Uncertainty significantly influences healthcare policy decisions, especially regarding lockdown exits during pandemics. This study examines both epidemiological and economic and social uncertainties affecting stay-at-home and essential workers concerning COVID-19 exposure. Using an epidemiological real options model, we assess how these uncertainties impact the timing of lockdown exit decisions. The results indicate that a higher policy-change value lengthens the lockdown delay. A greater shock correlation between stay-at-home and mask-only populations reduces this value, leading to earlier lockdown exits. By conceptually incorporating economic and social pressures, such as income disruption, public fatigue, and policy irreversibility, the model provides a more realistic understanding of the trade-offs faced by decision-makers. These findings bridge the discrepancies between public health recommendations and policymakers’ actions. Integrating options theory enables more informed decision making by considering uncertain risks and outcomes.
This research assesses the impact of remittances and financial development on the size of shadow economy in Africa. Furthermore, the study examines the moderating effect of financial development on the linkages between remittances and the shadow economy. The data set for the study comprises 29 African countries between 2000 and 2020, while Driscoll and Kraay’s non-parametric standard error, fully modified ordinary least squares, augmented mean group, and method of moment quantile regression are used as estimation techniques. The study documents that remittances and financial development lessen the size of shadow economy in Africa. Additionally, the study found no substitute or complementary role of financial development and remittances in influencing the size of the shadow economy. This suggests that financial development and remittances can have separate effects on the size of the shadow economy. The results of other control variables also indicate that economic growth and foreign direct investment reduce the size of the shadow economy while population and institutional quality increase its size. The results of this study are robust to different estimation techniques.
This paper reconstructs the concept of equilibrium in economics, proposing a view centered on scarcity, competition, and transaction cost. Its core thesis is that the essence of equilibrium is a state where interpersonal conflicts of interest are resolved, achieved under constraints through clearly defined criteria of competition. Scarcity induces competition, and competition must occur under specific constraints to determine winners and allocate resources. A state lacking clear criteria – termed “disequilibrium” – cannot persist in the real world. The paper further deconstructs the subjectively labeled “entrepreneurship” as the specific combination of market and non-market contracts chosen by individuals to minimize rent dissipation under given information cost constraints; its essence is an equilibrium outcome. Further, through a case study of the counterfeit goods market, the paper empirically analyzes how information costs influence the marginal substitution process between price, transaction cost, and non-price criteria of competition. This process ultimately achieves a general equilibrium characterized by minimized rent dissipation.
