the role of monitoring of corruption in a simple endogenous growth model i introduction during the last 30 years economists from various fields have contributed to the analysis of corruption the first paper to receive widespread attention was published in 1975 rose ackerman 1975 since then a large literature has developed and much attention has been paid to the relationship between corruption and economic growth in the analysis of the consequences of corruption the literature supports two opposing positions on one hand common wisdom views corruption as an obstacle sand to development and growth on the other hand other researchers since the pioneering works of left 1964 and huntington 1968 have suggested that corruption may promote efficiency by allowing firms to bypass government failures of various sorts grease corruption more recent expositions of efficiency enhancing corruption can be found in lui 1985 acemoglu and verdier 1998 2000 and barreto 2000 barreto 2000 presents a simple neoclassical endogenous growth model where the public sector s monopolistic position is explicitly considered results indicate that a corruption equilibrium is characterized by lower growth rates compared to the ideal situation in which public goods are provided competitively barreto 2000 also shows that if the public sector is subject to significant bureaucratic red tape all of the agents within the economy may prefer the corruption equilibrium as corruption can bypass bureaucratic obstacles from a theoretical point of view there are several ways in which corruption may reduce economic growth corruption can act as a tax and thus lower incentives to invest corruption could cause talented people to engage in rent seeking rather than productive activities corruption may distort the composition of government expenditure as corrupt politicians could be expected to invest in large non productive projects from which considerable bribes can be extracted more easily than from productive activities empirical analysis has also provided evidence of the negative effects of corruption on economic growth mauro 1995 shows that corruption reduces economic growth via reduced private investment 1 similar results are obtained by keefer and knack 1995 using other measures of corruption and a different selection of countries 2 recently the grease the wheels hypothesis has been tested and statistically supported see aidt 2009 campos dimova and ahmad 2010 meon and sekkat 2005 among others in this article we develop a theoretical endogenous growth model which incorporates corruption in our model the social loss brought about by corruption stems from the fact that firms must bribe a bureaucrat in order to invest and consequently devote fewer resources to the accumulation of capital therefore in our model corruption has a negative effect on private investment other models share our framework ehrlich and lui 1999 claim that individuals have an incentive to compete over the privilege of becoming bureaucrats the so called investment in political capital since they obtain economic rents through corruption this investment in political capital consumes economic resources which could otherwise be used for production or investment in human capital in del monte and papagni 2001 corruption arises when bureaucrats manage public resources to produce public goods and services corruption reduces the quality of public infrastructure resulting in a negative effect on economic growth the novel feature of this article is the study of the impact of monitoring of corruption on economic growth 3 in our theoretical model we derive a nonlinear relationship between the level of monitoring and economic growth as well as between corruption and economic growth 4 at low monitoring levels the economy experiences widespread corruption and medium growth rates whereas no corruption occurs at intermediate monitoring levels but low growth rates are recorded

the effects of expenditure growth and urbanisation on food consumption in east asia a note on animal products abstract consumption functions for total animal derived food products were estimated for six east asian countries incorporation of urbanisation was found to make a significant contribution to the functions the urbanisation elasticities were always positive indicating that the process of urbanisation had a positive effect on the demand for animal food products the expenditure elasticities were also positive but often less than they would be if estimated from consumption functions that excluded the effects of urbanisation thus projections of consumption that ignore the influence of urbanisation may be biased

monetary cohabitation in europe how can monetary policy in stage iii of european monetary union be coordinated between the ins and the outs this paper compares alternative institutional mechanisms and concludes that a generalized system of inflation targets at the european level has several merits it strengthens domestic credibility of monetary policy it rules out deliberate attempts to gain competitiveness through devaluations it forces monetary policy to respond automatically to various macroeconomic shocks which is stabilizing for the real exchange rate and it distributes these shocks symmetrically across countries on the basis of a simple theoretical model of policy coordination the paper shows that a system of inflation targets approximates an optimal policy of international cooperation preliminary empirical evidence supports these theoretical results this abstract was borrowed from another version of this item

rice in asia is it becoming an inferior good comment from pooled time series cross section data from 1961 to 1985 for three groups of countries classified by changes in per capita rice consumption levels rice consumption per capita was specified as a function of per capita gross domestic product gdp in real terms and the ratio of world price of rice to wheat because income elasticities tend to be lower at higher income levels a log inverse log model was adopted and ridge regression was employed to minimize multicollinearity problems between iny and y the results indicated that income elasticities have significantly declined moreover income elasticities are negative in half of the countries studied leading to the conclusion that rice is becoming an inferior good in asia the fact that income elasticities for rice and other

credibility of policies versus credibility of policymakers standard models of policy credibility defined as the expectation that an announced policy will be carried out emphasize the preferences of the policymaker and the role of tough policies in signaling toughness and raising credibility whether a policy is carried out however will also reflect the state of the economy we present a model in which a policymaker maintains a fixed parity in good times but devalues if the unemployment rate gets too high our main conclusion is that if there is persistence in unemployment observing a tough policy in a given period may lower rather than raise the credibility of a no devaluation pledge in subsequent periods we test this implication on ems interest rates and find support for our hypothesis

endogenous corruption in a neoclassical growth model abstract the following paper presents a simple neoclassical growth model where corruption is an endogenous result of competition between a public agent and a private agent the model provides a simple theoretical framework in which the level of corruption as well as the effects of corruption on income consumption and growth are identifiable bureaucratic red tape is then added to the model the results suggest that a priori corruption is neither efficiency enhancing nor efficiency detracting with respect to growth but always results in some income redistribution

reward structures and the allocation of talent as relative rewards that different professions receive are a key factor in the allocation of talent what determines the reward structure of a society is an important question this paper develops an equilibrium model of the allocation of talent between productive and unproductive activities such as rent seeking the existence of rent seeking creates a negative externality on productive agents and implies that relative rewards are endogenously determined the same externality can also lead to the existence of multiple equilibria each with different reward structures in a dynamic setting allocations of past generations as well as expectations of future allocations influence current rewards and the society may get trapped in a rent seeking steady state equilibrium the paper also discusses how the non pecuniary reward structure can be influenced by equilibrium selection and a historical example that suggests the presence of a causal link from the allocation of talent to non pecuniary rewards

structural changes in the demand for food in asia empirical evidence from taiwan many asian countries are expected to undergo structural transformations in their economies and rapid urbanization over the next 25 years the changes in tastes and lifestyles engendered by urban living are likely to have significant influences on food demand changes in marketing systems and occupational changes closely linked with increasing gnp per capita also may influence the demand for food in this paper estimates presented for taiwan demonstrate that structural changes in food demand as distinguished from changes due to income and price effects have been significant factors driving the rapid changes in dietary patterns seen in east asia over the past three decades because most previous demand studies have ignored the possible influence of structural shifts which are highly correlated with increases in per capita income over time the effects of income on food demand have been overestimated

using electoral cycles in police hiring to estimate the effect of police on crime comment previous empirical studies have uncovered little evidence that police reduce crime possibly due to simultaneity problems this paper uses the timing of mayoral and gubernatorial elections as an instrumental variable to identify a causal effect of police on crime increases in the size of police forces are shown to be disproportionately concentrated in mayoral and gubernatorial election years increases in police are shown to substantially reduce violent crime but have a smaller impact on property crime the null hypothesis that the marginal social benefit of reduced crime equals the costs of hiring additional police cannot be rejected

wage inflation electoral uncertainty and the exchange rate regime theory and uk evidence the authors extend the rational partisan model of inflation to allow for the effects of unemployment persistence on the dynamics of inflation the authors combine this model with the exchange rate regime model of inflation and examine the experience of the united kingdom outside the fixed exchange rate regime of bretton woods persistently high inflation can be attributed to the failure of political parties to precommit to price stability in the light of unemployment persistence election times are associated with higher inflation with the exception of the thatcher period there is no evidence that the labour party is in general more tolerant to inflation than the conservatives copyright 1992 by royal economic society

destabilizing effects of exchange rate escape clauses abstract this paper studies policy rules with escape clauses analyzing as an example fixed exchange rate systems that allow member countries the freedom to realign in periods of stress while well designed escape clause rules can raise society s welfare in principle limited credibility makes it difficult to implement such rules in practice an ems type institution that imposes political costs on policymakers who realign may raise welfare but can also produce equilibria far inferior to an irrevocably fixed exchange rate switches between multiple equilibria may have the character of sudden speculative attacks

organized crime corruption and punishment we analyze an oligopoly model in which differentiated criminal organizations globally compete on criminal activities and engage in local corruption to avoid punishment when bribing costs are low that is badly paid and dishonest law enforcers work in a weak governance environment and the rents from criminal activity are sufficiently high we find that increasing policing and sanctions can generate higher crime rates indeed beyond a threshold further increases in intended expected punishment create incentives for organized crime to extend corruption rings and ensuing impunity results in a fall of actual expected punishment that yields more rather than less crime

china s food economy to the twenty first century supply demand and trade this paper accounts for the structural changes now taking place in china and suggests that china is not likely to become either an enormous importer or exporter of grain ultimately though china s grain balances will depend on decisions made by chinese policymakers rather than natural resource constraints p v this abstract was borrowed from another version of this item

a macroeconomic model on the quality of government and economic performance i introduction the empirical analysis of hall and jones 1999 suggests that the fundamental determinant of a country s economic performance is its social infrastructure the institutions and government policies that provide incentives for individuals those incentives can encourage productive activity or predatory behavior like rent seeking and corruption although suppression of rent seeking appears to be most efficient if it is carried out by the government the power to make and enforce rules makes the government itself particularly prone to expropriation for instance while bureaucrats protect property by suppressing private rent seeking that interferes with productive activity they may also seek rents themselves by soliciting bribes from citizens 1 how do the efficiency of bureaucrats in protecting property rights and the degree of their corruption affect the relative rewards received by producers private rent seekers and bureaucrats and how does the reward structure interact with the allocation of talent between productive and unproductive activity and hence influence a country s economic performance 2 to address the above issues we work with an essentially standard macroeconomic model of production and trade externality based on the work of diamond 1982 in which productive activity is subject to private and public expropriation private rent seekers and bureaucrats do not produce they are completely dependent on producers efforts one important feature is the presence of a negative externality the unproductive activity exerts on the relative rewards that determine the allocation of agent across activity see murphy shleifer and vishny 1993 we first consider as a benchmark a model where the size of bureaucracy is exogenously given and then endogenize it as an individual s choice under an exogenous bureaucracy an agent chooses to be a producer or a private rent seeker producers conduct transactions in the decentralized markets more productive activity yields higher returns to both producers and private rent seekers and this strategic complementarity results in multiple pareto rankable equilibria the equilibrium with a larger population of producers and less rent seeking features higher welfare by choosing a small size of bureaucracy the government can establish the superior equilibrium as the unique outcome that also achieves the constrained optimum social welfare however is decreasing in the size of bureaucracy in this equilibrium the implication is that the smaller the size of bureaucracy the higher the welfare the optimal size of bureaucracy depends on two opposite influences on producers incentives one is the positive effect through better property rights protection the other includes various negative effects as a result of corruption tax burdens and the fact that resources taken up in the public sector could otherwise be devoted to production if the population of bureaucrats is endogenously determined equilibria exist as long as bureaucrats efficiency is high and corruption is low the equilibrium with a larger bureaucracy is associated with higher production and welfare the reason is that with sufficient efficiency in deterring private rent seeking and low corruption a larger bureaucracy makes private production more profitable by reducing resources allocated to private rent seeking and the resulting externality further improves the relative rewards to productive activity in general the equilibrium size of the bureaucracy is not optimal one resulting implication is that for the equilibrium with a smaller bureaucracy society would benefit by increasing the size of bureaucracy despite the fact that bureaucrats are corrupt many believe that the size of government is an important factor for determining economic performance however hall and jones 1999 p 111 argue that the characteristics of an economy such as the size of government should better be thought as outcomes rather than determinants

insider power unemployment dynamics and multiple inflation equilibria this paper incorporates employment dynamics due to insider power into the barro gordon theory of inflation unlike in the static barro gordon case and even though our infinitehorizon model is linear quadratic there can be two markov perfect equilibria so that the same unemployment may correspond to either low or high inflation both equilibrium inflation rates measured per unit of the gap between the insiders and government s employment targets are higher than the corresponding rate in the static case the low inflation equilibrium has intuitive comparative statics properties in that inflation is increasing in insider power and the discount factor but the high inflation equilibrium behaves in the opposite way the highinflation equilibrium can be eliminated by a future precommitment to a fixed inflation regime e g erm but only if this precommitment can be made with certainty contrary to the static model inflation may be lower when the union puts a positive weight on a wage target than when it cares only about employment even when this wage target is consistent with a lower employment level than the employment target

monetary policy cooperation and multiple equilibria abstract we consider international monetary policy regimes in a world of two identical economies characterized by unemployment persistence in the non cooperative regime markov perfect nash equilibrium policies are generally not unique furthermore policies may be asymmetric in this otherwise symmetric model monetary policy cooperation also exhibits multiple equilibria but these are fewer and always symmetric cooperation may be counterproductive or beneficial for either country depending upon the initial non cooperative and resulting cooperative outcome

sustaining policy cooperation between economies of different size abstract i consider an example of a two country model featuring national heterogeneity and demonstrate that heterogeneity plays an important role for the countries gains from international policy cooperation and just as important for the incentives to break the cooperative agreement i find that national heterogeneity unambiguously reduces trigger strategies support for policy cooperation in other words the more countries differ the harder it is to sustain policy cooperation

rice in asia is it becoming an inferior good empirical results using time series and cross sectional data indicate that rice in asia is becoming an inferior good income elasticities declined and in some cases became negative between 1961 and 1985 in most of the fourteen asian countries studied accordingly domestic demand for rice in these countries is not likely to grow as rapidly as it has in the past as a consequence there is a potential for excess supplies of rice to develop in asia putting downward pressure on rice prices while governments in asian countries may need to adjust their rice policies in the future world rice suppliers may need to develop new markets for rice

implications of trade reform for agricultural markets in northeast asia a korean example trade policy reform in the 1990s increased import access for agricultural products into japan south korea and other countries of asia one of the most significant developments concerns rice markets in this region because of political sensitivity japan and south korea were allowed to postpone tariffication on rice under the uruguay round ur gatt agreement 4 in return south korea provided more than the expected tariff reductions for some other commodities while japan agreed to accelerate quantitative access for rice in recent decades northeast asian markets have been comparatively open to wheat feed grains and cotton imports but mostly closed for rice with no

demand for cereal grains in asia the effect of urbanization abstract this paper analyzes the effects of urbanization on demand for cereal grains rice wheat and coarse grains in nine asian countries a complete demand system almost ideal demand system in linear form is estimated in two stages based on aggregate time series data from 1960 to 1988 in the high income countries i e japan and south korea urbanization was observed to significantly reduce demand for cereal grains in the lower income countries demand for cereal grains either increased or remained the same with urbanization among cereal grains urbanization has had negative effects on demand for rice and coarse grains but consistently positive effects on demand for wheat only japan and thailand among the countries studied have negative income elasticities of demand for total cereal grains and for rice in particular hence rice remains a necessity and a normal good in most asian countries previous estimates of income elasticities of rice based on time series aggregate data tend to be lower than those based on cross section household level data when urbanization is explicitly specified in the demand model the estimates of income elasticities from time series data turn out to be consistent with those from cross section data

household energy elasticities and policy implications for pakistan abstract this study estimates fuel expenditure and price elasticities of household fuels in pakistan the burning of biomass is harmful to health and the environment and may cause preventable morbidity and mortality it is important to investigate how households fuel choices are linked to prices so that governments can consider appropriate steps to enhance the consumption of clean fuels using three pooled cross sectional surveys from pakistan and applying the linear approximate almost ideal demand system la aids model we found that all fuel types except natural gas were price inelastic at the national level and for urban households in rural areas natural gas and lpg were found to be more price elastic compared to urban areas simple policy simulations based on our results suggest that in order to reduce indoor air pollution by encouraging the adoption of clean fuels lpg and piped natural gas governments should subsidies clean fuels rather than imposing taxes on solid fuels moreover in the case of pakistan a subsidy for lpg should be preferred over a subsidy for piped natural gas as it produces a more cost effective reduction in solid fuel use

demand for meat and dairy products by turkish households a bayesian censored system approach we extend the tobit censored linear equation system procedure to utility theoretic demand functions along with a mapping mechanism to impose the adding up restriction implied by consumer utility maximization theory a theoretical restriction very often ignored in previous empirical studies with censored demand systems in this context the bayesian markov chain monte carlo mcmc procedure is applied to the censored linear approximate almost ideal demand system laids for 12 food products using data from the turkish household expenditure survey all own price elasticities are negative and expenditure elasticities positive uncompensated own price elasticities for rural households are generally much higher than those for their urban peers though demand for most food products are own price elastic for both types of households the differential patterns in demand elasticities between urban and rural households become even more evident almost twice as relatively more expensive foodstuffs are consumed showing that accessibilities to alternative products have made rural turkish households more cognizant toward price changes in foods household characteristics play a key role in food expenditures notably so in urban areas and regional and seasonal differences are also present

bargaining a monetary union abstract two governments bargain over the benefits of a monetary union in a cash in advance world a novel feature of the model is that because households trade every period market behavior affects and is affected by the government negotiations as a result in addition to objective costs of delay market expectations about the bargaining outcome emerge as crucial determinants of a monetary union there is a continuum of bargaining outcomes indexed by market expectations some outcomes imply that the monetary union is delayed for an arbitrary number of periods journal of economic literature classification numbers f4 c7

crime inequality and unemployment there is much discussion of the relationships between crime inequality and unemployment we construct a model where all three are endogenous we find that introducing crime into otherwise standard models of labor markets has several interesting implications for example it can lead to wage inequality among homogeneous workers also it can generate multiple equilibria in natural but previously unexplored ways hence two identical neighborhoods can end up with different levels of crime inequality and unemployment we discuss the effects of anti crime policies like changing jail sentences as well as more traditional labor market policies like changing unemployment insurance this abstract was borrowed from another version of this item

the mexican peso crisis sudden death or death foretold abstract we argue that allowing for the possibility of a self fulfilling panic helps to understand several features of the recent mexican crisis self fulfilling expectations became decisive in generating a panic only after the government ran down gross reserves and ran up short term dollar debt we present a simple model to explain how and why multiple equilibria can occur for some levels of reserves or debt but not for others lastly we argue that the imperfect credibility of mexican exchange rate policy made it advisable to follow more contractionary fiscal and monetary policies in 1994 our model formalizes the reasons why this is so

food demand studies in sub saharan africa a survey of empirical evidence abstract the recent empirical food demand studies on sub saharan africa show significant advances in demand specification and methodology especially in the application of less restrictive and theoretically consistent flexible functional forms the findings to date establish some broad patterns on effect of income household demography and life cycle location and prices on food demand patterns however the numerical values of the demand estimates are less generalizable because of an insufficient number of data points to separate the true demand component from other confounding factors which are linked to differences in modeling and estimation of demand relations the priority for future research is to generate sufficiently detailed demand estimates that have a high utility for disaggregated policy analysis but are based on a theoretically consistent and comparable methodology

impact of eliminating government interventions on china s rice sector abstract china s economy has undergone fundamental changes since 1978 agriculture industry and services are being transformed into market economies marketing and domestic trade have also been reformed to take into account regional comparative advantages the government however still controls input supply and output procurement to some extent china is currently negotiating with the gatt in regard to gaining membership conditions for china s reentering the gatt are to eliminate the government interventions on domestic production and consumption and international trade this may affect china s comparative advantages in international markets and therefore may result in changes in the structure of imports and exports will china continue to export rice or will it start to import rice under free trade and if china continues to export how much will china export this paper attempts to model the potential effects of eliminating all government interventions on china s rice sector we construct a rice industry model to facilitate our analysis the model has three components i e supply demand and price linkages the estimated results are consistent with theory and are evaluated using several techniques results from model validation indicate that both static and dynamic models are reasonable and can be used to simulate effects of various government policies simulations are conducted to project china s rice economy to the year 2000 two scenarios are compared 1 continued current policy and 2 elimination of all government interventions eliminating all government interventions would increase production stocks and exports domestic consumption would decline due to the higher domestic prices from eliminating government subsidies on rice consumption china would export more than 1 6 million metric tonnes of milled rice if there were no government interventions in the year 2000

food demand in rural china evidence from rural household survey abstract the recent rural reforms in china have had great effects on agricultural production and productivity as well as rural household consumption while much has been written on production and productivity effects of these reforms very few chinese studies have attempted to analyze the changes in rural consumption patterns this paper uses a dynamic aids model to estimate various food demand parameters for chinese rural households using rural household survey data recently released by the china state statistical bureau the results show that all important food commodities including rice wheat coarse grains vegetables meat tobacco and alcohol have positive expenditure elasticities rice wheat and coarse grains are necessities while meat vegetables alcohol and tobacco are luxuries the expenditure elasticities for rice coarse grains and tobacco are declining but those for wheat meat vegetables and alcohol are increasing as per capita income rises and population increases the demand for these items will continue to increase therefore china must continue to increase its food production by a greater rate in the future in order to avoid food shortages

a model of bureaucracy and corruption we analyze bureaucracy and corruption in a market with decentralized exchange and lemons exchange is modeled as a sequence of bilateral random matches agents have private information about the quality of goods they produce and can supplement trade with socially inefficient bribes bureaucracy is modeled as a group of agents who enjoy centralized production and consumption transaction patterns between the bureaucracy and the private sector are fully endogenous centralized production and consumption in the bureaucracy give rise to low power incentives for the individual bureaucrats as a result private agents might bribe bureaucrats whereas they do not bribe each other an equilibrium with corruption and an equilibrium without corruption can coexist we discuss some welfare implications of the model

monetary policy games inflationary bias and openness abstract when a country s central bank has higher output objectives than those of wage setters the noncooperative nash equilibrium contains an inflationary bias which is higher the flatter the economy s aggregate supply curve an economy s openness from the input side is an exogenous observable characteristic that provides a direct way of testing the theory when the imported intermediate goods displace capital labor in production a higher degree of openness flattens steepens the economy s aggregate supply curve and increases decreases the inflationary bias

participation in a currency union in any voluntary cooperative agreement the potential gain from deviation should determine the minimum influence required over common decision making this paper begins by observing that a highly asymmetric distribution of power between two partners is not sustainable if the choice variables are strategic substitutes it then studies a simple general equilibrium model of a monetary union and shows that a small economy will not take part in the agreement unless it can secure influence that is more than proportional to its size and a transfer of seigniorage revenues in its favor copyright 1992 by american economic association

property rights corruption and the allocation of talent a general equilibrium approach we consider an economy where contracts are necessary to encourage investments contract enforcement requires that a fraction of the agents work in the public sector and do not accept bribes we find that 1 it may be optimal to allow some corruption and not enforce property rights fully 2 less developed economies may choose lower levels of property right enforcement and more corruption 3 there may exist a free lunch such that over a certain range it is possible simultaneously to reduce corruption increase investment and achieve a better allocation of talent bureaucratic corruption is widespread in many societies casual empiricism and case studies suggest that corruption distorts the allocation of resources and discourages investment and the creation of new firms e g mydral 1968 desoto 1989 cross country studies also find that countries with high corruption or long bureaucratic delays suffer lower growth e g mauro 1996 sartre 1997 it is therefore tempting to conclude that government policies and bureaucratic corruption are at least partly responsible for the lack of development or slow growth of many economies e g shleifer and vishny 1993 nevertheless governments and bureaucracies do not exist only to seek rents they perform a number of useful functions including provision of public goods correction of market failures and redistribution without understanding why the state exists it is difficult to assess why corruption arises what its consequences are and whether and how it should be prevented in this paper we analyse how the employees of the state bureaucrats can misuse their power to enforce property rights the protection of property rights is commonly viewed as one of the most important roles of the state by political philosophers as diverse as david hume karl marx and robert nozick while a number of social scientists including north and thomas 1973 and rosenberg and bridzell 1989 emphasise the importance of secure property rights in the development of western societies for the state to have a role in enforcing property rights some contractual problems must exist between private parties in our economy these contractual problems are between entrepreneurs in particular production requires two agents and one of the entrepreneurs needs to undertake an investment but the returns accrue to the other one this can be thought as a partnership with the first agent as an upstream supplier providing an input of variable

elasticities in aids models in the literature a variety of approaches have been used to calculate demand elasticities in almost ideal demand system aids models of demand it is common to estimate the linear approximate almost ideal demand system la aids instead of the aids when the la aids is estimated all of the previously reported approaches to compute elasticities are theoretically incorrect this paper presents correct formulas for la aids elasticities and illustrates the potential errors from using incorrect computing the almost ideal demand system aids of deaton and muellbauer 1980a b has become popular in recent years anderson and blundell blanciforti and green 1983a b blanciforti green and king chalfant eales and unnevehr fujii khaled and mak fulponi heien and willett murray parsons ray a variety of approaches to computing elasticities has been used and some of the approaches may lead to significant errors this paper clarifies the differences between alternative approaches to estimating demand elasticities in aids models

government transaction policy media of exchange and prices abstract we study government transaction policies in search theoretic models of money we model government as a subset of agents who are subject to the same random matching technology and other constraints as private agents but who behave in an exogenous way regarding which objects they accept in trade and at what price the objective is to see how these policies affect private agents strategies and hence the set of equilibria we analyze how the effects depend on factors like the size of government the intrinsic properties of money and the availability and efficacy of substitutes like barter or foreign currency journal of economic literature classification numbers c78 e31 e42

international fiscal policy coordination and economic growth this paper examines the effects of policy coordination in a two country model of endogenous growth governments choose taxes to provide public inputs and public consumption goods tax rates affect the rewards to investment and rates of economic growth two regimes are examined one with independent policy making and one with policy coordination whatever the regime the choice of public inputs is always efficient without coordination however governments choose inefficient tax rates but taxes may be either higher or lower than under policy coordination as a consequence growth rates may be lower or higher than those under policy coordination copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

flexible consumer demand systems and linear estimation food in india demand equations in real income and nominal prices can be obtained directly by differentiating a cost function in which output is replaced by real income this derivation is possible because recent advances show that certain index numbers provide close approximation to real income without knowledge of the utility function parameters three flexible functional forms corresponding to well known flexible cost functions were used to estimate food demand elasticities time series and cross sectional data from ten indian states for twenty years were used the estimates provide a complete set of expenditure price and cross price elasticities for four commodities some close substitutes