what is capital economists and sociologists have changed its meaning should it be changed back this is a pre copyedited author produced pdf of an article accepted for publication in cambridge journal of economics following peer review the version of record geoffrey h hodgson what is capital economists and sociologists have changed its meaning should it be changed back cambridge journal of economics vol 38 5 1063 86 september 2014 is available online at http dx doi org 10 1093 cje beu013

on the optimal design of place based policies a structural evaluation of eu regional transfers we quantify general equilibrium effects of place based policies in a multi region framework with population mobility trade and agglomeration economies using detailed data on eu transfers we infer the local effects of different transfer types on productivity income and transportation cost based on these estimates and the general equilibrium model we derive the spatial distribution of economic activity and the resulting aggregate welfare effects if i no transfers were paid and taxes set to zero ii transfers were distributed uniformly iii transfers were welfare optimally distributed characterizing the optimal distributions we reveal complementarities between transfer types and between transfers and local endowments

the sustainable borders of the state economic crises have historically set the stage for the reconfiguration of the economic borders of the state current concerns focus on debt and associated intergenerational issues such as pensions infrastructure and the environment the sustainable state is designed to put in place a framework for integrating these intergenerational issues alongside the traditional focus on macroeconomic policy static market failures and transfers the building blocks include the accounting framework and in particular a national balance sheet setting out assets and liabilities and providing for capital maintenance over time to support these assets and to provide for sufficient investment the sustainable state requires an appropriate level of savings and institutions to translate these savings into investments two components are the deployment of regulatory asset bases to underpin long term sunk and fixed costs given the time inconsistency problem in government s commitments and the development of financial intermediaries such as an infrastructure bank copyright 2011 oxford university press

degradation of environmental capital and national accounting procedures abstract the capital theoretic approach to the environment as a wastable stock a stock with a flow of abatement services is explored in a simple ricardo like model involving wheat production and pollution production as an essential by product we then turn to how the national accounts are implicit in growth or capital theory models and how formulae emerge for accounting for the wasting of environmental capital airsheds and watersheds from excessive use

financial integration capital mobility and income convergence recent studies have found that capital moves uphill from poor to rich countries and brings little or no growth dividend when it does flow into poor economies we show that europe does not conform to this paradigm in the european experience of financial integration capital has flown from rich to poor countries and such inflows have been associated with significant acceleration of income convergence analysing broader samples of countries we find that downhill capital flows tend to be observed above certain thresholds in institutional quality and financial integration but europe remains different even when allowing for such threshold effects and its experience is similar to that of interstate flows within the united states our findings are consistent with the notion that financial diversification reduces countries incentives to save in order to self insure against specific shocks abdul abiad daniel leigh and ashoka mody

depressing dependence transfers and economic growth in the german states 1975 2005 abstractdepressing dependence transfers and economic growth in the german states 1975 2005 regional studies most countries pay substantial intergovernmental transfers to poor regions with the aim of achieving regional convergence consequently transfers should have a positive effect on economic growth however it is equally possible that transfers perpetuate underdevelopment this paper studies empirically the effect of intergovernmental transfers on economic growth with a panel of west german states over the period 1975 2005 the findings suggest that transfers do not foster economic growth presumably because the recipients use them to subsidize declining industries

do institutions matter for regional development rodriguez pose a do institutions matter for regional development regional studies this paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies it is found that while institutions are crucial for economic development generating an institution based regional development strategy is likely to be undermined by the lack of definition of what are efficient institutions problems related to the measurement of institutions to their space and time variability to the difficulties in establishing the right mix of formal and informal institutions and to the endogeneity between institutions and economic development make one size fits all approaches to operationalizing institutions difficult the paper posits that in order to overcome these problems it is crucial to distinguish between the institutional environment and institutional arrangements that is to target not the institutions which shape the unique character of any territ

us demilitarization and global warming an empirical investigation of the environmental peace dividend abstract in the paper input output methods are used to generate ballpark empirical estimates of the implications for global warming of the projected demilitarization of the us federal budget the impact is found to be qualitatively ambiguous and highly sensitive to the manner in which the funds saved are distributed the effect is adverse where the budgetary savings are used to fund economy wide cuts in personal taxation and or deficit reduction in other cases the effect may be neutral or beneficial

optimal urban population size national vs local economic efficiency this paper explores whether the population size of the seoul metropolitan area sma in korea is efficient in terms of the national economy to undertake this analysis a recursively dynamic interregional computable general equilibrium icge model with a population module is developed in this model the explicit costs and benefits of population growth are estimated by using the industrial value added and consumer price inflation functions for each region the counter factual analysis shows that national population decentralisation away from the sma is desirable for korea s economic growth korea s gdp is estimated to be maximised when the sma s national population share is at 39 per cent in the short term and 35 per cent in the long term however the sma government is likely to have incentive to maintain its population at around 40 per cent of the national population where per capita income at the regional not national level is maximised

the nature and nurture of economic outcomes this paper uses data on adopted children to examine the relative importance of biology and environment in determining educational and labor market outcomes i employ three long term panel data sets which contain information on adopted children their adoptive parents and their biological parents in at least two of the three data sets the mechanism for assigning children to adoptive parents is fairly random and does not match children to adoptive parents based on health race or ability i find that adoptive parents education and income have a modest impact on child test scores but a large impact on college attendance marital status and earnings in contrast with existing work on iq scores i do not find that the influence of adoptive parents declines with child age this abstract was borrowed from another version of this item

a tale of an unwanted outcome transfers and local endowments of trust and cooperation abstract transfers can do good however they can also result in massive failures this paper presents a model that highlights the ambiguous nature of the impact of transfers on local endowments of social capital it then describes an empirical investigation that illustrates that the receipt of eu structural funds causes a deterioration of the endowments of trust and cooperation in the subsidized regions

going nuts the effect of eu structural funds on regional performance the european union eu provides grants to disadvantaged regions of member states to allow them to catch up with the eu average under the objective 1 scheme nuts2 regions with a per capita gdp level below 75 of the eu average qualify for structural funds transfers from the central eu budget this rule gives rise to a regression discontinuity design that exploits the discrete jump in the probability of eu transfer receipt at the 75 threshold for identification of causal effects of objective 1 treatment on outcome such as economic growth of eu regions we find positive per capita gdp growth effects of objective 1 transfers but no employment growth effects

does increasing women s schooling raise the schooling of the next generation the positive cross sectional relationship between the schooling of mothers and their children is substantially biased upward due to correlations between schooling and heritable ability as well as assortative mating an increase in the schooling of women would not have beneficial effects in terms of the schooling of children increased maternal schooling leads to reduced home time for mothers anticipating the consequences of investing in women s schooling requires attention to the role that schooling plays in the marriage market as well as to opportunities in the labor market for women

second order sustainability conditions for the development of sustainable innovations in a dynamic environment abstract in particular radical innovations can be important means to achieving improved sustainability due to the existence of path dependency and lock in however the transition from one technological trajectory to another more sustainable one is often impeded by significant barriers fortunately these barriers are by their nature subject to substantial changes in time so it makes sense to carefully distinguish between periods of stability showing high barriers in which the given trajectory can hardly be left and periods of instability characterized by low barriers where a new trajectory can be reached more easily the latter distinction matters since sustainable innovations often rely on governmental regulation and the economic burden arising from this regulation will be much lower in periods of instability moreover due to the complexity and dynamics of change in their respective environments innovations are generally associated with fundamental uncertainty such that it becomes impossible to predict the degree of sustainability yielded by specific innovations in the longer run under these circumstances it is essential to facilitate the change between trajectories and to allow for the possibility to select between a variety of alternative trajectories within a process of trial and error sustainability as viewed from this evolutionary perspective is therefore better understood as the general capability to adapt that is to readily change from less to more sustainable technological trajectories since the latter kind of sustainability determines the conditions under which the former kind i e sustainability related to a specific technology can be achieved the two kinds are respectively called second order and first order sustainability finally a series of determinants and corresponding indicators from the techno economic political and socio cultural sphere is identified which after proper measurement and weighting allow for making an assessment whether and when the incumbent industry is sufficiently destabilized and the political system rendered sufficiently favorable to the new more sustainable technology such that a transition to the preferred trajectory is possible without too much effort

globalization and competitive strategies in european vulnerable regions affuso a capello r and fratesi u globalization and competitive strategies in european vulnerable regions regional studies this paper highlights the role played by structural economic features and industrial competitive strategies in the performance of a group of european regions defined as vulnerable because of their specialization in industries particularly exposed to international trade different growth patterns emerge among them the most successful regions are those with a strong presence of high value added functions of best performing vulnerable sectors but also with high structural funds expenditure on human resources moreover among the industrial strategies analysed it is found that the only winning strategy explaining higher productivity gains is industrial reconversion at the expense of employment growth affuso a capello r et fratesi u la mondialisation et les strategies competitives des regions europeennes vulnerables regional studies cet article cherche a souligner le rol

linking economic and ecological models for a marine ecosystem increasingly economists and ecologists have begun to recognize the value to public policy of combining information and results from each discipline into multidisciplinary studies here we present a methodological approach that links economic and ecological analyses we develop an economic ecological model by merging an input output model of a coastal economy with a model of a marine food web we describe distinct linear system sub models of the economy and the ecosystem and we develop a method for linking the two our method extends the work of earlier researchers by incorporating an ecosystem matrix into resource multipliers and by showing how these multipliers may be calculated we present a numerical example for the new england region using coastal economic and marine ecological data from the region for a restricted set of industry sectors and food web trophic levels we calculate resource multipliers for the example and we simulate the economic impacts of changes in primary production in the ecosystem on final demands for fishery products the results illustrate the effects of incorporating the impacts of habitat destruction and ecosystem structure on resource multipliers our approach can be extended to incorporate the full range of sectors in the economy and trophic levels in a linked ecosystem 2003 elsevier b v all rights reserved

accounting for the value of ecosystem services abstract a value of ecosystem services ves may be calculated by multiplying a set of ecosystem services by a set of corresponding shadow prices this paper examines the role of the ves concept in measuring trends in human well being under conventional arguments from applied welfare economics standard measures of market consumption may be extended to include the value of direct environmental services which affect welfare in ways that are not mediated by the consumption of purchased goods the ves concept does not capture values such as ecological sustainability and distributional fairness that are not reducible to individual welfare and its operationalization is constrained by the well known limitations of nonmarket valuation methods nonetheless attempts to calculate the value of environmental services can provide insights into the tradeoffs between market activity and environmental quality that are implicit in the process of economic growth such efforts can promote informed debate concerning the achievement of sustainable development

a malmquist based approach to change in local economic well being murias p novello s and martinez roget f a malmquist based approach to change in local economic well being regional studies the focus on the multifaceted nature of well being has increased substantially in recent years this paper employs data envelopment analysis dea combined with the malmquist index to examine the temporal change in the economic well being of spanish provinces over the ten year period between 1996 and 2006 this method not only allows the aggregation of multiple indicators and the estimation of well being shifts over time but also shows the sources of variation in local economic well being the results seem to suggest that whilst economic well being has improved in the great majority of provinces this advancement stems largely from a more favourable environment than from the specific capacity of each province to reduce its relative distance from key benchmarks

complementing emu rethinking cohesion policy under emu the less competitive regions of the eu usually assumed to be peripheral have been widely expected to lose ground yet it is the core of the eu that so far has appeared to have suffered from the advent of the euro this paper looks at the processes behind regional divergence in the eu and presents evidence on recent and prospective trends as emu is consolidated bearing in mind that the imminent enlargement of the eu will radically change the political economy of the eu s efforts to assure cohesion policy issues are then discussed looking forward to the next renegotiation of the structural funds it is argued that difficult decisions have to be taken about the extent and character of eu policy the option of an open method of coordination for cohesion policy is put forward as a means of resolving some of the hard choices

optimal dutch disease growth models of the dutch disease such as those of krugman 1987 matsuyama 1992 sachs and warner 1995 and gylfason et al 1999 explain why resource abundance may reduce growth however the literature also raises a new question if the use of resource wealth hurts productivity growth how should such wealth be optimally managed this question forms the topic of the present paper in which we extend the growth literature on the dutch disease from a positive to a normative setting we show that the assumptions in the previous literature imply that the optimal share of national wealth consumed in each period needs to be adjusted down however some dutch disease is always optimal thus lower growth in resource abundant countries may not be a problem in itself but may be part of an optimal growth path the optimal spending path of the resource wealth may be increasing or decreasing over time and we discuss why this is the case

the public sector and convergence with spatial interdependence empirical evidence from spain abstractwe propose a framework to analyse convergence between regions incorporating the public sector and technological knowledge spillovers in the context of a neoclassical growth model second we apply novel estimation methods pertaining to the spatial econometrics literature introducing a spatial durbin panel data model based on instrumental variables and maximum likelihood estimation our model makes it possible to analyse in terms of convergence the results obtained in spanish regions with the policies implemented during the period 1980 2011 the results support the idea that education and fiscal policies have a positive effect on regional development and cohesion therefore we can conclude that it is possible to obtain better results for regional convergence with higher rates of public investment in education and tax revenues we also obtain interesting results that confirm the existence of spillover effects in economic growth and public policies identifying their magnitude and significance

determinants of regional economic growth by quantile crespo cuaresma j foster n and stehrer r determinants of regional economic growth by quantile regional studies the robustness of growth determinants across european union regions is analysed using quantile regression using bayesian model averaging bma on the class of quantile regression models it is proposed that the set of relevant covariates is assessed allowing for different effects across growth quantiles the results indicate that the robust growth determinants differ across quantiles the set of robust variables includes physical investment when taking country fixed effects into account and skill endowment and initial gross domestic product per capita when not even when a variable is found to be robust across quantiles its estimated impact on growth is often found to vary across quantiles crespo cuaresma j foster n et stehrer r les determinants de la croissance economique par quantile regional studies a partir d une regression par quantile on analyse la solidite des determinant

undermining the principle of concentration european union regional policy and the socio economic disadvantage of european regions crescenzi r undermining the principle of concentration european union regional policy and the socio economic disadvantage of european regions regional studies this paper sets out to analyse the regional policy of the european union by assessing whether the actual distribution of funds to the regions undermines the principle of territorial concentration the empirical analysis shows that due to either political equilibriums or inaccurate assumptions about the most cost effective allocation of the funds the sources of structural disadvantage are more spatially concentrated than the funds devoted to compensating this disadvantage and reveals a weak association between socio economic disadvantage and european union funding corrections in allocation mechanisms are recommended in order to increase fund concentration and earmark resources more adequately to disadvantaged regions crescenzi r saper le principe de la concentration la politique regionale de l union europeenne et le desavantage socio econom

on the intergenerational allocation of natural resources it is known hartwick and others that under standard assumptions a society that invests in reproducible capital the competitive rents on its current extraction of exhaustible resources will enjoy a consumption stream constant in time it is shown here that this result can be interpreted as saying that an appropriately defined stock of capital including the initial endowment of resources is being maintained intact and that consumption can be interpreted as the interest on that patrimony this seems like a useful rule of thumb for policy

evaluating the impact of the structural funds on objective 1 regions an exploratory discussion martin r and tyler p 2006 evaluating the impact of the structural funds on objective 1 regions an exploratory discussion regional studies 40 201 210 evaluation evidence on the impact of the structural funds on employment in objective 1 regions remains elusive this paper seeks to make a contribution to this task by evaluating the impact of european union regional policy on cumulative job creation in the least prosperous objective 1 regions at the nuts 2 level it adopts an evaluation methodology pioneered originally by moore and rhodes in 1973 in the uk while tentative it estimates that the cumulative effect of european union cohesion policy is around 1 million jobs as at 2002 which is a significant contribution despite the considerable methodological and measurement problems this paper aims to encourage further research to be undertaken in this important area objective 1 regions impact employment counterfactual determination martin r et tyler p 2006 evaluer l impact des fonds structu

neoclassical natural capital theory and weak indicators for sustainability we appraise neoclassical theory of growth with natural capital for the estimation of indicators for sustainability relationships between four theoretically distinct measures are clarified hicksian change in capital stock value the hartwick net savings which excludes capital gains sustainable national income sni and environmentally adjusted net national product gnnp an overlapping generations olg general equilibrium model with depletable natural capital demonstrates the significance of model parameters determining technical feasibility and intertemporal distribution of consumption irremediable uncertainties in model specification and empirical measurement mean that the neoclassical theory is not robust for defining or estimating indicators for sustainability

valuing fisheries depreciation in natural resource accounting the pelagic fisheries in northeast peninsular malaysia in this paper an approach based onthe net present value method is used to account forthe changes in the value of fisheries resources changes in the value of fisheries resources can occurbetween successive years catch as well as betweencurrent and optimal levels of catch these changesneed to be accounted for in the national accountingsystem to reflect the true net national income thatis sustainable the approach outlined in this paper isdesirable as it allows the estimation of thedepreciation value of fisheries resource with limitedbiological information the application of theapproach to the pelagic fisheries in northeastpeninsular malaysia nepm showed that the resourcedepreciated in value over most years from 1982 to1993 these depreciations correspond to increasedfishing effort in addition pelagic catches in nepmfrom 1982 to 1993 were lower than the optimal levelsof catch due to overfishing thus policies aimed atreducing fishing effort can provide improvement inboth the potentially higher capital values of thefishery resource and the earning potentials of thefishing industry in nepm

intertemporal equity and efficient allocation of resources abstract competitive paths which are efficient are shown to satisfy a terminal cost minimization condition thereby providing a continuous time counterpart to the discrete time result due to malinvaud using this result competitive paths which are equitable and efficient are shown to satisfy hartwick s investment rule which states that the value of net investment is zero at each date our result indicates that hartwick s rule can help to signal inefficiency of competitive equitable paths journal of economic literature classification numbers c61 d90 o41

labour productivity in spain 1977 2002 this study examines the evolution of labour productivity across spanish regions during the period from 1977 to 2002 applying the kernel technique we estimate the effects of the transition process on labour productivity and its main sources we find that spanish regions experienced a major convergence process in labour productivity mostly driven by human capital in the 1977 1993 period conversely the dynamics of investment in physical capital appear to be neutral with respect to the transition dynamics of labour productivity finally from 1995 to 2002 no dynamic processes seemed to have taken place spanish regions exhibit a persistent relative position with established convergence clubs the human capital effect is less important and the investment in physical capital seems not to have a triggering effect on labour productivity growth

environmental issues and economic decisions in developing countries abstract this paper explains the key role of environmental economics in incorporating environmental concerns into decision making and in facilitating the more efficient management of natural resources as a step toward sustainable development it reviews concepts and techniques for valuation of environmental impacts for use in conventional cost benefits analysis as well as key related aspects including environmental impacts of economywide policies multicriteria analysis risk and uncertainty and discount rate issues several developing country case studies are summarized which cover a range of practical valuation methods the evidence presented suggests that the valuation techniques for determining use values may be applied successfully in appropriate cases but examples involving nonuse values are rare the use of multiobjective desicion methods also needs to be explored where economic valuation is not feasible

international trade and the sustainability footprint a practical criterion for its assessment a simple and minimal criterion for sustainability is that the value of natural capital plus manufactured capital be not decreasing on the basis of any individual country or region the above simple comparison may be misleading as it does not take account of the production of goods for consumption in other countries regions via international trade in other terms the full environmental footprint of a country may not be properly assessed a method of calculating a weak sustainability criterion has been established for both a closed economy approach and an open economy approach there are significant differences between the open and closed economies measures for several regions particularly the middle east overall global sustainability on this criterion has been positive and increasing using a difference equation approach a further analysis has been made of the average proportional rate of change of global sustainability between 1980 and 1990 and its various regional and structural components have been determined these indicate that most of global sustainability growth can be attributed to western europe other asia and japan particularly through high savings ratios the usa on the other hand has made a very small net contribution to the growth in global sustainability

discounting of long term costs what would future generations prefer us to do decisions with intergenerational consequences may leave future generations worse off i e not be pareto optimal if costs and benefits are not discounted correctly we point out that this happens if the conventional social discount rate is applied to intergenerational costs with that rate the justification of intergenerational costs benefits of a project are invested and the proceeds can cover future costs leads to an inconsistency over the long term eventually the supposed benefits of any project become larger than the entire gnp the conventional approach commits an error by treating the time preference component of the discount rate as if it represented creation of wealth while it really involves only redistribution the time horizon of the redistribution is limited by the duration of market transactions especially loans thus we recommend a two step discounting procedure with the conventional social discount rate for the short term about 30 years and the growth rate of the economy for the long term data for gnp per capita growth in the us the uk france germany japan and the soviet union since the industrial revolution combined with data for net economic welfare per capita suggest an intergenerational discount rate in the range of 1 to 2 for practical application the rate at which costs and benefits will grow over time is just as important as the discount rate only the difference between these two rates matters for many environmental costs these rates may be close to each other during the next few generations this implies that some of the uncertainty in the prediction of rates cancels and one can treat the problem as if the effective rate were close to zero the consequence for costs such as global warming or nuclear power can be very significant the valuation can increase by more than an order of magnitude compared to values based on conventional discounting

the endogeneity between language and earnings international analyses this study is concerned with the determinants of dominant language fluency its effects on earnings and its endogeneity with earnings among immigrants dominant language fluency is hypothesized to

regional tax coordination and foreign direct investment this paper analyses the effects of a regionally coordinated profit tax or location subsidy in a model with three active countries one of which is not part of the union and a globally mobile firm we show that regional coordination can lead to two types of welfare gain first for investments that would take place in the union in the absence of coordination a coordinated tax increase can transfer location rents from the firm to the union second by internalising all of the union s benefits from foreign direct investment a coordinated tax reduction can attract more welfare enhancing investment than when member states act in isolation depending on which motive dominates tax levels may thus rise or fall under regional coordination

externality regulation and the monopoly firm abstract differences in strategic assumptions lead to predictable variations in the conclusions one may draw the formal theory of monopoly power and externalities reflects this variability in assumptions and conclusions this paper contains a unified model of monopoly power marketable product output and externality abatement

estimation of the efficiency of structural funds a parametric and nonparametric approach this article seeks to perform an analysis of the efficiency of the application of the structural funds in the regions classified as objective 1 over the period 2000 to 2006 applying the techniques known as data envelopment analysis dea and stochastic frontier in the first place we are going to identify which are the most efficient regions finally we will analyse the extent to which certain factors have repercussions on the efficiency such as country geographical location and contribution of agriculture of gross domestic product gdp and the result indicates that some of these variables have significantly influences of technical efficiency

the sustainable residential water use sustainability efficiency and social equity the european experience abstract the present paper traces the operational conditions governing the sustainable use of water in cities towards this objective the paper first proposes a new comprehensive definition for the sustainable use of water next efficiency in use is proposed as a fundamental instrument in achieving sustainability in spite of prevailing opinions maintaining that sustainability and efficiency aim at different and probably conflicting objectives in this light several pricing modes that inhibit efficiency are examined and their effects are defined in this context egalitarian pricing which nevertheless prevents efficiency is also systematically evaluated until it is ascertained that it does not serve social equity in the use of water in the long run all the more the present paper advocates that certain egalitarian pricing systems such as the increasing block rates most prevalent at this time may have the reverse effect than the one intended and hence in the long run impose negative impacts on the welfare of low incomes as a result full cost prices are proposed as a necessary instrument for the sustainable use of water an instrument that promotes social equity in the long run the assumptions of the study are examined in a comparative analysis of representative european pricing systems and urban management modes

public capital and total factor productivity new evidence from the italian regions 1970 98 destefanis s and sena v 2005 public capital and total factor productivity new evidence from the italian regions 1970 98 regional studies 39 603 618 this paper analyses the relationship between industrial total factor productivity and public capital across the 20 italian administrative regions it adds upon the existing literature in a number of ways it analyses a longer period 1970 98 it allows for the role of human capital accumulation it tests for the existence of a long run relationship between total factor productivity and public capital through previously suggested panel techniques and for weak exogeneity of public capital and it assesses the significance of public capital within a non parametric set up based on the free disposal hull the results confirm that public capital has a significant impact on the evolution of total factor productivity particularly in the southern regions this impact is mainly ascribed to the core infrastructures road and airports harbours railroads w

genuine savings and sustainability genuine savings gs has emerged as the leading economic indicator of sustainable economic development at the country level it derives from the literatures on weak sustainability wealth accounting and national income accounting we discuss the theoretical underpinnings of gs focusing on the relationship between changes in a nation s extended capital stock and the future path of consumption the indicator has entered widespread use propelled by the world bank s publications despite its varying performance as a predictor for future consumption notwithstanding the extensive body of literature reviewed promising future research avenues are identified

economic and mechanical models of intergenerational transmission the author critically examines gary beckers attempt to integrate the theory of income distribution intragenerational differences with the theory of mobility intergenerational differences in an economic model of the family he assesses beckers claims of distinctiveness integration explanatory power and surprise and arrives at a rather skeptical view of the contribution that the core of microeconomics has made to this study of the family a reply by becker is included pp 514 8 excerpt

inequality and convergence in europe s regions reconsidering european regional policies europe s regions income disparities and regional policies in this paper we take a critical look at current european regional policies first we document the motivation for such policies that is the large income disparities across the regions of the eu15 large disparities are certainly present second we illustrate the various instruments adopted and discuss their underpinnings in established economic theories next we look at available data searching for three kinds of evidence 1 if disparities are either growing or decreasing we conclude they are neither 2 which are the major factors explaining such disparities and in particular if they are the factors predicted by the economic models adopted by the commission to justify current policies we conclude this is most certainly not the case 3 if there are clear signs that eu policies as opposed to other social and economic factors are actually reducing such disparities we cannot find any clear sign of such desired impact our conclusion is that regional and structural policies serve mostly a redistributional purpose motivated by the nature of the political equilibria upon which the european union is built they have little relationship with fostering economic growth this casts a serious doubt on their social value and furthermore strongly questions extending such policies to future members of the european union a successful eu enlargement in our view calls for an immediate and drastic revision of regional economic policies michele boldrin and fabio canova

aggregate estimate of environmental degradation for zimbabwe does sustainable national income ensure sustainability abstract standard measures of economic growth do not adequately reflect changes in aggregate welfare over time sustainable national income is therefore defined as net national product with adjustments for the degradation of renewable and non renewable capital productivity loss rather than replacement cost is the most theoretically correct way to value resource depletion modified net product is estimated for the agriculture and forestry sectors of zimbabwe by valuing the loss of forest stock and soil erosion the results show that traditional measures overstate the value of the agricultural sector s product by approximately 10 in 1989 it is argued that indicators of sustainable national income do not ensure sustainable development as with all macroeconomic indicators they do not account for distributional and equity issues which are at the crux of sustainable development nor do they point to mechanisms that would ensure sustainable resource management rising sustainable income over time is therefore a necessary but not sufficient condition for the achievement of sustainable development

sustainable farm income in the presence of soil erosion an agricultural hartwick rule soil erosion is a physical and economic problem of natural capital degradation even along an intertemporally efficient trajectory one can have in a loss of soil fertility and a continuous decline of agricultural net revenue moreover soil erosion is a major source of surface water pollution in rural areas erosion control is thus a challenge for sustainable resource management and internalizing external effects to sustain the level of farm income an agricultural hartwick rule is proposed which addresses both on farm and off farm effects of soil erosion first it requires the investment of the soil rents into alternative capital second additional measures are required to comply with an ambient quality target a charge subsidy scheme proves the most adequate from a perspective of cost effectiveness and sustainability if effluent charge revenues are earmarked to subsidize cropland retirement at the watershed scale in combination with the investment of soil rents this enables to maintain the level of farm income constant over time while respecting the ambient quality target altogether this fulfills the requirements of efficiency and sustainability 2003 elsevier science b v all rights reserved

wealth from optimal health abstract recently much research has been devoted to the question of how the conventional net national product measure should be augmented so as to cover changes in the stocks of natural resources this paper investigates the treatment of health capital and the risk of doomsday caused by pollution in such welfare measures our problem is not a standard optimal control problem because the survival probability depends on state variables we show how to handle this complication the resulting welfare measure is contrasted with the conventional net national product measure finally we address the matter of how to design a subsidy on health investment such that a market economy provides the optimal level of health

a model of industrial pollution in a stochastic environment abstract standard models of pollution abatement assume that pollution accumulation occurs in a deterministic pattern as a by product of the production process governmental intervention often occurs in the form of taxation or mandatory abatement controls to reduce inefficiency caused by incomplete markets in this paper we assume that the accumulation effect of pollution may be stochastic due for instance to the random absorption capacity of the ecosystem furthermore we assume that the level of pollution may vary with input use as well as output level we proceed to analyze properties of a policy for efficient social management of competitive firms which generate pollution

human capital spillovers in families do parents learn from or lean on their children i model how children s acquisition of a given form of human capital incentivizes adults in their household to either learn from them if children can teach the skill to adults adults cost of learning falls or lean on them if children s human capital substitutes for that of adults in household production adults benefit from learning falls using variation in compliance with an english immersion mandate in california schools i find that english instruction improved immigrant children s english proficiency but discouraged adults living with them from acquiring the language whether family members learn or lean affects the externalities associated with education policies

on the interpretation of green nnp measures as cost benefit rules in this paper we consider the possibility of using green welfare change measures as the basis for cost benefit analysis of new projects such green welfare change measures look very similar to what one would expect a cost benefit analysis of the entire economy to look like it is shown that although green welfare measures contain the shadow prices needed in the evaluation of a small new project one must account for changes in these prices

intertemporal equity and hartwick s rule in an exhaustible resource model in a standard exhaustible resource model it is known that if along a competitive path investment in the augmentable capital good equals the rents on the exhaustible resource known as hartwick s rule then the path is equitable in the sense that the consumption level is constant over time in this paper we show the converse of this result if a competitive path is equitable then it must satisfy hartwick s rule

intergenerational trade longevity and economic growth we develop an overlapping generations model of endogenous growth in which human capital is the engine of growth and the generations are linked through material and emotional interdependencies within the family parents invest in their children to achieve both old age support care and emotional gratification and material support from children is determined through self enforcing implicit contracts we show that optimal intergenerational trade can then lead to maximization of growth opportunities our model produces a theory of the demographic transition linking longevity fertility and economic growth we also show that while population aging may raise the growth rate an increase in young age longevity is likely to produce a greater increase in the growth rate and a reduction in the fertility rate in a growth equilibrium these predictions and the model s implications concerning the behavior of private savings during the takeoff period appear consistent with empirical evidence

renewable resources and economic sustainability a dynamic analysis with heterogeneous time preferences abstract in recent years there has been increasing interest in the study of economic sustainability and its relationship with natural resources this paper attempts to shed some light on the issue by taking into account the individual variations in time preferences for consumption and resource amenity we characterize the long run steady state analyze its asymptotic stability and explore the transational dynamics from any initial state the welfare implications of the optimal path are also discussed

intergenerational transmission of human capital is it a one way street studies on the intergenerational transmission of human capital usually assume a one way spillover from parents to children however children may also affect their parents human capital using exogenous variation in education arising from a swedish compulsory schooling reform in the 1950s and 1960s we address this question by studying the causal effect of children s schooling on their parents longevity we first replicate previous findings of a positive and significant cross sectional relationship between children s education and their parents longevity our instrumental variables estimates are not statistically different from zero however they hide substantial heterogeneity by the gender of the child and the parent female schooling is found to affect longevity of fathers and especially those from low socio economic background taken together our results point to the importance of daughters schooling for parental health and to the importance of considering heterogeneous impacts

convergence in the trends and cycles of euro zone income multivariate unobserved components structural time series models are fitted to annual post war observations on real income per capita in countries in the euro zone the aim is to establish stylized facts about convergence as it relates both to long run and short run movements a new model in which convergence components are combined with a common trend and similar cycles is proposed the convergence components are formulated as a second order error correction mechanism this ensures that the extracted components change smoothly thereby enabling them to be separated from transitory cycles copyright 2005 john wiley sons ltd

environmental equity and sustainability rejecting the kaldor hicks criteria abstract an implementable translation of environmental equity and sustainability is provided for use in benefit cost analysis as such the approach builds on the underlying economic structure of benefit cost analysis while trying to cause it to evolve in ways that take into account issues of greater concern to ecological economists environmental equity and sustainability are interpreted as imposing new decision criteria that require additional benefit cost tests based on actual compensation to identified sub groups of the population this rejects the pre world war ii compromise of economists regarding potential compensation embodied in the kaldor hicks criteria for environmental equity a project is proposed to pass a benefit cost test if the identified group either receives net benefits or is more than compensated for its losses for sustainability a project is proposed to pass a benefit cost test if the compensation is larger than the net value of the resource and the net value of the resource is reinvested

regional mobility in the european union regional mobility in the spatial distribution of per capita income in the european union is examined over the period 1977 to 1999 the methodology used to investigate this issue combines a series of measures taken from the literature devoted to the dynamic study of personal income distribution with a non parametric analysis the results show limited mobility in the distribution considered and a decline in mobility over time the empirical evidence presented indicates moreover that mobility patterns vary as a function of regional development levels additionally the analysis carried out investigates the role played in explaining intra distribution mobility by variables such as per capita income population density per capita expenditure in investment market potential and the share in total employment of agriculture advanced services and non market services

dutch disease and the mitigation effect of migration evidence from canadian provinces this article evaluates whether immigration can mitigate the dutch disease effects associated with booms in natural resource sectors we derive predicted changes in the size of the non tradable sector from a small general equilibrium model a la obstfeld rogoff using data for canadian provinces we find evidence that aggregate immigration mitigates the increase in the size of the non tradable sector in booming regions the mitigation effect is due mostly to interprovincial migration and temporary foreign workers there is no evidence of such an effect for permanent international immigration interprovincial migration also results in a spreading effect of dutch disease from booming to non booming provinces

between development and social policies the impact of european structural funds in objective 1 regions rodriguez pose a and fratesi u 2004 between development and social policies the impact of european structural funds in objective 1 regions reg studies 38 97 113 european regional support has grown in parallel with european integration the funds targeted at achieving greater economic and social cohesion and reducing disparities within the european union eu have more than doubled in relative terms since the end of the 1980s making development policies the second most important policy area in the eu the majority of the development funds have been earmarked for objective 1 regions i e regions where gdp per capita is below the 75 threshold of the eu average however the european development policies have come under increasing criticism based on two facts the lack of upward mobility of assisted regions and the absence of regional convergence this paper assesses using cross sectional and panel data analyses the failure so far of european development policies to fulfil their objective of de

national account of timber and forest environmental resources in sweden this paper outlines an extension of the national account of income from forest resources in sweden 1987 incorporating changes in timber inventories production of nonmarketed timber and nontimber goods and depletion or improvement in vital environmental stocks such as soil nutrients biodiversity and carbon sinks the total net value added provided by forest resources and forestry labour 1987 is estimated to 22 billions sek this is one third more than the contribution of forestry to ordinary gnp

deforestation and national accounting we construct a first best growing economy in which land is being switched continuously from use in forestry to an alternative use we find that implicitly for such activity to take place there must be no net loss to land owners this implies no deduction in the national accounts for deforestation with soil erosion on deforested land pigovian taxes must be levied to sustain a first best we also observe an optimal tax on households for their implicit use of forests as oxygenation sinks

should i stay or should i go an agent based setup for a trading and monetary union abstract the recent history of the european union eu suggests the importance of studying the conditions under which two or more countries can benefit from becoming part of a union of course this depends both on the economic characteristics of the involved countries and on the scope of the union i e the level of integration of markets regulations and institutional bodies this study tackles the topic from the angle of agent based computational economics by designing an open economy model inspired from the eu where countries can be part of a trade and monetary union we find that for similar countries it is always beneficial to be a member of a union although a lack of mobility frictions can cause a divergence between the two countries weakening the overall union performance even if countries have different productivity the performance of the union is in general better than the performance of the isolated countries the exception is when productivity gap and labor mobility are both high in this case a strong migration within the union can create economic distortions exacerbating the gap between the member states stronger fiscal integration helps reducing inequality between countries increasing the sustainability of the monetary union

does social capital matter for european regional growth abstract this paper analyzes the role of different elements of social capital in economic growth for a sample of 85 european regions during the period 1995 2008 despite the remarkable progress that social capital and european regional economic growth literatures have experienced over the last two decades initiatives combining the two are few and entirely yet to come for the post 1990s period recent improvements in data availability allow this gap in the literature to be closed since they enable the researcher to consider the traditionally disregarded eastern and central european ece regions this is particularly interesting as they are all transition economies that recently joined the european union with relatively low levels of social capital on the methodological side we follow the bayesian paradigm which enables us to make direct inferences on the parameters to be estimated and deal with parameter uncertainty leading to a deeper understanding of the relationships being investigated in particular we analyze three indicators of social capital namely social trust associational activities and social norms results suggest that the two former might have some implications for regional growth while social norms are a weaker predictor for growth

natural resources national accounting and economic depreciation abstract the current value hamiltonian in an aggregate optimal growth problem with heterogeneous capital stocks including exhaustible renewable and environmental stocks is the nnp function routine substitutions reveal that the using up of natural resource stocks is representable as easy to interpret economic depreciation magnitudes we obtain true nnp inclusive of natural resource stock diminution implications for actual national accounting practices are also discussed

the capital gains from trade are not enough evidence from the environmental accounts of venezuela and mexico abstract in principle a country cannot endure negative genuine savings for long periods of time without experiencing declining consumption nevertheless theoreticians envisage two alternatives to explain how an exporter of non renewable natural resources could experience permanent negative genuine savings and still ensure sustainability the first one alleges that the capital gains arising from the expected improvement in the terms of trade would suffice to compensate for the negative savings of the resource exporter the second alternative points at technological change as a way to avoid economic collapse this paper uses the data of venezuela and mexico to empirically test the first of these two hypotheses the results presented here prove that the terms of trade do not suffice to compensate the depletion of oil reserves in these two open economies

capital gains and net national product in open economies it is shown within a given framework that with the world economy following an egalitarian path the aggregate capital gains being positive is equivalent to the interest rate tending to decrease this result is of importance for the concept of net national product in open economies in particular with positive aggregate capital gains an open economy cannot sustain consuming the return on its capital stocks since some part of the return must be used to augment the country s national wealth it is established that a country s share of world wide sustainable consumption equals its share of worldwide wealth

quality of life and economic convergence across spanish regions 1980 2001 marchante a j and ortega b 2006 quality of life and economic convergence across spanish regions 1980 2001 regional studies 40 471 483 evaluations of regional welfare conventionally rely on gross value added gva per capita as an indicator of living standards this paper attempts to readdress the regional welfare issue by using alternative composite indicators in the context of the united nations development programme undp human development indices evidence is presented regarding to what extent such alternative measures of living standards are converging with this aim a database for the spanish regions nuts ii was constructed for 1980 2001 and an augmented version of the human development index ahdi was estimated incorporating sub indices of health education and the resources required for a decent standard of living including an indicator of social exclusion the regional convergence of three per capita income measures and the raw data of seven indicators of quality of life were also

centralized fiscal spending by supranational unions we study fiscal spending by supranational unions where participation is voluntary and countries bargain over contributions to and the allocation of a central budget since decisions are made by unanimity bargaining power over the allocation becomes a function of contributions which generically causes inefficiency in the presence of income asymmetry between member nations this link between the budget allocation and contributions explains patterns of inefficient spending in the eu e g why resources are diverted to low productivity projects in high income countries the option of veto creates a trade off between efficiency on the contributions margin and efficiency on the allocation margin

intergenerational altruism and the environment we construct an overlapping generations model of pollution externality in which individuals are altruistically linked to their offspring as in barro 1974 it is shown that steady state consumption may be a decreasing function of the intergenerational degree of altruism despite individuals altruism the competitive equilibrium is not optimal we thus study the social optimum and show that it can be decentralized

the dilemma of enlargement for the european union s regional policy or more than three decades the european union and formerly the european community and the european economic community has pursued a regional policy but the biggest challenge in the short history of this policy field is now under way this is the enlargement process of the european union which will include the former communist countries in eastern and central europe into the eu s existing policy framework we show below that integration of these countries into the eu creates a dilemma for the eu s regional policy the eu currently has two distinct regional policies one active and the other reactive in analysing the differences between them it becomes obvious that a shift from active to reactive regional policy is needed for the eastern enlargement otherwise the existing member states will jeopardise the enlargement process by refusing to finance the enormous increase in expenditures that would be required to continue an active regional policy but a shift to the reactive policy changes dramatically the incentives to the accession countries for eu membership and makes them more resistant to accepting fully the existing set of eu policies hence the dilemma continuing an active regional policy makes enlargement unattractive to the existing members switching to the reactive policy makes the eu membership less attractive to the accession countries to understand this dilemma of enlargement one must understand the forces that have driven the development of the eu s regional policy until today since

long term substitutability between environmental and man made goods abstract substitutability between environmental and man made goods plays a major role in the sustainability debate the notion of substitutability covers a continuous spectrum with perfect substitutability at one end and poor substitutability at the other in this paper it is shown that if economic growth sustains a sharp distinction emerges between perfect and poor substitutability without any intermediate interpretation of substitutability if poor substitutability prevails environmental resources will eventually constitute the major part of total consumption value we relate our results to baumol s disease and assess the implications of this phenomenon for the compensation of environmental losses

irreversibility and uncertainty cause an intergenerational equity efficiency trade off abstract two important policy goals in intergenerational problems are pareto efficiency and sustainability i e intergenerational equity we demonstrate that the pursuit of these goals is subject to an intergenerational equity efficiency trade off our analysis highlights two salient characteristics of intergenerational problems and policy i temporal irreversibility i e the inability to revise one s past actions and ii uncertainty of future consequences of present actions in human environment systems we employ a two non overlapping generations model that combines an intragenerational production decision on the use of circulating capital and a non renewable resource with a negative intergenerational externality as an unforeseen contingency if initially unknown problems become apparent and policy is enacted after irreversible actions were taken policy making faces a fundamental trade off between ex post pareto efficiency and sustainability that is one can achieve either one of these two goals but not both

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

income and employment disparities across european regions the role of national and spatial factors meliciani v 2006 income and employment disparities across european regions the role of national and spatial factors regional studies 40 75 91 the paper analyses the impact of trends in employment rates on income convergence across european regions looking at the evolution of entire distributions between 1988 and 1996 european regions have been characterized by a very slow process of income convergence across countries and by a lack of income convergence within countries while trends in labour productivity have contributed to income convergence trends in employment rates have had a diverging impact polarization in employment rates also appears to be the result of national factors and of the negative performance of objective 1 regions more than the consequence of the emergence of geographical clusters that go beyond national borders regional convergence unemployment spatial correlation non parametric estimation meliciani v 2006 les ecarts de revenu et d emploi a travers les regions d euro

eu regional policy and tax competition the european union eu provides coordination and financing of trans european transport infrastructures i e roads and railways which link the eu member states and reduce the cost of transport and mobility this raises the question of whether eu involvement in this area is justified by inefficiencies of national infrastructure policies moreover an often expressed concern is that policies enhancing mobility may boost tax competition we analyze these questions using a model where countries compete for the location of profitable firms we show that a coordination of investment in transport cost reducing infrastructures within union countries enhances welfare and mitigates tax competition in contrast with regard to union periphery infrastructure the union has an interest in a coordinated reduction of investment expenditures here the effects on tax competition are ambiguous our results provide a rationale for eu level regional policy that supports the development of intra union infrastructure

testing for convergence clubs in income per capita a predictive density approach the article proposes a technique based on the predictive density of the data conditional on the parameters of the model to jointly tests for groups of unknown size in a panel and to estimate the parameters of each group the procedure is applied to the problem of identifying convergence clubs in scaled income per capita data the steady state distribution of european regional data clusters around four poles of attraction with different economic features the distribution of income per capita of oecd countries has two poles of attraction and each group clearly identifiable economic characteristics we share the uncommonness of being different j p roche

the impact of structural and cohesion funds on eurozone convergence 1990 2010 maynou l saez m kyriacou a and bacaria j the impact of structural and cohesion funds on eurozone convergence 1990 2010 regional studies ever since the launch of the european integration process and in particular in the context of economic and monetary union the european union has endeavoured to facilitate economic convergence across europe by providing funds to its poorer regions and countries the main objective of this paper is to analyse whether the structural and cohesion funds have contributed towards convergence between the eurozone countries during the past two decades 1990 2010 the results of the spatio temporal econometric model specified in this paper illustrate that these funds have positively contributed to the gross domestic product per inhabitant gdppc growth of receiving regions thus allowing them to reach conditional convergence