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We address the fundamental question arising in geographical economics: why do economic activities agglomerate in a small number of places? The main reasons for the formation of economic clusters involving firms and/or households are analyzed: (i) externalities under perfect competition; (ii) increasing returns under monopolistic competition; and (iii)(More)
This paper explores how to optimally set tax and transfers when taxation authorities: (1) are uninformed about individuals' value of time in both market and non-market activities and (2) can observe both market-income and time allocated to market employment. We show that optimal redistribution in this environment involves distorting market employment(More)
We argue that for the case of heterogeneous commodities with infrequent tradings, such as paintings, it is relevant to base a price index on hedonic regressions using all sales and not resales only. To support this conclusion we construct a price index for paintings by Impressionists and their followers and compare the various estimators using bootstrapping(More)
The other two authors are responsible for a substantial amount of editing. Abstract We present a new condition on beliefs that guarantee the Bayesian imple-mentability of all efficient social decision rules. We show that this condition is easy to verify and is both more interpretable and more general than the conditions that are found in the literature. We(More)
In a Bayesian framework, when the relevant information is dispersed among several agents, the designer of a decision mechanism must take into account what they know about each other. Many authors have exploited the general properties of such information structures to construct decision procedures or contracts in many different types of allocation problems.(More)
We study an endogenous business cycle model with Cournotian monop-olistic competition and an endogenous number of firms in each sector. Our model is a simple general equilibrium macroeconomic model introducing overlapping generations both of consumers and firms. Firms strategically decide on investment in the first period of their life, and competè a la(More)
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