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Three Essays on Economic Inequality


Type

Thesis

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Authors

Paez Salamanca, Gustavo Nicolas 

Abstract

This PhD dissertation studies how market structures and economic incentives transform heterogeneity at agent levels into unequal economic outcomes.

The first chapter studies the economic incentives that lead a country to specialise its production in specific segments of a supply chain, and how these incentives transform heterogeneity at the productivity level into wage differences between countries. This chapter presents an innovative framework that incorporates production networks to the Ricardian trade model. It describes the price formation mechanism that occurs along supply chains and how it induces countries to focus on the production of specific goods. Moreover, the model highlights the role of the network structure in the determination of prices, and uses it to explain how changes in the productivity of a country have consequences in the production decisions and wages of the other countries that produce goods in the supply chain.

The second chapter studies the effects that the heterogeneity of income flows has over the implementation of collective agreements. Collective agreements are the primary mechanism by which communities cope with market failures. However, the lack of enforcement mechanisms generates coordination challenges. This chapter presents a theoretical framework that studies how inequality among individuals affects the participation incentives of the individuals and explains why agreements that balance the rent-seeking behaviour of wealthy individuals with the redistribution interests of the poor reduce the adverse effects of heterogeneity, and can even use it to create more robust agreements.

The third chapter studies heterogeneity at the level of academic journals. This chapter models the interaction between authors and journals as a platform market and uses this model to explain how general interest journals compete against field-specific journals. The model provides new insights into the way in which general interest journals link the different publication incentives of journals across fields. The theoretical results explain why general interest journals tend to attract higher quality publications and how changes in the publication capacity of a journal, or the volume of research in a field, can affect the quality of ideas published in both field-specific and general interest journals. Finally, this chapter applies the previous theoretical results to understand how the Top 5 journals in economics obtained their central role, and how their influence has changed between 1980 and the present.

Description

Date

2018-08-29

Advisors

Goyal, Sanjeev

Keywords

economic modelling, networks, development, collective agreements, supply chains, International Commerce, Trade, Production Networks, Repeated Games

Qualification

Doctor of Philosophy (PhD)

Awarding Institution

University of Cambridge
Sponsorship
Gates Cambridge Scholarship