Rajit Biswas | Centre For Development Studies (original) (raw)
Papers by Rajit Biswas
The present article develops a search and matching framework to model political nepotism in the j... more The present article develops a search and matching framework to model political nepotism in the job market. The model argues that labor market friction generates incentives for the political leaders to provide nepotism under a democratic set up. Both the leaders optimally choose nepotism when the labor market friction is higher. It is shown that even for a relatively lesser labor market friction at least one leader would always choose nepotism. The results of the basic model remain robust in an extension where followers can pay a price and choose their allegiance, to any one of the political parties.
Journal of Industry, Competition and Trade, 2016
This paper considers the relative efficiency of unit tax and ad valorem tax in Cournot doupoly in... more This paper considers the relative efficiency of unit tax and ad valorem tax in Cournot doupoly in the presence of licensing opportunities after the announcement of the tax rates by the government. Anderson et al. (2001) shows that in such a case ad valorem tax welfare dominates the unit tax. However, it ignores the licensing possibilities. Interestingly, it is shown in the present paper that in case of fixed-fee licensing unit tax sometimes dominates ad valorem tax. However, unit tax and ad valorem tax are equally efficient in case of royalty licensing.
International Journal of Economic Theory
The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic comp... more The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic competition. It is shown that if the assumption of full employment is relaxed, then taxation can increase employment conditionally when the elasticity of substitution among varieties is low. Moreover, with the same level of initial unemployment, ad valorem tax is better than unit tax in terms of employment, when the targeted tax revenue is relatively high and scale economies are strong.
Review of Economics and Institutions, 2017
The present model analyses how the state would provide services when the change of power depends ... more The present model analyses how the state would provide services when the change of power depends upon the performance of the state. Agents can evaluate state performance based either only on the receipt of government services, or both on the benefit from government services and taxes imposed. With a credible threat of power change, if the valuation of the government services is low, along with a low fiscal capacity, then it is less probable that this service would be provided. Furthermore, such an allocation is compared with a situation, when there exists a threat of active opposition. Interestingly, that threat does not change the optimum provisioning of government services (as compared to the previous situation) in the equilibrium.
Journal of Economics
This paper discusses the licensing of technology between rival firms in a Cournot duopoly with ho... more This paper discusses the licensing of technology between rival firms in a Cournot duopoly with horizontal and vertical product differentiation. The firms produce products of different qualities (high and low) and incur different costs per unit of output produced. It is shown that technology is transferred from the firm that produces the higher quality product to the firm that produces the lower quality product via a fixed-fee if the quality difference (net of cost) and the horizontal differentiation between the two products are relatively low. Technology is transferred through royalty, for any level of quality difference (net of cost), if the horizontal differentiation between the products is relatively low. A similar result is observed for two-part tariff licensing and quota licensing, which is a combination of output quota set by the licensor coupled with a fixed-fee. It is also shown that the optimal form of contract is either two-part tariff licensing or quota licensing. Technology is never licensed from the firm that produces a lower quality product to its rival that produces a higher quality product. However, the cross-licensing of technology is sometimes possible. After licensing welfare always increases.
Journal of Industry, Competition and Trade
Keio Economic Studies, 2013
Capital inflow is considered to be welfare immiserizing, when the capital intensive import compet... more Capital inflow is considered to be welfare immiserizing, when the capital intensive import competing sector is tariffprotected and earnings of foreign capital are fully repatriated back to the foreign country. In such models, as the import competing sector expands it crowds out cheaper imports in the process. The present model incorporates features of monopolistic competition and increasing returns to scale and shows that capital inflow might lead to an unconditional rise in the import volume of the economy. This occurs as the price of the import competing brands becomes higher and thus consumers demand more of the internationally available cheaper importables.
International Journal of Economic Theory, 2021
The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic comp... more The present model revisits the issue of unit and ad valorem
taxes in a model of monopolistic competition.
It is shown that if the assumption of full employment is
relaxed, then taxation can increase employment conditionally
when the elasticity of substitution among
varieties is low. Moreover, with the same level of initial
unemployment, ad valorem tax is better than unit tax in
terms of employment, when the targeted tax revenue is
relatively high and scale economies are strong.
The present model analyses how the state would provide services when the change of power depend... more The present model analyses how the state would provide services when the change of power depends upon the performance of the state. Agents can evaluate state performance based either only on the receipt of government services, or both on the benefit from government services and taxes imposed. With a credible threat of power change, if the valuation of the government services is low, along with a low fiscal capacity, then it is less probable that this service would be provided. Furthermore, such an allocation is compared with a situation, when there exists a threat of active opposition. Interestingly, that threat does not change the optimum provisioning of government services (as compared to the previous situation) in the equilibrium.
Journal of Industry, Competition and Trade , 2017
This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly ... more This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly market in the presence of licensing opportunities after the announcement of the tax rates by the government. In case of fixed-fee licensing, if the unit cost difference of the firms is low and tax revenue of the government is high, then unit tax is more efficient than the ad valorem tax. If tax revenue of the government is low, then ad valorem tax is more efficient than unit tax. Ad valorem tax is more efficient than unit tax in the case of royalty licensing.
This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly ... more This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly market in the presence of licensing opportunities after the announcement of the tax rates by the government. In case of fixed-fee licensing, if the unit cost difference of the firms is low and tax revenue of the government is high, then unit tax is more efficient than the ad valorem tax. If tax revenue of the government is low, then ad valorem tax is more efficient than unit tax. Ad valorem tax is more efficient than unit tax in the case of royalty licensing.
Economics & Politics, Aug 24, 2015
We build a bargaining model, in which a country (leader) decides whether or not to form a free tr... more We build a bargaining model, in which a country (leader) decides whether or not to form a free trade agreement with other nations (followers), either through a sequential or a multilateral bargaining procedure. Unlike Aghion et al. (2007, Journal of International Economics, 73, 1–30), in our specification of multilateral bargaining, the leader can collude with all those follower countries who agree to its offer. This has important implications for the choice of sequential and multilateral bargaining by the leader in presence of coalition externalities. Moreover, this bargaining procedure ensures that “stumbling block” equilibrium will never occur.
Journal of Economics, Feb 24, 2015
The present model introduces labour mobility in an otherwise standard model of innovation and imi... more The present model introduces labour mobility in an otherwise standard model of innovation and imitation. As in Grossman and Helpman (Innovation and growth in the global economy. MIT Press, Cambridge, 1992) a wide-gap and a narrow gap steady state equilibrium is characterized. It is shown that there can be multiplicity of equilibrium in the wide gap case. Interestingly, free labour mobility causes the growth rate to be identical for both the wide gap and the narrow gap case. A strengthening of intellectual property rights reduces the global growth rate of the economy both in the wide gap and narrow gap equilibrium. In case of the unique narrow gap equilibrium, stronger property rights reduces the rate of imitation unambiguously, but the effect of stronger property rights remains ambiguous in case of wide gap equilibrium. Also subsidy by North to innovation, in a Narrow gap equilibrium, has no effect on the rate of imitation or on the global growth rate.
Economics Bulletin, Mar 11, 2015
This paper develops a model of small open economy, with a differentiated goods sector and volunta... more This paper develops a model of small open economy, with a differentiated goods sector and voluntary provisioning of public good. It is shown that trade policy can alter the quantity of public good provided in the equilibrium. Interestingly, tariffs may fail to protect, leading to a Metzler Paradox like situation. This is because the income effect generated due to the imposition of tariff can lead to an increase in the contribution to the public good. An expanding public sector crowds out the import competing sector. This result holds unambiguously in the neighbourhood of free trade.
Keio Economic Studies, Aug 29, 2013
Capital inflow is considered to be welfare immiserizing, when the capital intensive import compet... more Capital inflow is considered to be welfare immiserizing, when the capital intensive import competing sector is tariffprotected and earnings of foreign capital are fully repatriated back to the foreign country. In such models, as the import competing sector expands it crowds out cheaper imports in the process. The present model incorporates features of monopolistic competition and increasing returns to scale and shows that capital inflow might lead to an unconditional rise in the import volume of the economy. This occurs as the price of the import competing brands becomes higher and thus consumers demand more of the internationally available cheaper importables.
The present article develops a search and matching framework to model political nepotism in the j... more The present article develops a search and matching framework to model political nepotism in the job market. The model argues that labor market friction generates incentives for the political leaders to provide nepotism under a democratic set up. Both the leaders optimally choose nepotism when the labor market friction is higher. It is shown that even for a relatively lesser labor market friction at least one leader would always choose nepotism. The results of the basic model remain robust in an extension where followers can pay a price and choose their allegiance, to any one of the political parties.
Journal of Industry, Competition and Trade, 2016
This paper considers the relative efficiency of unit tax and ad valorem tax in Cournot doupoly in... more This paper considers the relative efficiency of unit tax and ad valorem tax in Cournot doupoly in the presence of licensing opportunities after the announcement of the tax rates by the government. Anderson et al. (2001) shows that in such a case ad valorem tax welfare dominates the unit tax. However, it ignores the licensing possibilities. Interestingly, it is shown in the present paper that in case of fixed-fee licensing unit tax sometimes dominates ad valorem tax. However, unit tax and ad valorem tax are equally efficient in case of royalty licensing.
International Journal of Economic Theory
The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic comp... more The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic competition. It is shown that if the assumption of full employment is relaxed, then taxation can increase employment conditionally when the elasticity of substitution among varieties is low. Moreover, with the same level of initial unemployment, ad valorem tax is better than unit tax in terms of employment, when the targeted tax revenue is relatively high and scale economies are strong.
Review of Economics and Institutions, 2017
The present model analyses how the state would provide services when the change of power depends ... more The present model analyses how the state would provide services when the change of power depends upon the performance of the state. Agents can evaluate state performance based either only on the receipt of government services, or both on the benefit from government services and taxes imposed. With a credible threat of power change, if the valuation of the government services is low, along with a low fiscal capacity, then it is less probable that this service would be provided. Furthermore, such an allocation is compared with a situation, when there exists a threat of active opposition. Interestingly, that threat does not change the optimum provisioning of government services (as compared to the previous situation) in the equilibrium.
Journal of Economics
This paper discusses the licensing of technology between rival firms in a Cournot duopoly with ho... more This paper discusses the licensing of technology between rival firms in a Cournot duopoly with horizontal and vertical product differentiation. The firms produce products of different qualities (high and low) and incur different costs per unit of output produced. It is shown that technology is transferred from the firm that produces the higher quality product to the firm that produces the lower quality product via a fixed-fee if the quality difference (net of cost) and the horizontal differentiation between the two products are relatively low. Technology is transferred through royalty, for any level of quality difference (net of cost), if the horizontal differentiation between the products is relatively low. A similar result is observed for two-part tariff licensing and quota licensing, which is a combination of output quota set by the licensor coupled with a fixed-fee. It is also shown that the optimal form of contract is either two-part tariff licensing or quota licensing. Technology is never licensed from the firm that produces a lower quality product to its rival that produces a higher quality product. However, the cross-licensing of technology is sometimes possible. After licensing welfare always increases.
Journal of Industry, Competition and Trade
Keio Economic Studies, 2013
Capital inflow is considered to be welfare immiserizing, when the capital intensive import compet... more Capital inflow is considered to be welfare immiserizing, when the capital intensive import competing sector is tariffprotected and earnings of foreign capital are fully repatriated back to the foreign country. In such models, as the import competing sector expands it crowds out cheaper imports in the process. The present model incorporates features of monopolistic competition and increasing returns to scale and shows that capital inflow might lead to an unconditional rise in the import volume of the economy. This occurs as the price of the import competing brands becomes higher and thus consumers demand more of the internationally available cheaper importables.
International Journal of Economic Theory, 2021
The present model revisits the issue of unit and ad valorem taxes in a model of monopolistic comp... more The present model revisits the issue of unit and ad valorem
taxes in a model of monopolistic competition.
It is shown that if the assumption of full employment is
relaxed, then taxation can increase employment conditionally
when the elasticity of substitution among
varieties is low. Moreover, with the same level of initial
unemployment, ad valorem tax is better than unit tax in
terms of employment, when the targeted tax revenue is
relatively high and scale economies are strong.
The present model analyses how the state would provide services when the change of power depend... more The present model analyses how the state would provide services when the change of power depends upon the performance of the state. Agents can evaluate state performance based either only on the receipt of government services, or both on the benefit from government services and taxes imposed. With a credible threat of power change, if the valuation of the government services is low, along with a low fiscal capacity, then it is less probable that this service would be provided. Furthermore, such an allocation is compared with a situation, when there exists a threat of active opposition. Interestingly, that threat does not change the optimum provisioning of government services (as compared to the previous situation) in the equilibrium.
Journal of Industry, Competition and Trade , 2017
This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly ... more This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly market in the presence of licensing opportunities after the announcement of the tax rates by the government. In case of fixed-fee licensing, if the unit cost difference of the firms is low and tax revenue of the government is high, then unit tax is more efficient than the ad valorem tax. If tax revenue of the government is low, then ad valorem tax is more efficient than unit tax. Ad valorem tax is more efficient than unit tax in the case of royalty licensing.
This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly ... more This paper considers the relative efficiency of unit tax and ad valorem tax in a Cournot duopoly market in the presence of licensing opportunities after the announcement of the tax rates by the government. In case of fixed-fee licensing, if the unit cost difference of the firms is low and tax revenue of the government is high, then unit tax is more efficient than the ad valorem tax. If tax revenue of the government is low, then ad valorem tax is more efficient than unit tax. Ad valorem tax is more efficient than unit tax in the case of royalty licensing.
Economics & Politics, Aug 24, 2015
We build a bargaining model, in which a country (leader) decides whether or not to form a free tr... more We build a bargaining model, in which a country (leader) decides whether or not to form a free trade agreement with other nations (followers), either through a sequential or a multilateral bargaining procedure. Unlike Aghion et al. (2007, Journal of International Economics, 73, 1–30), in our specification of multilateral bargaining, the leader can collude with all those follower countries who agree to its offer. This has important implications for the choice of sequential and multilateral bargaining by the leader in presence of coalition externalities. Moreover, this bargaining procedure ensures that “stumbling block” equilibrium will never occur.
Journal of Economics, Feb 24, 2015
The present model introduces labour mobility in an otherwise standard model of innovation and imi... more The present model introduces labour mobility in an otherwise standard model of innovation and imitation. As in Grossman and Helpman (Innovation and growth in the global economy. MIT Press, Cambridge, 1992) a wide-gap and a narrow gap steady state equilibrium is characterized. It is shown that there can be multiplicity of equilibrium in the wide gap case. Interestingly, free labour mobility causes the growth rate to be identical for both the wide gap and the narrow gap case. A strengthening of intellectual property rights reduces the global growth rate of the economy both in the wide gap and narrow gap equilibrium. In case of the unique narrow gap equilibrium, stronger property rights reduces the rate of imitation unambiguously, but the effect of stronger property rights remains ambiguous in case of wide gap equilibrium. Also subsidy by North to innovation, in a Narrow gap equilibrium, has no effect on the rate of imitation or on the global growth rate.
Economics Bulletin, Mar 11, 2015
This paper develops a model of small open economy, with a differentiated goods sector and volunta... more This paper develops a model of small open economy, with a differentiated goods sector and voluntary provisioning of public good. It is shown that trade policy can alter the quantity of public good provided in the equilibrium. Interestingly, tariffs may fail to protect, leading to a Metzler Paradox like situation. This is because the income effect generated due to the imposition of tariff can lead to an increase in the contribution to the public good. An expanding public sector crowds out the import competing sector. This result holds unambiguously in the neighbourhood of free trade.
Keio Economic Studies, Aug 29, 2013
Capital inflow is considered to be welfare immiserizing, when the capital intensive import compet... more Capital inflow is considered to be welfare immiserizing, when the capital intensive import competing sector is tariffprotected and earnings of foreign capital are fully repatriated back to the foreign country. In such models, as the import competing sector expands it crowds out cheaper imports in the process. The present model incorporates features of monopolistic competition and increasing returns to scale and shows that capital inflow might lead to an unconditional rise in the import volume of the economy. This occurs as the price of the import competing brands becomes higher and thus consumers demand more of the internationally available cheaper importables.