double dividend effectiveness of energy tax policies and the elasticity of substitution a cge appraisal there is a considerable body of literature that has studied whether or not an adequately designed tax swap whereby an ecotax is levied and some other tax is reduced while keeping government income constant may achieve a so called double dividend that is an increase in environmental quality and an increase in overall efficiency arguments in favor and against are abundant our position is that the issue should be empirically studied starting from an actual non optimal tax system structure and by way of checking the responsiveness of equilibria to revenue neutral tax regimes under alternate scenarios regarding technological substitution with the use of a cge model we find that the most critical elasticity for achieving a double dividend is the substitution elasticity between labor and capital whereas the elasticity that would generate the highest reduction in carbon dioxide emissions is the substitution elasticity among energy goods

applied general equilibrium models of taxation and international trade an introduction and survey we wish to acknowledge the help of three referees and of john pencavel on several earlier drafts as well as the assistance of the modelers whose work is referred to in the paper they corrected our lack of understanding of their work and provided many other helpful comments excellent research and bibliographical assistance have been provided by debbie fretz radwan shaban and janet stotsky helpful comments have been made by charles ballard michael boskin lans bovenberg sylvester damus harvey galper glenn harrison gordon lenjosek jack mutti serena ng t n srinivasan charles stuart and eric toder the authors also acknowledgefinancial support from the national bureau of economic research the national science foundation international business machines and the social sciences and humanities research council ottawa canada

nutrition alternative definitions and policy implications a growing body of literature has examined the interaction between nutrient intake household income and nutritional status in ldcs and has made policy recommendations on how to improve nutrition based on empirical studies of food expenditure systems at the household level recent studies include those by d f mccarthy k n murty and r radhakrishna j strauss m m pitt and j r behrman and a b deolalikar the recommendations derived from their analysis depend critically on the definition of nutrition used in those studies in this article we suggest that the definitions used in the above studies are unsatisfactory and in section ii we propose an alternative definition this is followed by a comparison of the implications of the different definitions for the income elasticity of nutrition in section iii for nutrition standards and malnutrition in section iv and for policies designed to improve nutrition in section v we intend hereby to further elucidate the nature of the relationship between nutrition nutrient intake income and other variables discussed below the policy implications are found to differ significantly for urban and rural areas section vi is the conclusion

efficiency and equity in the producer levy of india india s producer levy scheme has been considered a prime example of government market intervention to depress price incentives for farm producers analysis in this study shows that the scheme increases the average producer price for the short run with inelastic supply in this case significant improvements in income distribution can be obtained with little loss of economic efficiency if the scheme is implemented effectively however if the scheme is applied for the long run it might result in market instability more critically the scheme is likely to have an adverse effect on income distribution in the absence of effective implementation

the informal sector and the macroeconomy a computable general equilibrium approach for peru abstract this paper examines the macroeconomic implications of the informal sector in peru through the use of a structuralist computable general equilibrium model the lack of formal sector employment drives informal activity while formal and informal output are treated as imperfect substitutes simulations show that informal activity reduces the keynesian multiplier and complicates distributional issues as the income of formal workers and informal producers can move in opposite directions a final simulation highlights the limitations of strategies designed to promote the informal sector total output and income of informal producers decline following an increase in productivity in these processes

determinacy of equilibrium in stationary economies with both finite and infinite lived consumers abstract we consider the determinacy of perfect foresight equilibrium near steady state equilibria of stationary infinite horizon economies the work of t j kehoe and d k levine econometrica 53 1985 433 453 is generalized by the inclusion of both infinite lived agents and overlapping generations of finite lived agents and the inclusion of production and non depreciating pure rents we show that indeterminacy is possible in robust examples and that the dimension of the indeterminacy can be as large as the number of goods per period we also discuss extreme cases in which determinacy is guaranteed

household food consumption in the dominican republic effects of income price and family size between may 1976 and april 1977 the central bank of the dominican republic conducted the first nationwide survey of household income and expenditure ever taken in the country the only previous survey of this kind was conducted in 1969 by the national statistical office and was limited to the capital city of santo domingo fifteen municipios including the principal cities of the country were included automatically in the new sample another 24 municipios were chosen to represent the rest of the country and urban and rural samples were drawn separately in each applying a sampling probability of 1 200 to the estimated 889 313 households in the country led to an initial sample of over 4 400 observations of which 4 028 1 681 urban and 2 347 rural remain in the final data after cleaning

household equivalence scales and interpersonal comparisons recent papers have used household equivalence scales to construct measures of welfare inequality this procedure rests on an often implicit value judgement namely that if after adjustment for demographic characteristics two households are on the same indifference curve they are equally well off that value judgement is not compelling and there are situations in which it is ethically repugnant this is particularly likely if tastes are functions of past experience and income

poverty and household size the widely held view that larger families tend to be poorer in developing countries has influenced research and policy the scope for size economies in consumption cautions against this view we find that the correlation between poverty and size vanishes in pakistan when the size elasticity of the cost of living is about 0 6 this turns out to be the elasticity implied by a modified version of the food share method of setting scales by contrast some measures of child nutritional status indicate an elasticity of unity consideration of the weight attached to child versus adult welfare may help resolve the non robustness of demographic profiles of poverty excerpt

equivalence scale relativities and the extent of inequality and poverty most inequality and poverty theory analyzes equivalent income distributions for homogeneous populations incomes are assumed to be deflated by an equivalence scale that accounts for differences in needs between households yet in practice there is no consensus about what the appropriate equivalence scale is the authors analyze how the choice of equivalence scale affects inequality and poverty measures and show that there is a systematic relationship between equivalence scale generosity and the extent of inequality and poverty they consider most of the measures in common use and provide some empirical illustrations copyright 1992 by royal economic society

non linearities and equivalence scales this paper focuses on the estimation and testing of equivalence scales in the context of a demand system with nonline ar logarithmic expenditure effects in its budget share equations the authors show that such nonlinearity enables one to identify the scal es without demographic separability restrictions on preferences and to avoid false rejection of the hypothesis that the scales are independ ent of the base utility level the empirical analysis is based on micro data drawn from the u k family expenditure survey copyright 1993 by royal economic society

a general equilibrium analysis of price controls and subsidies on food in mexico abstract in this paper we present a general equilibrium model that permits a thorough analysis of the effects of government pricing policies in particular we study the effects of price controls and subsidies on agricultural and food items in mexico we analyze alternative policies for reducing the government deficit by cutting subsidies and increasing indirect taxes our results indicate that although food subsidies need to be reduced maintaining some subsidies would have a favorable impact on income distribution

on testing the scale sensitivity of poverty measures past tests of the sensitivity of aggregate poverty measures to changes in equivalence scales can be very sensitive to the arbitrary choice of the pivotal reference demographics it is recommended that future tests should use demographics typical of people living near the poverty line as their reference

farmers marginal propensity to consume an application to illinois grain farms the marginal propensity to consume mpc for a sample of eighteen illinois farms over the 1979 86 period is determined four consumption models were estimated using disposable household income plus depreciation as the measure of income estimated short run mpcs ranged from 0 007 to 0 020 while long run mpcs varied between 0 143 to 0 381 these results indicate farm family consumption responded little to changes in income and that the life cycle hypothesis model explains consumption significantly better than the other models robustness of the results is demonstrated using a larger sample of farms for 1986 87

a computational general equilibrium model with endogenous unemployment an analysis of the 1980 fiscal reform in mexico abstract in this paper we develop a general equilibrium model of the mexican economy in which unemployment and government deficits play important roles the unemployment rate depends on a downwardly rigid real wage in the urban sector the government runs a deficit simply by selling bonds that consumers consider perfect substitutes for physical capital as savings instruments the model is used to analyze the impact of the 1980 fiscal reform the presence of the rigid real wage and alternative specifications of government policies regarding the size of the deficit are found to have significant effects on the comparative statics results whether or not the reform improves the welfare of rural households compared to urban households for example depends on whether government policy is to keep the deficit constant or keep expenditures constant in response to changes in tax revenues

terms of trade and class conflict in a computable general equilibrium model for mexico a computable general equilibrium model for mexico is constructed in which class conflict over the distribution of the surplus is the principal determinant of the terms of trade the model consists of seven social classes and eight productive sectors classes are distinguished as fundamental or subsumed according to whether their incomes are primarily determined by conscious class struggle or by the resulting system of relative prices flexible prices are assumed to clear markets for which non produced means of production such as agricultural land limit supply while output in the remaining sectors is determined by the level of effective demand for the latter sectors two theories of price formation are compared and are seen to differ radically in their implicit conception of the nature of class conflict a keynes kalecki closure is considered in which prices are determined by a fixed mark up on costs this enables capitalists to protect themselves from incursions on the rate of profit due to labou

the developing world is poorer than we thought but no less successful in the fight against poverty a new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute poverty measures for the developing world we find that 25 of the population lived in poverty in 2005 as judged by what poverty typically means in the world s poorest countries this is higher than past estimates substantial overall progress is still indicated the corresponding poverty rate was 52 in 1981 but progress was very uneven across regions the trends over time and regional profile are robust to various changes in methodology though precise counts are more sensitive

computable general equilibrium models for development policy analysis in ldcs abstract the use of cge models has gained much popularity among policy analysts in ldcs and there is a fast growing body of literature on this area of economics in this survey the advantages of general equilibrium approach over partial equilibrium approach in analysing a wide range of policy issues are highlighted the evolution of cge modelling is discussed and more than 60 cge applications related to different policy issues in ldcs are surveyed this comprehensive survey shows that the cge models have become quite popular analytical tools among policy analysts in ldcs over the last decade or so the debate in the economic profession regarding the value and appropriateness of using cge models for policy analysis is examined in the final section of this paper some of the criticisms levelled at cge models are discussed and it is argued that despite this criticism such models are capable of providing insight into important policy problems

public transport reliability and commuter strategy we consider the modeling of a bi modal competitive network involving a public transport mode which may be unreliable and an alternative mode commuters select a transport mode and their arrival time at the station when they use public transport the public transport reliability set by the public transport firm at the competitive equilibrium increases with the alternative mode fare via a demand effect this is reminiscent of the mohring effect the study of the optimal service quality shows that often public transport reliability and thereby patronage are lower at equilibrium compared to first best social optimum the paper provides some public policy insights

the effect of price and income changes on food energy intake in sri lanka data is used to analyze the food acquisition behavior of households from a 1980 81 survey designed to be nationally sectorally and regionally representative of sri lanka the poor are shown to be much more responsive to price and income changes than other income groups the urban population generally exhibits lower income elasticities of demand for food commodities the poor appear to efficient substitutors thereby mitigating the effects of a price change on caloric intake the important exception is rice whose elasticity of calorie consumption with respect to price was about 4 times higher than for any other commodity the reluctance of households to substitute for rice even when faced with rising prices coupled with its large budget share show rice to be the most important consumption good higher rice prices are an important determinant of poverty for landless and urban workers moderating food prices preferably through technological change is a key ingredient to raising consumption among the poor simulations show that even if there are rapid and proportional increases in expenditures of all income groups this will not dramatically increase caloric intake among the poor however if the absolute value of the increase in real expenditures were distributed equally to all households there would be a marked increase in the of households consuming an adequate diet

the commercialization of agriculture and household level food security the case of southwestern kenya abstract results from a 1984 1985 study in south nyanza kenya to evaluate the effects of shifting from maize to sugarcane production on household level food security are presented household food security is not jeopardized by the entry into commercial agriculture the area allocated to subsistence food production is similar for sugar and non sugar producing households incomes of sugarcane producers are significantly higher than non cane producers and a portion of this incremental income is used to increase household caloric intake the conventional wisdom that the transition to commercial agriculture causes a deterioration in household level food security is not borne out by the results from the present study

joint determination of food consumption and production in rural sierra leone estimates of a household firm model abstract this paper investigates the determination of food consumption for rural households in sierra leone that produce the foods which they consume a household firm model is estimated with seven commodities including five foods non foods and labor as compared to three commodities in past studies such food disaggregation permits tracing of the effects of socioeconomic variables on household nutrient availability household specialization in production is such that censored data is a problem a tobit approach is used to correct for this for most crops the own price effects on consumption remain negative when a price change is allowed to shift the budget constraint by effecting the profits from home production elasticities of calorie availability with respect to toal expenditure are found to be sizeable varying little by expenditure group the price elasticities of calorie availability are generally positive however an important exception occurs for price of the staple food rice this exception has several important policy implications which are explored

will developing country nutrition improve with income a case study for rural south india aggregate estimates of food expenditure are consistent with such a possibility implying income expenditure elasticities close to one however the high degree of aggregation at which such estimates are made means that the considerable increase in price per nutrient as income increases is ignored and the nutrient elasticities are therefore overstated estimates for a rural south indian sample indicate that this bias is considerable and that the true nutrient elasticities with respect to income may be close to zero

disaggregating food consumption parameters designing targeted nutritional interventions abstract this article is concerned with a new nutritional intervention strategy which is based on the belief that malnourished people eat different types of food to the well nourished the calculation of disaggregated food consumption parameters can identify inferior food commodities and the subsidization of these commodities will target intervention to those most in need the effectiveness of this policy depends on the understanding of its theoretical basis the author introduces the policy maker to this by reviewing the theoretical basis for consumption analysis and then several key studies

effects of subsidized wheat consumption by state in india this paper reports the results of a study of the effects of the indian government s consumer subsidies on wheat demand results indicate consumption of subsidized wheat is higher in urban areas than in rural areas the public distribution of wheat in most states had little effect on demand in the commercial market which suggests the government is effective in targeting subsidized wheat to poor consumers

determinants of food consumption in rural sierra leone abstract this paper reports the application of a quadratic expenditure system with demographic variables to the household consumption leisure choice component of a household firm model a system of seven commodities is estimated including five foods non food and leisure appropriate for such a level of disaggregation a demand system is used the quadratic expenditure system which allows for a flexible relationship between full income and commodity expenditures without sacrificing parsimony in parameters demographic data on households are explicitly incorporated into the model allowing for a richer specification than can be achieved by using per capita variables the data are from a cross section survey of households in rural sierra leone price variation exists by region permitting estimation of a complete demand system engel curves are found to be significantly non linear with marginal expenditure on rice the major staple declining with higher income most foods are found to be reasonably price responsive with sizeable own price substitution effects declining with higher income aggregate labor supply is found to be price inelastic

introduction food policy food aid and economic adjustment abstract in this introduction to food policy s special issue the guest editors look at the various ways in which food policy food aid and economic adjustment can interact to mutual advantage as developing countries pursue economic adjustment strategies to compensate for the unprecedented world recession concern is being expressed about the condition of poor people in low income countries and the need for adjustment with a human face with increasing amounts of aid resources being used for adjustment programmes interest has grown that food aid should also be used more purposefully to support the adjustment process

welfare effects of selected food grain policies in india abstract government s policy interventions in the market for food grains affect supply as well as demand in this paper the welfare effects of certain food grain policies are analysed while taking into account the interdependence of the various sectors in the economy adequate structure is built into the model in order to study the effects of a dual price structure on farmers supply response and also the effects of public distribution schemes on the aggregate demand for food grains policy implications are derived by computing the market clearing prices and their movement under alternative assumptions regarding the nature of the market

a computable general equilibrium analysis of a property tax limitation initiative in idaho idaho voters rejected a property tax limitation initiative in 1996 before the election proponents claimed the decrease in revenues would be offset from the increase in economic activity we developed a computable general equilibrium model based on tradable and non tradable sectors to hypothesize the impact on idaho s public finances household income and economic growth with and without the initiative s tax policy the model predicts that each 3 reduction in property tax revenues would result in an overall 2 loss in state and local revenues the benefits are predicted to be 35 per low income household and 738 per high income household the federal government would receive 1 additional revenues from idaho r51 most economists who use computable general equilibrium cge models to analyze the impacts of tax reforms focus their attention on the national and multi regional level 3 waters holland and weber 1997 were the first ones to use a cge model to analyze the general equilibrium impacts of a property tax reduction oregon s measure 5 on a state s economy they compared the results of a two sector goods and services cge model to those of a fixed price input output model they concluded that cge models represent a significant advancement over fixed price input output models for estimating economy wide effects of a property tax reform in addition they demonstrated the ability of these models to incorporate after tax effects on the distribution of household income one shortcoming of the waters holland and weber approach is that the goods and services sectoring scheme used in the cge model is convenient but conceptually incorrect these categories are approximations of the theoretically correct distinction of tradable and non tradable sectors in this study we evaluate the potential impact of a 50 property tax reduction proposed in the one percent initiative on idaho s economy from a general equilibrium perspective we introduce a two sector tradable and non tradable cge model for the state of idaho we argue that our approach is more conceptually accurate and deductively coherent than the waters holland and weber approach in hypothesizing the direction and size of a tax policy shock on a regional economy the distinction between tradable and non tradable sectors is important conceptually both to understand a region s economic behavior and to measure the effects of a change in policy correctly the results provide testable hypotheses on the likely impact from a

household equivalence scales theory versus policy researchers agree that household equivalence scales are intended to measure the variation in income needed to bring households of different composition to the same welfare level researchers do not agree however about how the term household welfare is to be defined this article traces the historical and philosophical development of three distinct definitions when the conceptual bases of several popular methods for the estimation of equivalence scales are explored it becomes clear that advances in theoretical rigor have not always worked to bring the literature closer to answering questions of policy concern

dollar a day revisited the article presents the first major update of the international 1 a day poverty line proposed in world development report 1990 poverty for measuring absolute poverty by the standards of the world s poorest countries in a new and more representative data set of national poverty lines a marked economic gradient emerges only when consumption per person is above about 2 00 a day at 2005 purchasing power parity below this the average poverty line is 1 25 which is proposed as the new international poverty line the article tests the robustness of this line to alternative estimation methods and explains how it differs from the old 1 a day line

the economics of crowding in rail transit abstract we model trip timing decisions of rail transit users who trade off crowding costs and disutility from traveling early or late with no fare or a uniform fare ridership is too concentrated on timely trains marginal cost pricing calls for time dependent fares that smooth train loads and generate more revenue than an optimal uniform fare the welfare gains from time dependent fares are unlikely to increase as ridership grows however imposing time dependent fares raises the benefits of expanding capacity by either adding trains or increasing train capacity we illustrate these results by calibrating the model to the paris rer a transit system

equilibrium under price controls with endogenous transactions costs abstract in this paper we present an equilibrium model for an exchange economy with fixed prices and endogenously determined search or transactions costs given the fixed prices endogenously determined equilibrium buying and selling prices which include transactions costs result these costs occur on either the demand or supply side of each market but not both we see an eventual application of this approach to an evaluation of welfare costs of either economy wide wage and price controls or sector specific price controls such as energy in the final section we present some simple numerical examples which illustrate the approach

measuring poverty and differences in family composition the equivalence scales used to adjust for differences in family composition when measuring poverty exhibit considerable variation this paper suggests an alternative approach that allows for differences in social judgements regarding the treatment of different types of family and examines the relation with the choice of poverty measure the resulting dominance criteria cannot provide a complete ranking but allow the extent of disagreement to be identified their application is illustrated by the example of changes in child benefits copyright 1992 by the london school of economics and political science

trade liberalization in a multinational dominated industry abstract existing theoretical models in the trade industrial organization literature assume almost exclusively that firms are national enterprises so that there is no international coordination by multinational firms we develop a model in which multinationals compete among themselves but coordinate production pricing and sales decisions across multiple plants and markets free entry and exit is assumed and cases in which the multinationals can and cannot segment markets are considered the model is simulated using data from the north american auto industry results are compared with a counter factual model calibrated to the same data which assumes national ownership of firms

household economies of scale in consumption theory and evidence household economies of scale arising from the existence of househo ld public goods increasing returns in household production and or bulk discounts are incorporated into a utility theoretic model of household demands individuals are assumed to be identical and symmetrically treated within households economies of scale parameters for five goods are estimated using the quadratic expenditu re system and data from the u s consumer expenditure survey on expenditures by all adult households results suggest the existence o f significant economies of scale in the consumption of all of the included goods with economies being especially pronounced in the consumption of shelter copyright 1988 by the econometric society

sectoral balance in development a survey abstract this paper surveys the literature on sectoral balance to see how sectoral imbalances can retard economic development it examines definitions of sectors and balance provides background facts theories and planning tools reviews the debate on balanced growth and surveys two sector models of agriculture industry consumption investment and luxury basics interaction the open economy and the role of service nonmarket and unproductive sectors it argues that the examination of important development issues requires multisectoral analysis incorporating the insights of several of these models and that alternative models with different structural characteristics deserve attention

corporate tax integration in the united states a general equilibrium approach this paper presents estimates of static and dynamic general equilibrium resource allocation effects for four alternative plans for corporate and personal income tax integration in the united states a medium scale numerical general equilibrium model is used which integrates the u s tax system with consumer demand behavior by household and producer behavior by industry results indicate that total integration of personal and corporate taxes would yield an annual static efficiency gain of around 6 billion 1973 dollars partial integration plans yield less dynamic effects are larger and our analysis indicates that full integration may yield gains whose present value is as large as 500 billion or about 1 0 percent of the discounted present value of the gnp stream to the u s economy after correction for population growth plans differ in their distributional impacts although these findings depend on the nature of replacement taxes used to preserve government revenues the size of dynamic resource allocation effects is sensitive to the choice of the replacement tax while static gains are reasonably robust

global extreme poverty rates for children adults and the elderly chen and ravallion s estimates of global extreme poverty rates are well known this note by considering how these rates vary by age group reaches two important and policy relevant conclusions and emphasizes a central avenue for future research the first is that child extreme poverty rates are 50 higher than adult ones and almost twice those of the elderly this result depends on assuming that all individuals in a household have the same resource needs and no economies of scale exist as in the world bank standard approach conversely if conservative estimates of economies of scale and individual discount factors are adopted global extreme poverty rates and the child adult gap are much smaller than the chen and ravallion estimates these findings highlight the policy importance of research efforts towards understanding how needs vary within a household and with its size

estimation of a two level demand system with limited dependent variables a two level demand model was derived from a strongly separable conditional indirect utility function to analyze dominican rural and urban household consumption at different income levels for samples with significant zero consumption a multivariate limited dependent variable model utilizing the concept of virtual prices was used to obtain consistent estimates of consumption parameters results show that households with higher incomes tend to be less responsive to own price and income changes in consumption of most food and nonfood commodities for demographic variates the elasticities of rice and aggregate food with respect to household composition variables are all positive with few exceptions price and income responses of household food and nonfood consumption have significant policy importance this study provides insights into the consumption behavior of rural and urban dominican households within the framework of a complete demand system three basic groups of determinants of household consumption are explored commodity prices household total expenditure and demographic variables our treatment of these fundamental issues involves the application to demand analysis of a a classical theoretical result about commodity decentralization and price aggregation and b an econometric technique to deal with limited dependent variables in the demand system framework the analysis of detailed commodities is often prohibitive because increasing the size of the demand system substantially increases the number of unknown parameters to estimate a relatively large number of parameters in this study the theoretical implications of twostage budgeting and perfect price aggregation are used to construct a two level demand model that is consistent with constrained util

an evaluation of indian government rice policy in tamil nadu abstract the indian government procures rice from wholesalers or producers at a price below the market price and then distributes it to low income consumers at a subsidized price this paper uses a simulataneous equations econometric model to evaluate the effects of this policy on supply demand of rice in the state of tamil nadu between 1956 and 1985 results show that production is more responsive to power for irrigation and fertilizer prices than to output prices because supply is inelastic producers bear the burden of the tax imposed by procurement even though rice is procured from the wholesaler rice distributed by the government displaces rice demanded in the open market and thus the government distribution of rice has not increased the total consumption of rice

non produced means of production in sraffa s system basics non basics and quasi basics all value land and other non produced means of production can make no contribution to the value of commodities rent is consequently a deduction from the total surplus produced by labour although the labour theory of value has been the subject of extensive criticism for more than a century the associated issues of non produced means of production1 have been largely ignored indeed steedman 1977 who argues that the entire apparatus be abandoned and replaced with sraffa s 1960 theory of production prices makes no refer ence to the problem of rent this paper investigates the extent to which the classical intuition regarding non produced means of production is consistent with sraffa s system in production of commodities by means of commodities sraffa provides a rigorous refor mulation of the classical theories of intensive and extensive rent noting that land and natural resources occupy among means of production a position equivalent to that of non basics among products in single product systems non basics are typically interpreted as luxury goods and it can be shown inter alia that technical progress in non basic industries does not affect the system of relative prices and the economy wide rate of profit if it is true that land is always non basic then we might conclude that the classical view is broadly confirmed by sraffa s modernisation of the theory of value unfortunately both the extensive and intensive systems are formally multiple product process economies for which the definition of non basics is considerably more subtle and complex than in single product industries 2 important properties of single product non basics do not always survive the transition to multiple product economies prices and profits may respond in unexpected ways to technical change taxes and class conflict over the distribution of the surplus the source of the perverse behaviour is traced to a class of commodities characterised here as quasi basics the paper is organised as follows in section 2 we show that in systems with extensive

multiplicity of equilibria and comparative statics conditions that guarantee the uniqueness of equilibrium in models of economic competition are crucial to applications of these models in exercises of comparative statics until now most of the attention given to the uniqueness question has been focused on pure exchange economies in this paper we use a topological index theorem to derive necessary and sufficient conditions for the uniqueness of equilibrium in economies with production unfortunately conditions that imply uniqueness appear to be too restrictive to have much applicability we argue for example that the only economically interpretable restrictions that imply uniqueness are either that the demand side of an economy behaves like a single consumer or that the supply side is an input output system our results suggest a need for reformulation of the comparative statics method

bank failures and fiscal austerity policy prescriptions for a developing country abstract this work employs a dynamic general equilibrium model to evaluate the causes and implications of bank insolvencies we apply the model to stylized data from bangladesh a country whose banking system is currently suffering from large stocks of non performing assets the model is used to derive positive conclusions about alternative policy instruments designed to alleviate the impact of these insolvencies a benchmark case is simulated using historical exogenous parameters we then generate a bank failure by assuming that firms cannot service their debt if their interest obligations rise above their anticipated return on capital the public withdraws deposits from the banking system in reaction to worries about defaulting bank assets if banks optimize by restricting credit to risky borrowers these failures can be partially avoided such bank behavior is often prohibited in developing countries so we investigate an active monetary policy that compensates banks for withdrawn deposits the resulting outcome indicates that such a policy can slow the pace of bank failures although at the cost of certain macro imbalances our final simulation imposes a reduction in public spending in order to tighten fiscal policy and thereby reduce budgetary pressure the resulting decline in interest rates eliminates all investor defaults and bank failures we conclude that the combination of compensating monetary policy and restrictive fiscal policy may offer the best way of responding to a bank crisis

new global estimates of child poverty and their sensitivity to alternative equivalence scales this paper uses micro data from household surveys from 89 countries to estimate the rate of extreme poverty among children in the developing world 19 5 of children are estimated to live on less than 1 90 per day as opposed to 9 2 of adults poverty rates for children remain above 17 and are greater than adult poverty rates for all reasonable two parameter equivalence scales

macroeconomic issues for latin america abstract recent macroeconomic issues in latin america are reviewed with an emphasis on theory topics covered include multiple equilibria from hysteresis or increasing returns exchange rate management and the output and asset market effects of devaluation speculation interest rate management and financial reform government behavior income distribution and growth inertial inflation and heterodox policy shocks and disequilibrium theories

economics of a bottleneck abstract drawing on vickrey amer econ rev 59 251 261 1969 and subsequent literature this paper provides a thorough economic analysis of the simplest bottleneck model of road congestion with peak load demand in the morning rush hour a fixed number of identical individuals one per car must travel from home to work between which is a bottleneck of given capacity the costs of travel include queuing time and schedule delay time early or late for work the frequency distribution of departure times adjusts so that in equilibrium all individuals have the same travel costs the paper extends the previous literature by examining a coarse toll and solving for optimal capacities the application of congestion tolls can generate efficiency gains by altering the frequency distribution of departure times previous estimates of the efficiency gains from congestion tolling are likely to be substantially downward biased because they have ignored this effect