how non-homotheticity is modeled

Recent empirical research has demonstrated that countries with higher levels of religiosity are characterized by greater income inequality. We argue that this is due to the lower level of government services demanded in more religious countries. Religion requires that individuals make financial...