some aspects of the taxation of capital gains abstract the analysis of the effects of capital gains taxation requires a careful modelling both of the details of the tax code and the imperfections in the capital market under the standard assumptions concerning perfect capital markets and under the standard idealizations of the tax code there are several strategies by which rational investors can avoid note only all taxes on their capital income but also all taxes on their wage income these strategies leave individuals consumption and bequests in each state of nature and at each date unchanged from what they would have been in the absence of taxes although certain detailed provisions of the tax code may limit the extent to which rational investors can avail themselves of these tax avoidance activities there are ways in a perfect capital market by which the effects of these restrictions can be ameliorated accordingly any analysis of the effects of capital taxation must focus on imperfect capital markets if individuals face limitations on the amounts which they can borrow and or if there are limitations on short sales then under some circumstances there is a locked in effect individuals do not sell securities which they would have sold in the absence of taxation but under other circumstances individuals are induced to sell securities that they otherwise would have held in order to take advantage of the asymmetric treatment of short term losses and long term gains a policy of realizing gains as soon as they become eligible for long term treatment dominates the policy of postponing the realization of capital gains provided the gains are not too large a simple general equilibrium model is constructed within which it is shown that the taxation of capital gains may increase the volatility of asset prices and lead individuals not to trade when they otherwise would while the analysis casts doubt on the significance of the welfare losses resulting from these exchange inefficiencies there are circumstances in which the tax leads to production inefficiencies e g terminating projects at other than the socially optimal date finally we argue that the focus of some recent policy debates on the short run revenue impact of a decrease in the tax rate on capital gains is misplaced even when the short run revenue impact is positive consumption may increase thus exacerbating inflationary pressures and private savings may decrease thus leading to a lower level of investment in the private sector moreover there is some presumption that the long run revenue impact is negative our analysis has some important implications for empirical research in particular it suggests that the impact of the tax is not adequately summarized by a single number such as the effective tax rate representing the average ratio of tax payments to capital gains moreover the impact of the tax cannot be assessed by looking only at reported capital gains and losses

efficient diversification according to stochastic dominance criteria this paper develops the first operational tests of portfolio efficiency based on the general stochastic dominance sd criteria that account for an infinite set of diversification strategies the main insight is to preserve the cross sectional dependence of asset returns when forming portfolios by reexpressing the sd criteria int dimensional euclidean space with elements representing rates of return int different states of nature we characterize subsets of this state space that dominate a given evaluated return vector by first and second order sd this allows us to derive simple sd efficiency measures and test statistics computable by standard mathematical programming algorithms the sd tests and efficiency measures are illustrated by an empirical application that analyzes industrial diversification of the market portfolio

constrained efficiency in the neoclassical growth model with uninsurable idiosyncratic shocks we investigate the welfare properties of the one sector neoclassical growth model with uninsurable idiosyncratic shocks we focus on the notion of constrained efficiency used in the general equilibrium literature our characterization of constrained efficiency uses the first order condition of a constrained planner s problem this condition highlights the margins of relevance for whether capital is too high or too low the factor composition of income of the consumption poor using three calibrations commonly considered in the literature we illustrate that there can be either over or underaccumulation of capital in steady state and that the constrained optimum may or may not be consistent with a nondegenerate long run distribution of wealth for the calibration that roughly matches the income and wealth distribution the constrained inefficiency of the market outcome is rather striking it has much too low a steady state capital stock

food security and hedonic behaviour a case study of sao tome e principe abstract food security is still one of the main concerns in economic policy making in less developed countries the objective of the present study is to analyse technological innovation and technological change induced by economics forces with special attention to consumer behaviour consumer choice is studied together with the technological change process from the consumption side such that efficiency problems can be handled if a certain number of weak assumptions can be accepted the framework of the lancaster model is used to study the impact on food security on sao tome e principe changing from a centralised economic policy to a market oriented economy the paper addresses the need to understand how consumption innovation with the introduction of locally produced food consumption can be an efficient solution from the consumption point of view the results obtained with the introduction of matabala into the consumption choice set show that free market functioning supports local products consumption as an efficient solution in sao tome e principe

the impossibility of efficient decision rules for firms in competitive stock market economies considerable attention has been focused recently on models of firms under uncertainty in which there is an incomplete set of securities markets in these models each firm can issue only one security and consumers can generate consumption plans only through the purchase of firms securities consequently if the economy is competitive each stockholder of a firm will impute the same value to the firm in equilibrium where this value is given by the market price of the firm s security however stockholders will not in general have the same implicit prices for state contingent consumption since the financial market is said to be incomplete if the number of independent securities is less than the number of states of nature consumers cannot hedge perfectly whichimplies that unconstrained pareto optimal allocations are not generally attainable see 2 and 3 finally it is unclear what firms objectives should be in these models because profit maximization is not well defined firms profits in different states cannot be aggregated into a single index it is still generally accepted however that firms should operate in their own stockholders interests a necessary condition for allocative efficiency

the optimal cycle time for epq inventory model under permissible delay in payments abstract goyal journal of the operational research society 36 1985 35 38 discusses the economic order quantity under conditions of permissible delay in payments an implicit assumption of goyal journal of the operational research society 36 1985 35 38 is that the items are obtained from an outside supplier the entire lot size is delivered at the same time if we wish to adopt all results obtained by goyal journal of the operational research society 36 1985 35 38 then we are effectively assuming that the replenishment rate is infinite the main purpose of this paper is to extend goyal journal of the operational research society 36 1985 35 38 to the case that the units are replenished at a finite rate when the replenishment rate approaches to infinite goyal journal of the operational research society 36 1985 35 38 will be a special case of this paper

james mirrlees contributions to the theory of information and incentives the theory of information and incentives has revolutionized economics we now understand how markets and other modes of private economic transaction as well as public policy are affected when different participants have different information or when the actions of some participants are not observable to others mirrlees has made pathbreaking contributions arguably the two most important contributions to the development of these ideas and methods of analysis his review of economic studies article 1971c on optimal nonlinear income taxation introduced a technique that evolved into the revelation principle which fully characterizes all policies that are incentive compatible or feasible under information asymmetry this technique is now the workhorse model for numerous applications his bell joumal of economics article 1976a on hierarchies and organizations and some of his important unpublished yet widely circulated papers referred to below played a similar role for the theory of the design of incentives to induce effort he identified the precise way in which observable outcomes convey probabilistic information about the underlying unobservable action and thereby clarified how rewards or punishments based on outcomes can serve as incentives to action mirrlees developed these ideas in the context of specific applications however they are truly fundamental to economic theory and they have profoundly influenced subsequent thinking and research on the design of

how important is improving food availability for reducing child malnutrition in developing countries abstract do increases in the food supply per person in a country i e national food availability contribute substantially to reductions in malnutrition among its children this paper sets out to answer this controversial question using panel data from 63 developing countries over 1970 1996 this paper gives evidence in support of a statistically significant and strong positive impact of national food availability on child nutrition finding that increased food supplies have resulted in significant reductions in malnutrition since the 1970s despite population increases over the period however per capita food supplies have a declining marginal impact their effect is quite strong for countries with very low food availability e g most countries in sub saharan africa and south asia but weak or non existent for those with high levels e g most countries in the near east and north africa further non food factors such as women s education and status and the quality of health environments are also important determinants of children s nutritional status depending on the state of food availability in any particular geographic area and relative costs these factors may merit greater priority in policies to reduce malnutrition

pareto optimality and competition there is a general consensus that u s financial markets are very competitive and efficient with prices quickly reflecting the available information there is also a widespread belief that these competitive and efficient markets enable the efficient allocation of scarce capital among alternative investment opportunities this belief is not based on direct observation it is virtually impossible to obtain the data concerning the joint probability distribution of returns to all possible projects which would be required for a direct assessment of the efficiency of the resource allocations to which the market gives rise rather it is based on the well known result that perfectly competitive markets generate pareto efficient resource allocations the object of this paper is to question that conclusion to show that even with apparently competitive and efficient markets resource allocations may not be pareto efficient

the domestic determinants of us food aid policy abstract this study presents empirical analysis of us food aid flows as evidence of the strong and stable relationship between commodity producer interests and policy makers during a 35 yr period whereas most foreign aid research centers on the distribution of aid among recipient countries this study focuses on the determinants of the supply of food aid made available by the donor country i conduct time series regression analysis of total us food aid shipments as well as separate analyses of two key commodities wheat and rice several key findings emerge 1 there is a consistent relationship between commodity producer interests and us food aid policy 2 there is a strong relationship between commodity stocks and food aid shipments especially during the years when stocks were the greatest 3 us food aid policy making is highly incremental these findings taken together with the lack of a strong relationship between grain production in poor countries and us food aid shipments belie official rhetoric emphasizing the growing humanitarian objectives of the program over time in the case of rice i find a strong relationship between aid flows and us involvement in the vietnam war

self insurance vs self financing a welfare analysis of the persistence of shocks abstract we study the welfare cost of market incompleteness in a generalized bewley model where idiosyncratic risk takes the form of entrepreneurial productivity shocks market incompleteness in our framework has two dimensions first in the bewley tradition only a limited set of instruments for consumption smoothing is available second entrepreneurs capital rental is subject to collateral constraints as is well known it is harder to self insure against more persistent shocks and the welfare cost of missing consumption insurance increases with shock persistence on the other hand with collateral constraints an increase in shock persistence leads to better allocation of production factors through entrepreneurs self financing and the welfare cost of imperfect capital rental markets decreases with shock persistence the overall welfare cost of market incompleteness can be increasing decreasing or even non monotone in shock persistence depending on the relative strengths of its two components the cost of missing insurance and the cost of imperfect capital markets

an incentive compatible solution for trade credit term incorporating default risk abstract this paper studies the optimal trade credit term decision in an extended economic ordering quantity eoq framework that incorporates a default risk component a principal agent bilevel programming model with costs minimization objectives is set up to derive the incentive compatible credit term the supplier determines the credit term as the leader in the first level programming by balancing her his financing capacity with the retailer s default risk order behavior and cost shifting at the second level the retailer makes decisions on ordering and payment time by reacting on the term offered by the supplier a first order condition solution procedure is derived for the bilevel programming when credit term is confined within the practically feasible interval two key results are obtained the condition to derive incentive compatible credit term and an equation system to derive threshold default risk criterion filtering retailers suitable for credit granting numerical experiments show that the capital cost of the supplier is the most important factor determining the credit term default risk acts like a filtering criterion for selecting retailers suitable for credit granting empirical evidence supporting our theoretical considerations is obtained by estimating three panel econometric models using a dataset from china s listed companies

a macroeconomic model with a financial sector this paper studies a macroeconomic model in which financial experts borrow from less productive agents we pursue four sets of results i the economy is prone to instability and occasionally enters volatile episodes as volatility spikes agents precautionary motive increases depressing prices even further log linear approximations fail to capture these non linear effects that can cause economies to be significantly depressed for long periods of time ii endogenous risk during volatile episodes increases asset price correlations iii financial experts impose a negative externality on each other and on the labor sector by not maintaining adequate capital cushion and funding structure iv while risk sharing within the financial sector through securitization and derivatives contracts reduces many inefficiencies it can also amlify systemic risks

a reconsideration of minsky s financial instability hypothesis the worst and longest depressions have tended to occur after periods of prolonged and reasonably stable prosperity this results in part from agents rationally updating their expectations during good times and hence becoming more optimistic about future economic prospects investors then increase their leverage and shift their portfolios towards projects that would previously have been considered too risky so when a downturn does eventually occur the financial crisis and the extent of default become more severe whereas a general appreciation of this syndrome dates back to minsky 1992 jerome levy economics institute wp 74 and even beyond to irving fisher 1933 econometrica 1 337 357 we model it formally in addition endogenous default introduces a pecuniary externality since investors do not factor in the impact of their decision to take risk and default on the borrowing cost we explore the relative advantages of alternative regulations in reducing financial fragility and suggest a novel criterion for improvement of aggregate welfare

optimal retailer s replenishment decisions in the epq model under two levels of trade credit policy abstract the main purpose of this paper is to investigate the optimal retailer s replenishment decisions under two levels of trade credit policy within the economic production quantity epq framework we assume that the supplier would offer the retailer a delay period and the retailer also adopts the trade credit policy to stimulate his her customer demand to develop the retailer s replenishment model under the replenishment rate is finite furthermore we assume that the retailer s trade credit period offered by supplier m is not shorter than the customer s trade credit period offered by retailer n m n since the retailer cannot earn any interest in this situation m n based upon the above arguments this paper incorporates both chung and huang k j chung y f huang the optimal cycle time for epq inventory model under permissible delay in payments international journal of production economics 84 2003 307 318 and huang y f huang optimal retailer s ordering policies in the eoq model under trade credit financing journal of the operational research society 54 2003 1011 1015 under above conditions in addition we model the retailer s inventory system as a cost minimization problem to determine the retailer s optimal replenishment decisions then three theorems are developed to efficiently determine the optimal replenishment decisions for the retailer we deduce some previously published results of other authors as special cases finally numerical examples are given to illustrate the theorems obtained in this paper then as well as we obtain a lot of managerial insights from numerical examples

financialisation and the new swedish model most studies of swedish political economy are too optimistic about the condition and prospects of the reformed swedish model e g bergh 2014 steinmo 2010 indeed the swedish economy has responded to the global financial crisis gfc in what appears to be a successful manner this comparativist literature nevertheless omits in depth analysis of the impact of financialisation partly due to its neglect of long term dialectical processes of change cf ogden et al 2014 there is a small literature on financialisation in sweden e g belfrage 2008 forslund 2008 kallifatides et al 2010 ryner 2013 belfrage 2015 andersson and jonung 2015 kallifatides 2016 however it has not clarified what the dynamics contradictions and crisis tendencies of the resulting finance dominated accumulation regime in sweden are drawing on document analysis and statistics and based on regulation theory e g aglietta 1979 this paper does just that it thus corrects an overly idealised picture of swedish economy and society as well as more broadly holding the swedish case up as a critical case study for the sustainability of the finance dominated growth regime in europe we argue that there is a looming crisis in the swedish economy today as the acceleration of financialisation following the gfc is shifting the economy away from being export led to becoming debt led and asset based and thus moving the economy closer to the uk and us economies as such the swedish case suggests that the finance dominated growth regime may be unsustainable in europe more generally

on optimal unemployment abstract some unemployment may be optimal in all states of nature for certain production and utility parameters and firm provided insurance for other specifications uniformly varying hours for all workers is optimal

an inventory model with deteriorating items under inflation when a delay in payment is permissible abstract this study develops an inventory model for initial stock dependent consumption rate when a delay in payment is permissible in the inventory model shortages are not allowed the effect of the inflation rate deterioration rate initial stock dependent consumption rate and delay in payment are discussed in the study mathematical models are also derived under two different circumstances i e case i the credit period is less than or equal to the cycle time for settling the account and case ii the credit period is greater than the cycle time for settling the account besides expressions for an inventory system s total cost are derived for these two cases moreover a computational procedure and gino lasdon et al acm transactions mathematical software 4 1978 34 50 are proposed to obtain the optimal order size and cycle time the results can help managers determine the optimal total cost finally a numerical example demonstrates the applicability of the proposed model

shifting foundations of agricultural policy analysis welfare economics when risk markets are incomplete the neat alignment of resources output and prices specified by the perfect competition model is far from duplicated in free markets and the equally neat alignment assumed under the constraints of a program is not experienced when programs are in effect in particular areas under empirically determined supply curves are unlikely to represent opportunity costs the basic theory is invaluable in providing a conceptual orientation for the analysis of programs but the assumptions implicit in the literal use of simple forms of it for policy conclusions are breathtakingly heroic

comments on the eoq model under retailer partial trade credit policy in the supply chain abstract huang and hsu 2007 an eoq model under retailer partial trade credit policy in supply chain international journal of production economics doi 10 1016 j ijpe 2007 05 014 investigate the inventory system as a cost minimization problem to determine the retailer s optimal inventory policy under the supply chain they develop two easy to use theorems to locate the optimal inventory policy for the retailer although their inventory models are correct and interesting processes of arguments to derive those theorems to find the optimal inventory policy are not complete so the main purpose of this paper is to overcome these shortcomings and present complete proofs for huang and hsu 2007

food policy integrating supply distribution and consumption in many developing countries the persistent problem of hunger calls for policies that encompass not only the production of food but also its distribution and its use by consumers this book brings together the best of current thinking on food policy by specialists in agriculture nutrition management public health education development and other related fields the editors place the individual contributions within the broad framework of food policy topics discussed include world food policy the outcome and effects of programs to increase production trade and food aid domestic marketing price and subsidy policies nutrition growth and disease and food and nutrition policy in the context of existing institutions and competing national priorities experience with food policy in china and in sub saharan africa is reviewed throughout the contribution of women to the household food budget and the impact on women of technological change and agricultural programs receive particular attention this interdisciplinary collection will be of interest both to specialists in the areas covered and to persons interested in development issues and food security

a fuzzy genetic algorithm with varying population size to solve an inventory model with credit linked promotional demand in an imprecise planning horizon abstract a genetic algorithm ga with varying population size is developed where crossover probability is a function of parents age type young middle aged old etc and is obtained using a fuzzy rule base and possibility theory it is an improved ga where a subset of better children is included with the parent population for next generation and size of this subset is a percentage of the size of its parent set this ga is used to make managerial decision for an inventory model of a newly launched product it is assumed that lifetime of the product is finite and imprecise fuzzy in nature here wholesaler producer offers a delay period of payment to its retailers to capture the market due to this facility retailer also offers a fixed credit period to its customers for some cycles to boost the demand during these cycles demand of the item increases with time at a decreasing rate depending upon the duration of customers credit period models are formulated for both the crisp and fuzzy inventory parameters to maximize the present value of total possible profit from the whole planning horizon under inflation and time value of money fuzzy models are transferred to deterministic ones following possibility necessity measure on fuzzy goal and necessity measure on imprecise constraints finally optimal decision is made using above mentioned ga performance of the proposed ga on the model with respect to some other gas are compared

optimal manufacturer s replenishment policies in the epq model under two levels of trade credit policy abstract in 2007 huang proposed the optimal retailer s replenishment decisions in the epq model under two levels of trade credit policy in which the supplier offers the retailer a permissible delay period m and the retailer in turn provides its customer a permissible delay period n with n

the inefficiency of the stock market equilibrium this paper establishes that when there is not a complete set of markets but more than one commodity the stock market equilibrium will not in general be a constrained pareto optimum the economy will lack both the property of exchange and production efficiency necessary conditions which must be satisfied if the economy is to be a constrained pareto optimum for all technologies are derived if all individuals have identical homothetic indifference maps then either there must be unitary price elasticities so there is no effective risk or all individuals must have the same degree of risk aversion so there is no trade on the stock market

an eoq model with deteriorating items under inflation when supplier credits linked to order quantity abstract this study proposes an inventory model under a situation in which the supplier provides the purchaser a permissible delay of payments if the purchaser orders a large quantity shortages are not allowed and the effect of the inflation rate deterioration rate and delay in payment are discussed as well as a result in this paper we establish an eoq model for deteriorating items under inflation when the supplier offers a permissible delay to the purchaser if the order quantity is greater than or equal to a predetermined quantity we then characterize the optimal solution and provide an easy to use algorithm to find the optimal order quantity and replenishment time finally some numerical examples are given to illustrate the theoretical results and made the sensitivity analysis of parameters on the optimal solutions

a complete analysis of full pareto efficiency in financial markets for arbitrary preferences this paper provides a complete analysis of the necessary and sufficient conditions for financial markets to achieve fully pareto efficient allocation of aggregate wealth through trade in economies with arbitrary preferences we show that full pareto efficiency obtains only if the market structure of contingent claims spans the information partition of a minimal aggregate wealth statistic and a halmos savage sufficient statistic for the beliefs of the traders all the known allocation efficiency results in the literature due to arrow hakansson john ross and others are unified by this result a security is a certificate that entitles the holder to a stream of cash flows

continuous review inventory model with delay in payments abstract in this paper we examine the continuous review inventory model under permissible delays in payments that is a retailer has the option of either paying for the goods immediately upon the receipt of the order or delay the payment till the next replenishment order where interest will be charged over the delay period expected demand will be assumed constant over time and the order lead time is considered random the objective is to find the optimal ordering quantity and reorder level that will maximize the vendor s total expected profit per unit time when payments are delayed

symposium on organizations and economics m t r ost production in modern economies occurs within organizations and this production is regulated only to a limited extent by prices the size of some of the largest organizations like general motors or ibm or att if managers didn t they would be replaced and firms that didn t maximize value wouldn t survive accordingly what went on inside the black box was mere detail the behavior of the firm could be described completely without knowledge of those details

stationary equilibria with incomplete markets and overlapping generations recent work on general equilibrium models with incomplete financial markets has demonstrated that when assets pay off in units of account equilibrium prices and allocations are indeterminate the equilibria in such models are also generically constrained suboptimal a central planner can typically reallocate assets in such a way as to pareto dominate the competitive equilibrium in this paper the authors consider an overlapping generations model with incomplete markets in which one asset is fiat money they show that when outside money has value in equilibrium the stationary equilibrium prices and allocations are both locally isolated and constrained optimal copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association