the rotten kid theorem meets the samaritan s dilemma a familiar result in the economic theory of the family is becker s rotten kid theorem this theorem states that altruism by a family member will lead other selfish members to act efficiently from the family viewpoint we extend becker s one period model to two periods and show that parental altruism can result in an inefficiency known in other contexts as the samaritan s dilemma implications of this for transfer arrangements within the family and for the ricardian equivalence theorem are drawn

inflation and uncertainty tests for temporal ordering for the postwar united states increases in the rate of inflation tend to precede increases in the level of inflation uncertainty the finding suggests that higher inflation uncertainty is part of the welfare cost of inflation possible explanations are 1 a high rate of inflation increases uncertainty about future monetary policy and 2 there is uncertainty about the persistence of inflation copyright 1995 by ohio state university press

motivating devoted workers abstract when increased effort by a worker induces an employer to reduce its use of other inputs inefficiency may result in particular suppose that output increases with the worker s effort that a worker exerts extra effort because he values the output produced beyond the wage he earns that output increases with the capital the employer provides and that these levels are not verifiable under plausible conditions output is lower if the employer can commit to a level of capital than if it cannot if the employer cannot commit then output may decline as the worker values the output more when the employer pays the worker for increased output output may be lower when the worker values it than when he does not lastly efficiency may increase when a firm is paid more for a unit of output than its marginal social value and when the employer can commit to using a given level of other inputs

raising children to work hard altruism work norms and social insurance children who can count on support from altruistic parents may not try hard to succeed in the labor market moreover parental altruism makes withdrawal of such support non credible to promote work

leaving home as a self selection device we develop a model of intergeneratioal coresidence and transfers within the family in a setting of asymmetric information following an exchange motive altruistic parents receive services from their children who may make them financial gifts in return however parents do not know the privacyc ost to children of home sharing hence they make additional transfers in order to discipline their children and give them incentives to reveal their true privacy cost we show that only children who stay at the parental home receive an informational rent and that this rent is greaterf or recipients with a low privacy cost

games parents and adolescents play risky behaviors parental reputation and strategic transfers this article examines parental reputation formation in intra familial interactions in a repeated two stage game children decide whether to drop out of high school or daughters decide whether to have births as teens and parents then decide whether to provide support to their children beyond age 18 drawing on milgrom and roberts 1982 and kreps and wilson 1982 we show that under certain conditions parents have the incentive to penalise older children for their adolescent risk taking behaviour in order to dissuade their younger children from such behaviour when reaching adolescence we find evidence in favour of this parental reputation model

social insurance commitment and the origin of law interest bans in early christianity abstract despite the historical importance of ideology based economically inhibitive laws we know little about the economic factors underlying their origin this paper accounts for the historical emergence of one such law the christian ban on taking interest a doctrine that shaped the evolution of numerous financial contracts and related organizational forms a game theoretic analysis and historical evidence suggest that the church s commitment to providing social insurance for its poorest constituents encouraged risky borrowing which the church attempted to limit by banning interest the analysis highlights the applicability of the rational choice framework to seemingly irrational actions and laws the role of nonmonetary sanctions in circumventing commitment problems and the importance of economic forces vis a vis ideology

uncertain altruism and investment in children the authors discuss the concept of parental uncertainty about their childrens altruism and the consequences for investment in childrens human capital in this paper we show that if parents are uncertain about their childrens altruism but are at least sure that they will receive some support from their children then the unique optimal investment is the efficient one uncertainty over the exact level of the retirement gift does not alter the conclusion of the perfect certainty case even when parents are risk averse alternatively parents may not know enough about their childrens altruism to feel completely confident that some gift will be forthcoming regardless of the size of their investment under this assumption we show that the optimal investment must be less than the efficient amount excerpt

informal credit markets in india informal financial markets those which are not regulated or monitored by the banking authorities account for much of business credit in developing countries these unregulated informal credit markets icm are important both in their own right as part of each country s financial system and because of their reciprocal relations with growing enterprises and the regulated financial sector in order to study the operations of some of these markets in detail in urban commercial settings we conducted an extended survey of some of the informal credit markets of india 2 based in some cases on centuries of operation these markets proved to be important in the functioning of the contemporary economy indigenous style bankers belonging to particular ethnic communities and castes formerly provided the full range of banking services to their clients 3 with the rise of modern western style banking the indigenous bankers either have transformed themselves to serve sectors such as wholesale trade not well served by the modern sector or provide services which the modern bankers cannot provide though any estimate is very approximate it seems that informal credit markets account for as much as 20 of commercial credit outstanding in the various markets surveyed we began by surveying the gujeratis some of whom still practice their traditional form of full service banking in their homeland of gujerat and adjoining bombay the shikarpuris or multanis originally full service bankers in sind who now provide commercial credit in various other centers the chettiars in south india the rastogis in uttar pradesh and the marwaris especially in eastern india 4 but our surveys revealed that a wide range of ethnic groups were now involved in informal credit markets and the more meaningful differentiations

projects for women in the third world explaining their misbehavior abstract a large number of income generation projects for poor women in the third world designed during the women s decade 1975 85 have misbehaved that is their economic objectives have evolved into welfare action during implementation project misbehavior and the prevalence of welfare interventions can be explained by three factors first particular project characteristics define the typical intervention for women and facilitate the achievement of social rather than production aims second these characteristics are a result of the expertise in the welfare sector of women based institutions that execute women s projects finally the choice of women based implementing agencies and the more generalized preference for welfare action are determined by the comparatively lower financial and social costs derived from the implementation of welfare vs economic based policies for women in developing countries

a theory of ambiguity credibility and inflation under discretion and asymmetric information this paper develops a positive theory of credibility ambiguity and inflation under discretion and asymmetric information the monetary policymaker maximizes his own politically motivated objective function that is positively related to economic stimulation through monetary surprises and negatively related to monetary growth the relative importance he assigns to each target shifts stochastically through time his current preference trade off is known to him but not to the public when choosing the state contingent path of money growth for the present and the future the policymaker compares the benefits from current stimulation with the costs associated with higher future inflation expectations current monetary growth conveys information to the public about future money growth because there is persistence in the policymaker s objectives although expectations are rational information is imperfect because monetary control procedures are imprecise as a result the public cannot correctly distinguish persistent changes of emphasis on different policy objectives from transitory monetary control errors the public becomes aware of changes gradually by observing past monetary growth credibility is defined in terms of the speed with which the public recognizes changes in the objectives of the policymaker credibility is lower the noisier monetary control and the more stable the objectives of the policymaker looser monetary control and a higher degree of time preference on the part of the policymaker induce him to produce higher and more variable monetary growth when the policymaker is free to determine the accuracy of monetary control he does not always choose the most effective control available in spite of the fact that monetary surprises always have an expected value of zero the reason is that ambiguous control procedures enable the policymaker to generate positive surprises when he cares more than on average about economic stimulation he leaves the inevitable negative surprises for periods in which he cares more about inflation prevention this result provides an explanation for the fed s preference for ambiguity recently documented by goodfriend 1986 the policymaker is more likely to pick more ambiguous control procedures the more uncertain his objectives and the higher his time preference the paper also provides a theoretical underpinning for the well documented crosscountry positive correlation between the level and the variability of inflation

the euro and inflation uncertainty in the european monetary union in this paper we investigate empirically the relationship between inflation and inflation uncertainty in twelve emu countries we estimate a time varying parameter model with a garch specification for the conditional volatility of inflation in order to distinguish between short run structural and impulse and steady state uncertainty we then introduce a dummy variable to model the policy regime shift which occurred in 1999 with the introduction of the euro and its effects on the links between inflation and inflation uncertainty we find that steady state inflation has generally remained stable with the important exception of germany where the trend has become positive steady state inflation uncertainty and inflation persistence have both increased and the relationship between inflation and inflation uncertainty has broken down in many countries these findings cast doubt on the optimistic view taken by the ecb concerning its success in controlling inflation and suggest the need for improvements in its analytical framework

unilateral altruism may be beneficial a game theoretic illustration abstract this paper examines when unilateral altruism may be beneficial the example of two person 2 2 noncooperative games is used to develop an intuitive criterion namely that a role reversal would result in the two persons behavior changing in a similar direction

altruism matching and nonmarket insurance incomplete market insurance gives rise to nonmarket arrangements for coinsurance we find that the effort altruistically linked individuals take to avoid an accident increases with the degree of altruism if the degree of altruism is sufficiently high an economy with nonmarket insurance yields higher social welfare than an economy without nonmarket insurance as altruism increases the equilibrium level of effort approaches the second best solution without the need for costly monitoring coinsurance is above below the socially optimal level if individuals place greater weight less weight on their own utility than on that of their partners

borrowing constraints and two sided altruism with an application to social security abstract we develop the implications of borrowing constraints and two sided altruism in an overlapping generations framework with agents who live three periods our analysis identifies six equilibrium patterns of intertemporal and intergenerational linkages in the no loan economy one of which corresponds to the traditional life cycle model and one of which corresponds to barro s dynastic model novel linkage patterns involve parent to child transfers early in the life cycle child to parent gifts late in the life cycle or both capital accumulation behavior and the consequences of fiscal policy interventions depend often critically on which linkage pattern prevails we show for example how unfunded social security interventions can significantly depress aggregate capital accumulation even when every generation is linked to its successor generation by altruistic transfers we also derive a non ricardian neutrality result for gift motive economies that holds whether or not borrowing constraints bind and whether or not parent and child are connected by an operative altruism motive at all points in the life cycle

dynamic efficiency in the gifts economy abstract in the standard analysis of overlapping generations economies with gifts from children to parents each generation takes the actions of other generations as given the resulting equilibrium is dynamically inefficient in reality however parents realize that children will respond to higher parental saving by reducing gifts for a broad class of gift economies this implicit tax on saving pushes the equilibrium to dynamic efficiency this result reestablishes the potential relevance of the gift model to the us economy renders moot an important part of the ricardian equivalence debate and provides a motivation for a type of social security system

macroeconomic uncertainty and performance in the european union abstract we use a very general bivariate garch m model and monthly data on eu countries covering the 1962 2003 period to test for the impact of real output growth and nominal inflation macroeconomic uncertainty on inflation and output growth our evidence supports a number of important conclusions first in the majority of countries uncertainty regarding the output growth rate is related to the average growth rate and the effect in several countries is negative second in half of the cases there is no significant relationship between inflation uncertainty and output growth performance third inflation and output uncertainty have a mixed effect on inflation nevertheless considerable evidence for the cukierman meltzer hypothesis is obtained our conclusions are based on adopting both a structural and a reduced form bivariate garch model finally we also find statistically significant evidence of regime switching for both inflation and output growth volatility throughout the sample

government transfers and the samaritan s dilemma in the family this paper examines the effectiveness of government transfersin overcoming the samaritan s dilemma in a family in which thechild saves an insufficient amount in order to induce largerbequests from the parent the results are as follows first exogenous government transfers do not affect intergenerationalconsumption allocation if bequests are operative second assuming that government transfers are chosen strategically the government precommits to such a level of transfers fromthe parent to the child that bequests become inoperative andthus rids the child of the incentive for undersaving thisengenders an efficient intertemporal allocation ofconsumption

do private income transfers increase labor market risk abstract in a two stage model of private income transfers with a labor market we find that the aggregate effect of such transfers induces labor market responses to the increase in moral hazard thereby increasing the volatility of wages and lowering welfare the equilibrium level of transfers exceeds the socially optimum level

re examining inflation and inflation uncertainty in developed and emerging countries abstract this paper examines the relationship between inflation and inflation uncertainty for both developed and emerging countries we find new evidence that suggests positive inflationary shocks have stronger impacts on inflation uncertainty for mainly latin american countries

long term environmental problems and strategic intergenerational transfers the impacts of long lived stock pollutants and the measures supposed to address them link current and future generations altruism towards successor generations is a prerequisite for resolving the resulting intergenerational equity issues preference asymmetry and imperfect altruism introduce strategic conflicts between generations here a current generation decides on a combination of abatement and whether to provide an imperfect backstop the future generation decides whether to use the backstop or not we identify three outcomes 1 technology denial in which the current generation deliberately rejects the imperfect backstop to avoid misuse by the future generation 2 underabatement in which the current generation provides the backstop but reduces abatement activities and 3 overabatement in which the current generation provides the backstop but increases abatement activities the outcome depends non trivially on the assessment of collateral damages of the future generation uncertainty over future preferences renders technology denial more likely corresponding author bergheimer str 20 69115 heidelberg germany goeschl eco uni heidelberg de

dynamic aspects of family transfers parents transfer a great deal to their adult children and we have rich theoretical models providing a framework for these transfers however both the models and existing empirical work typically examine behavior in the cross section to date we know little about the dynamic aspects of family transfers here i examine transfers over a span of 17 years and find substantial changes in recipiency over time and a strong negative correlation between transfers and transitory income i also find that events such as job loss and divorce are strong predictors of parental transfers and although rare are typically associated with larger transfers than income alone might predict finally transfers are distributed unequally across siblings and perhaps surprisingly the distribution of transfers becomes even more unequal when examined over an extended period of time than in any single year the evidence presented here thus suggests that dynamic analyses can provide insights into behavior that are impossible to obtain in a static context

sibling rivalry and strategic parental transfers this paper develops a noncooperative nash model in which two siblings compete for their parents financial transfers treating sibling rivalry as a rent seeking contest and using a tullock skaperdas contest success function we derive the conditions under which more financial resources are transferred to the sibling with lower earnings we find that parental transfers are compensatory and that the family as an institution serves as an income equalizer within a sequential game framework we characterize the endogeneity of parental transfers and link it to parents income altruism and children s supply of merit goods e g parent child companionship or child services we show that merit goods are subject to a moral hazard problem from the parents perspective

efficiency enhancing signalling in the samaritan s dilemma suppose an altruistic person a is willing to transfer resources to a second person b if b comes upon hard times if b anticipates that a will act in this manner b will save too little from both agents point of view this is the samaritan s dilemma this paper shows that the undersaving result is mitigated if we relax the standard assumption of complete information because if a is uncertain about how big b s need for support is b will have an incentive to signal that he is in great need by saving more than he otherwise would have done

government debt redistributive fiscal policies and the interaction between borrowing constraints and intergenerational altrusim abstract we show how borrowing constraints intergenerational altruism and their interaction shape the aggregate savings response to government debt and fiscal policies that redistribute resources between living generations we also characterize the conditions under which borrowing constraints bind and the altruistic transfer motive operates in terms of the strength of the altruism motive the shape of the lifetime productivity profile the willingness to substitute consumption intertemporally and other factors finally we characterize the dynamic response of aggregate savings to nonneutral government debt policies in economies with binding borrowing constraints

samaritan versus rotten kid another look abstract we set up a two stage game with sequential moves by one altruist and n selfish agents the samaritan s dilemma rotten kid theorem states that the altruist can only reach her first best when the selfish agents move after before the altruist we find that in general the altruist can reach her first best when she moves first if and only if a selfish agent s action marginally affects only his own payoff the altruist can reach her first best when she moves last if and only if a selfish agent cannot manipulate the price of his own payoff

the asymmetric effects of uncertainty on inflation and output growth we study the effects of growth volatility and inflation volatility on average rates of output growth and inflation for post war us data our results suggest that increased growth uncertainty is associated with significantly lower average growth while higher inflation uncertainty is significantly negatively correlated with lower output growth and lower average inflation both inflation and growth display evidence of significant asymmetric response to positive and negative shocks of equal magnitude copyright 2004 john wiley sons ltd

giving women credit the strengths and limitations of credit as a tool for alleviating poverty abstract poor women in developing countries often turn to self employment as a way to support themselves and their families but these small scale activities rarely yield enough income to lift them out of poverty recently ngos and donor agencies have sought to assist these women by providing credit which is otherwise largely unavailable to them the broad aims of these programs vary as do the strategies which range from simply offering credit a minimalist approach to providing training and technical assistance as part of the credit package a credit plus approach the channels used bank schemes intermediary programs parallel programs or poverty focused development banks also vary so far the last three channels have been more effective than the first in improving women s access to credit however not enough is known about which strategies have the greatest economic impact for particular groups of women and further evaluation is needed

union strategy and optimal direct taxation restrictions on work hours are more important in countries with a large welfare state we show that this empirical observation is consistent with the strategic effects of such restrictions in a welfare state in the context of optimal direct taxation in the tradition of mirrlees 1971 our results also apply to non welfarist states which have income redistribution but not in purely extortionary states

motives for private transfers over the life cycle an analytical framework and evidence for peru abstract this paper tests for the motives for private income transfers we consider two motives altruism and exchange the question of private transfer motives is important because such motivation can influence the effects of public income transfers on the distribution of income using a household survey for peru we find that transfer amounts received increase with recipient pre transfer income which contradicts a key prediction of the strong form of the altruism hypothesis but is consistent with exchange we also find that capital market imperfections are likely to be an important cause of private transfers and that social security benefits crowd out the incidence of private transfers

the relationship between inflation and inflation uncertainty in the uk 1885 1998 abstract using a long series of uk inflation data i have provided strong evidence in favour of the hypothesis that inflationary periods are associated with high inflation uncertainty this result supports the friedman ball hypothesis and has important implications for the inflation output relationship provided that more inflation uncertainty leads to lower output

the supply of children s time to disabled elderly parents i introduction in recent years economists have become increasingly interested in intergenerational transfers of both time and money 1 such transfers may be motivated by altruism or exchange models of altruism assume that a person s utility depends on the consumption or utility of other family members and her own consumption for example children may supply unpaid informal care to aging parents because their utility increases when their parents are happier one of the most striking predictions of models of altruism is that public subsidies tend to crowd out transfers by altruistic individuals especially if the subsidy is financed by taxing the altruistic individual becker 1974 in exchange models there is typically altruism but one family member such as a parent can induce a relative such as a child or kid 2 to provide more services or money than the relative would normally provide by threatening to withhold a bequest to the extent that this is so one would plausibly expect more care and attention to be provided to wealthy parents when there is more than one kid more care should be provided because the threat of disinheritance is more credible when there is competition between kids for bequests in a well known article bernheim shleifer and summers 1985 hereafter referred to as bss found empirical support for the strategic bequest motive based on an observed positive relationship between children s visits and telephone calls to elderly parents per child as the measure of attention and bequeathable wealth per child as the measure of the financial motivation for providing such attention one might expect this result to extend to decisions about direct provision of help informal care that kids may provide to parents the marginal benefit of such care is plausibly greater than the benefit derived from a visit or telephone call in a recent article however we found no evidence that the strategic bequest motive is an important determinant of the amount of informal care kids provide or a related decision whether or not to place the parent in a nursing home sloan hoerger and picone 1996 we focused on the distinction between cognitively aware parents who can threaten to disinherit their kids and cognitively unaware parents who cannot disinherit and examined whether this distinction had any effect on the probability that the parent entered a nursing home or on amounts of formal and informal care received if the parent remained in the community any strategic effects were swamped by the greater marginal benefit of care to the parent when the parent was cognitively unaware moreover among the cognitively aware richer parents actually received less informal care contrary to the strategic model s predictions unfortunately in past research on intergenerational transfers of time and money it was not possible to control for the wealth wage and other characteristics of kids to the extent that kid s wealth and wage were positively correlated with parent s wealth which was observed the parameter estimates on parent s wealth may be negatively biased although parent s wealth and kid s wealth and wage rates are plausibly positively correlated they have opposite effects on the supply of kid s time according to the strategic bequest model that is potential bequests from a parent may be less attractive to rich kids and therefore induce less care we test the strategic bequest model using information on elderly parents and their children from two linked surveys the 1989 national long term care survey nltcs for elderly individuals and the survey of informal caregivers sic for a subsample of the elderly s children using these data we can include explicit measures of kid s wealth and wage rates thereby avoiding the possible bias introduced by a correlation between parent s and kid s wealth and wages also the data sets provide information on several pertinent health cognitive and functional status variables which are not typically observed in surveys of financial status

tax timing and liquidity constraints a heterogeneous agent model this paper considers the ricardian equivalence hypothesis in a model in which some families face binding liquidity constraints and others do not the source of heterogeneity that generates binding constraints in some families but not in others is shown to be the rate of intergenerational discount in an economy populated by these two types of families a change in tax timing has non ricardian short run effects but many ricardian long run effects this implies that heterogeneous agent models can reconcile some of the conflicting empirical evidence on ricardian equivalence copyright 1993 by ohio state university press

policy watch death watch for the estate tax the idea of making death a taxable event infuriates some people winston churchill called estate taxes an attempt to tax dead people rather than the living steve forbes campaigned in favor of no taxation without respiration bruce bartlett 1997 points out that a key plank in the communist manifesto was the abolition of inheritance rights opponents deride the death tax as inefficient inequitable and complex violating every norm of good tax policy supporters counter that the criticisms are overstated or wrong and argue that a highly progressive tax that patches loopholes helps provide equality of opportunity breaks up concentrations of wealth and encourages charitable giving can t be all bad these debates raise a number of research questions for economists in policy circles the death watch for the u s estate and gift tax is on in 1999 in a vote split almost completely along partisan lines the republican majority in

a new test of borrowing constraints for education we discuss a simple model in which parents and children make investments in the children s education investments for other purposes and parents can transfer cash to their children we show that for an identifiable set of parent child pairs parents will rationally under invest in their child s education for these parent child pairs additional financial aid will increase educational attainment the model highlights an important feature of higher education finance the expected family contribution efc that is based on income assets and other factors the efc is neither legally guaranteed nor universally offered our model identifies the set of families that are disproportionately likely to not provide their full efc using a common proxy for financial aid we show in data from the health and retirement study that financial aid increases the educational attainment of children whose families are disproportionately likely to under invest in education financial aid has no effect on the educational attainment of children in other families the theory and empirical evidence identifies a set of children who face quantitatively important borrowing constraints for higher education

testing among models of intrahousehold resource allocation households are the locus for much economic decision making households function as producers investors in human and physical capital managers of risk and as consumers many resources are allocated within households and the effects of many policies depend on the dynamics of household decision making for example household decisions about allocating food among individual household members may determine who benefits from programs to improve health nutrition or welfare in many microeconomic studies the household is treated as an individual for analytical purposes in other words it is assumed that a household acts as a single entity with a single set of preferences recently however a number of economists have recognized that households are sites of conflict as well as cooperation and have begun to use new classes of models to explain how resources are allocated among household members this literature has especially improved our understanding of households in which income is not completely pooled in such a setting standard household models may offer misleading conclusions about the effects of policies on individual household members i this paper goes beyond recent surveys of intrahousehold issue by explicitly examining the assumptions predictions and empirical implications of different intrahousehold models in particular it analyzes empirical tests that distinguish among competing models by clarifying the similarities and differences among alternative models this paper also clarifies what has actually been demonstrated and what has not been demonstrated by previous empirical studies in so doing the paper points to specific topics in need of further research this paper is organized as follows section 2 analyzes the assumptions and predictions of each of the five main classes of intrahousehold resource allocation models section 3 describes empirical tests of these assumptions along with an analysis of empirical work that has been generated sections 4 and 5 discuss the questions that remain unanswered and directions for future research

inflation and inflation uncertainty in argentina 1810 2005 abstract unit root tests results suggest that inflation in argentina for the period 1810 2005 is a stationary series when account is taken of structural breaks that coincide with bouts of hyperinflation a garch 1 1 model of annual inflation suggests a positive short run relation between the mean and variance of inflation supporting friedman s hypothesis that high inflation is associated with more variable inflation

kinship incentives and evolution we analyze how family ties affect incentives with focus on the strategic interaction between two mutually altruistic siblings the siblings exert effort to produce output under uncertainty and they may transfer output to each other with equally altruistic siblings their equilibrium effort is non monotonic in the common degree of altruism and it depends on the harshness of the environment we define a notion of local evolutionary stability of degrees of sibling altruism and show that this degree is lower than the kinship relatedness factor numerical simulations show how family ties vary with the environment and how this a ects economic outcomes

do microfinance institutions benefit from integrating financial and nonfinancial services this article examines the impact of microfinance plus i e coordinated combination of financial and nonfinancial services on the performance of microfinance institutions mfis using a global data set of mfis in 77 countries we find that the provision of nonfinancial services does not harm nor improve mfis financial sustainability and efficiency the results however suggest that the provision of social services is associated with improved loan quality and greater depth of outreach

bequests sibling rivalry and rent seeking we examine bequest sharing rules where sibling rivalry creates wasteful competition for intergenerational transfers we show that equal division of bequests minimizes rent seeking expenditures by siblings while primogeniture maximizes rent seeking costs our results lend theoretical support to the empirical findings of equal bequests without appeal to complex models of the parent child relationship

parent child bargaining parental transfers and the post secondary education decision schooling decisions are often modelled within a unitary preference framework in this article an alternative to the unitary preference model is proposed in which parents and child have conflicting preferences over parental transfers and the level of post secondary schooling and participate in cooperative bargaining as a means of resolving this conflict comparisons of the implications of the bargaining and unitary preference models motivate tests of parental altruism and income pooling to test these hypotheses reduced form transfer and schooling equations are estimated using data from the high school and beyond surveys the evidence suggests that the unitary preference model be rejected

microenterprise lending to female entrepreneurs sacrificing economic growth for poverty alleviation abstract this research compares the performance of female and male entrepreneurs in a microenterprise credit program in guatemala previous research and field practice has suggested that targeting credit at female borrowers allows for greater increases in household welfare but that male entrepreneurs may more aggressively expand enterprises when given access to credit in this paper we develop a model that shows that increases in value of home time during childbearing years for women may substantially account for gender differences in responses to credit access empirical results from guatemalan survey data yield estimations consistent with the predictions from our model

family policy with non cooperative families we consider a non cooperative model of a family s time allocation between market work and providing a home produced family public good such as child care or care for the elderly the model predicts underprovision of the public good because of crowding out this does not necessarily warrant public provision in contrast to other approaches in family economics we find that attempts to redistribute between spouses may alter the final distribution within the marriage and that such a policy may be pareto improving we also find that some degree of progressivity of the income tax can be welfare improving

king lear s dilemma precommitment versus the last word abstract we relax the prevalent assumption in the literature on intergenerational transfers that an altruistic parent can perfectly observe her child s activities and market opportunities we find that when private information and market risks are present precommitment by the parent to a transfer dominates having the last word

on inflation and inflation uncertainty in the g7 countries abstract the relationship between inflation and inflation uncertainty is investigated in the g7 countries from 1948 to 1993 garch models are used to generate a measure of inflation uncertainty and then granger methods are employed to test the causality between average inflation and inflation uncertainty in all g7 countries inflation significantly raises inflation uncertainty as predicted by friedman and ball weaker evidence is found that inflation uncertainty granger causes inflation in three countries us uk and germany increased inflation uncertainty lowers inflation while in two countries japan and france increased inflation uncertainty raises inflation

nominal uncertainty and inflation the role of european union membership abstract we provide evidence that higher inflation uncertainty leads to higher inflation in the new european union eu member states and candidate countries only prior to eu accession during eu accession and entry inflation uncertainty has no effect on mean inflation

public order and private payments evidence from the swedish soccer league abstract should organizers of events share the associated costs of maintaining public order we address this question by using unique data from the swedish soccer league where co payment for police were introduced for some clubs only the difference in differences analysis shows that co payments increased private guards by 40 and suggests a reduction of unruly behavior by 20 the results are consistent with our model where co payments alleviate under provision in efforts by organizers to combat problems such as hooliganism due to externalities and free riding on police services the model also sheds light on the critique that co payments could lead financially constrained organizers to provide less security