Micro Theory Reading Group

Raghav will present: "Introducing Market Segregation as a Policy Instrument" (with Yatish Arya)

Abstract:   We consider a general equilibrium setup where some goods are equally endowed across the population(eg. time), whereas some are not. We then go on compare the effects of 3 policies, subsidies, direct transfers and a third policy which we introduce(market segregation). We find if inequality between individuals in the economy is large, and “needs” are consumed in-elastically, our policy outperforms the others we compare against. We also partially characterize situations in which transfers perform the best. However, we prove that generically segregation and transfers should be used together are always welfare improving.

This group is via Microsoft Teams