bulls bears and market sheep abstract a deterministic excess demand model of stock market behavior is presented that generates stochastically fluctuating prices and randomly switching bear and bull markets

a characterization of erratic dynamics in the overlapping generations model abstract in this paper we characterize and give examples o wide classes of utility functions which generate erratic dynamics in the standard deterministic overlapping generations model erratic dynamics refers to feasible trajectories which are bounded but which do not converge to stationary points or periodic orbits we show that such trajectories are pareto efficient we introduce credit into the model and show how a constant credit expansion rate can result in erratic trajectories in prices and the real value of credit finally we briefly discuss certain technical aspects of the mathematics used and the statistical nature of the dynamics that can arise from deterministic dynamical systems

side effects of nonlinear profit taxes in an evolutionary market entry model abrupt changes coexisting attractors and hysteresis problems in order to demonstrate that nonlinear tax systems may have surprising and potentially undesirable side effects we develop an evolutionary market entry model in which firms decide on the basis of past profit opportunities whether or not to enter a competitive market our main focus is on the case of a proportional tax on positive profits such a piecewise linear tax scheme induces a kink in the firms profit functions and may lead to abrupt changes in a market s dynamics coexisting attractors and hysteresis problems since these phenomena can also be observed in more general models a proper understanding of their basic mechanism may be helpful to explain the intricate behavior of many economic systems

international trade and the possible occurrence of chaos abstract the paper demonstrates that international trade among fluctuating economies may involve the occurrence of a strange attractor and hence of chaos once autonomous economies display cyclical behavior international trade activities can be considered as a perturbation of the motion of the autonomous economies possible implying chaos via a theorem by newhouse ruelle and takens 1979

the political economy of expenditures by the peruvian social fund foncodes 1991 95 the peruvian social fund foncodes was created by president alberto fujimori in 1991 with the stated objectives of generating employment alleviating poverty and improving access to social services this article uses province level data on monthly expenditures socioeconomic indicators and electoral outcomes to analyze political influences on the timing and geographic distribution of foncodes expenditures between 1991 and 1995 i reach three main conclusions first these expenditures increased significantly before national elections second foncodes projects were directed at provinces in which the marginal political effect of expenditures was likely to be largest third these projects favored the poorest provinces which suggests that the program also had a redistributive function the results are robust to a large number of specifications and controls the peruvian data support predictions made in the literature on political business cycles as well as the literature on political influences on the allocation of discretionary funds

caution implies profit abstract the paper illustrates by simple cobweb models that under certain circumstances fluctuations in perpetual disequilibrium may not only be viable but also preferable to a competitive equilibrium from the long run perspective

domestic costs of statutory marketing authorities the case of the canadian wheat board the canadian wheat board cwb is a statutory marketing authority with exclusive control over exports of canadian wheat and barley and sole authority over domestic marketing of milling wheat and malting barley it is a government marketing board with implicit monopoly rights over the supply of wide ranging marketing services to farmers but with no legal responsibility to farmers these characteristics fit a stylized niskanen model of bureaucratic decision making where the cwb is modeled as supplying excess marketing services to farmers allowing the market to determine the quantity of marketing services would result in lower marketing costs and presumably higher farm incomes

equilibrium models displaying endogenous fluctuations and chaos abstract this paper surveys current developments in dynamic general equilibrium theory concerned with conditions under which endogenous fluctuations are possible existing contributions are divided into two classes the larger one consists of models with a unique perfect foresight equilibrium while the second includes models where equilibrium is indeterminate and the set of equilibria involving endogenous fluctuations includes sunspots equilibria while the two classes of models involve oscillations of different natures and with different policy implications we show that both are consistent with optimizing behavior and competitive equilibrium

do conditional cash transfers affect electoral behavior evidence from a randomized experiment in mexico this article reexamines the argument that targeted programs increase pro incumbent voting by persuading beneficiaries to cast ballots against their first partisan choice the evidence comes from the randomized component of progresa the pioneering mexican conditional cash transfer cct program experimental data show that early enrollment in the program led to substantive increases in voter turnout and in the incumbent s vote share in the 2000 presidential election the experiment also reveals that opposition parties vote shares were unaffected by the program thus the electoral bonus generated by ccts may be best explained by a mobilizing rather than persuasive mechanism these findings are difficult to reconcile with the notion that the electoral effects of ccts are a result of prospective concerns triggered by threats of program discontinuation or endogenous program enrollment instead the evidence in this article suggests that ccts mobilizing effects are compatible with programmatic politics

on endogenous competitive business cycles the belief that the long run equilibrium of a competitive monetary economy that does not experience any exogeneous shocks whether originating from the external environment or from policy should be modelled as a state that is stationary or perhaps growing at a constant rate seems to be deeply rooted in the mind of some economists

economies of scale and market structure in international grain trade a large body of literature has examined international grain trade in imperfectly competitive models the article develops a two stage duopoly model that considers a private trader and a state trading enterprise ste competing on a foreign market the key difference between the private trader and the ste is their international organization while the ste makes use of external agents to export the private firm may choose to internalize international transactions the game is solved for different modes of competition and under both assumptions of homogeneous and differentiated products in order to assess how these assumptions affect the outcome of the game the results of the game are examined by using numerical examples the analysis shows that external shocks on export markets may result in a change of market structure and consequently of market shares these effects depend on the initial market structure furthermore the degree of product differentiation and the assumed mode of competition significantly affect the relative values of transaction and fixed costs at which the market structure changes

statistical dynamics and walras law abstract much interest has been shown on identifying the chaotic behavior generated from t tonnement process recently the aim of this article is to direct the research in exploring its statistical dynamical properties two typical types of ergodic t tonnement processes restricted t tonnement and unrestricted t tonnement have been studied their long run statistical characteristics such as time average of price excess demand and inflation rate are discussed in theory and by computer simulations

deregulation as welfare reducing trade reform the case of the australian wheat board state trading enterprises are distinguishable from private commercial firms by the nature of their exclusive rights and objectives deregulation of the australian wheat board is used to illustrate the effects of these rights and objectives on trade and welfare theoretical models are specified and the effects measured through calibrated partial equilibrium models it was found that the successive deregulations of the australian wheat board caused it to switch from being equivalent to an export subsidy to today being equivalent to an export tax at the same time deregulation has not necessarily been welfare enhancing

incorporating marginal citizens and voters the conditional electoral effects of targeted social assistance in latin america in this article we study how social assistance shapes election results across latin america case studies in several countries have found electoral effects yet it remains unclear whether and how effects vary cross nationally and whether electoral effects are due to mobilization or persuasion we theorize that programs mobilize non voters and convert the opposition simultaneously but that the effects vary based on country level political and programmatic differences using 2012 americasbarometer data we develop a unified cross national model that confirms that public assistance makes recipients more likely to turn out and once at the polls to vote for the incumbent compulsory voting laws and program politicization magnify the electoral effects of social assistance but effects do not vary by presidential ideology or program conditionalities these findings are consistent with the perspective that latin american voters are boundedly rational retrospective agents whose behavioral choices depend on t

on the complicated price dynamics of a simple one dimensional discontinuous financial market model with heterogeneous interacting traders abstract we develop a financial market model with heterogeneous interacting agents market makers adjust prices with respect to excess demand chartists believe in the persistence of bull and bear markets and fundamentalists bet on mean reversion moreover speculators trade asymmetrically in over and undervalued markets and while some of them determine the size of their orders via linear trading rules others always trade the same amount of assets the dynamics of our model is driven by a one dimensional discontinuous map despite the simplicity of our model analytical graphical and numerical analysis reveals a surprisingly rich set of interesting dynamical behaviors

vertical coordination antitrust law and international trade this paper demonstrates that vertically aligned private or public organizations are capable of generating strategic trade advantage similar to that acquired through direct government export subsidization the model considers two forms of vertical coordination that lead to advantageous trade positions in international markets upstream vertical restraint and downstream equity sharing such practices are commonly employed both by state trading agencies and by private firms in nations with lenient antitrust laws the finding has important implications under new world trade organization wto rules intended to reduce government intervention in international transactions recent reforms in the wto favor nations that sanction highly refined vertical linkages between firms while nations with stringent antitrust legislation have an incentive to negotiate for greater harmonization of international laws

the lead lag relationship between canadian and u s wheat prices in 1966 mccalla asserted that the international wheat market was a duopoly dominated by canada and the united states he argued that canada was a price leader and united states was a price follower in 1970 mccalla abandoned this model arguing that growing export supply in australia and france also made them able to affect the world wheat price he argued that the united kingdom the european economic community eec japan and mainland china imported enough wheat to enable each to affect the world price thus mccalla asserted the international wheat market was an oligopoly on the selling side and an oligopsony on the buying side in 1978 alaouze watson and sturgess extended mccalla s original duopoly model to a triopoly with australia as the third major exporter and canada as the price leader their model was assumed to hold until 1972 when high unstable prices and low carryover stocks suggested that the market was operating essentially competitively they further suggested prices had begun to fall and stocks were increasing indicating that some form of stable oligopoly was returning in 1979 carter and schmitz asserted that the international wheat market was an oligopsony with japan and the eec as the major importers they argued that it was irrelevant whether or not the major exporters behaved as oligopolists the major importers held the dominant influence on prices lack of agreement about the structure of the international wheat market is not surprising it probably reflects structural change in the market over time a duopoly with canada as the price leader might have been appropriate for some years but a triopoly or oligopsony might have been more accurate for other periods changing structure creates major difficulties for empirical analysis for estimating behavioral relationships with historical data rojko suggested that where structural change occurred one should split the time series estimating separate equations for each sub period however the problem is to determine when a significant structural change occurs in the market this is important for splitting time periods ten or fifteen years ago where we have historical perspective and it is also important in recent periods if we wish to make useful policy analyses or forecasts ideally we would like an objective indicator of market structure this study does not achieve such an indicator although it may be a modest step in this direction it is difficult or impossible to make definitive statements about market structure based on empirical observations however we use the concept of granger causality to test for the existence of price leadership between u s and canadian wheat prices significant price leadership is consistent with oligopolistic market behavior

statistical dynamics and economics abstract it is shown in this paper how complex economic dynamics can be characterized using the statistical or distributional theory of dynamical systems the basic concepts of the latter are summarized then applications to supply and demand adjustments in competitive markets aggregate business fluctuations and economic growth in the very long run are briefly reviewed

efficient estimation of hedonic inverse input demand systems this article is concerned with efficient estimation of characteristics demand we derive and estimate an inverse input demand system for quality characteristics by using 172 946 observations over 881 trading days in the icelandic fish auctions an improved estimation method based on an expanded random coefficient model is suggested as an alternative to the currently used two stage method of brown and rosen the estimates demonstrate the improved efficiency of the suggested method a number of empirical results emerge including a general increase in the demand for quality the purpose of hedonic price analysis is to determine how the price of a unit of a commodity varies with its characteristics that is to estimate the hedonic price function some recent examples of the estimation of hedonic price functions are nerlove combris lecocq and visser and mcconnell and strand however theory predicts that shifts in supply or demand affect the implicit price relationships between the overall price of the good and its individual characteristics and so we need to estimate the underlying demand and supply functions for the characteristics rosen developed a two stage method for analyzing hedonic markets in the first stage of this method the hedonic price function is estimated and in the second stage a system of demand and supply functions for characteristics is estimated using the shadow prices of the characteristics from the first stage as variables brown and rosen showed that this procedure could yield estimates of demand and supply functions that are mere transformations of the coefficients in the hedonic function they suggested the currently used two stage method using data from multiple markets this method utilizes the within market variation to iden

economics and elections revisited the economics and elections connection has been heavily investigated although mostly through single country studies the first comparative survey based research on economic voting by lewis beck

state trading enterprises in a differentiated product environment the case of global malting barley markets this study tested if the exclusive procuring and pricing policies of two state trading enterprises stes in international malting barley markets could be used in a strategic trade context the research provided four key findings first the global malting barley market operated in a quantity setting oligopolistic structure during the study years second both stes and other exporting countries were in cournot competition and thus made available strategic trade possibilities third initial commodity payments were too high to generate a rent shifting outcome fourth product differentiation was confirmed which may have dampened the desire ability of stes to pursue a rent shifting objective

the value of the initial payment of the canadian wheat board as a signaling device this paper analyzes the role of the initial payment used by the canadian wheat board cwb in the determination of export prices and sales under the assumption that the cwb has better information about realized yields in canada than its us competitor in the separating equilibrium of the game the initial payment of the cwb is larger than the initial payment under complete information there exists an incentive under incomplete information to send a signal that realized yields are greater than expected to induce a reduction in the sales of foreign competitors we illustrate the strategic value of the initial payment for canadian wheat producers using a numerical simulation

ergodic fluctuations in deterministic economic models abstract nonperiodic business fluctuations are shown to exist with positive measure generically and to behave like stationary stochastic processes in the standard dynamic macro model the implication is that so called chaotic fluctuations are probable for random initial conditions in a large class of recursive economies

opportunistic political cycles test in a young democracy setting this paper tests the theory of opportunistic cycles in a decade old democracy russia finds strong evidence of cycles and provides an explanation for why previous literature often found weaker evidence using regional monthly panel data we find that 1 the budget cycle is sizable and short lived public spending shifts toward direct monetary transfers to voters 2 the magnitude of the cycle decreases with democracy government transparency media freedom voter awareness and over time and 3 preelectoral manipulation increases incumbents chances for reelection the short length of the cycle explains underestimation of its size by previous literature because of low frequency data used in previous studies

who delivers partisan clients in the argentine electoral market why do some parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain such differences by focusing on political parties access to resources supply side and voters dependence on fiscal largesse demand side we show how these differences affect the patron s choice of public sector wages and employment we use subnational level data to show different electoral returns from patronage for the two major political coalitions in argentina peronism and the ucr alianza and their effect on preferences over public sector wages and employment w hy do some political parties fail to benefit from patronage in pork ridden political systems this article analyzes the interaction between patronage and partisanship to explain why some incumbents are more likely to benefit from pork politics than others we explain returns to patronage by highlighting differences in the political parties access to resources supply side and the voter s dependence on public sector jobs demand side we propose that just as political parties cater their policies to particular groups of voters they pursue different strategies when allocating pork in exchange for support on the supply side we highlight the importance of partisan biases in the fiscal and electoral institutions that regulate the access and distribution of public resources on the demand side we show that patronage is a distributive mechanism that provides different returns to voters with different skills and labor market expectations

the origin of predictable dynamic behavior abstract nonlinear dynamic theory implies optimal decisions often behave like random chaos such random target motion is impossible for imperfect agents to follow without error however they can still gradually approach the optimal target if and only if they partially adjust toward its perceived location so as to induce their behavior to converge to an equilibrium reducing dynamic errors through partial adjustment thereby induces a stable regularity in behavior that otherwise may never evolve this result agrees with the stability properties observed in experimental markets including cobweb auction and asset markets whose dynamics before reaching equilibrium exhibit adaptive rather than rational expectations