We consider the optimal nonlinear income taxation problem in a dynamic, stochastic environment when the government cannot change the tax rule as uncertainty resolves. Due to such a stationarity constraint, our taxation problem is reduced to a static one over an expanded type space. We strengthen...

We consider the optimal nonlinear income taxation problem in a dynamic, stochastic environment when the government is sluggish in the sense that it cannot change the tax rule as uncertainty resolves. We argue that the zero top marginal tax rate result in static models is of little practical...

We consider the optimal nonlinear income taxation problem in a dynamic, stochastic environment when the government is sluggish in the sense that it cannot change the tax rule as uncertainty resolves. We argue that the zero top marginal tax rate result in static models is of little practical...

We investigate the differences and connections between discrete-space and continuous-space social interaction models. Although our class of continuous-space model has a unique equilibrium, we find that discretized models can have multiple equilibria for any degree of discretization, which...

This is a short essay on open questions in urban economic theory.

We criticize the theories used to explain the size distribution of cities. They take an empirical fact and work backward to obtain assumptions on primitives. The induced theoretical assumptions on consumer behavior, particularly about their inability to insure against the city-level productivity...

The tomahawk bifurcation is used by Fujita et al. (1999) in a model with two regions to explain the formation of a core-periphery urban pattern from an initial uniform distribution. Baldwin et al. (2003) show that the tomahawk bifurcation disappears when the two regions have an uneven population...

The long-term trends of urbanization suggest: not only have more cities formed, but the leading metropolises have grown larger, with a number of peripheral subcenters developing over time. Conventional models of urban growth are limited, in that commuting cost and congestion eventually result in...

The modern literature on city formation and development, for example the New Economic Geography literature, has studied the agglomeration of agents in size or mass. We investigate agglomeration in sorting or by type of worker, that implies agglomeration in size when worker populations differ by...