rule making in community forestry institutions the difference women make abstract forest use rules determine what products are extracted from community governed forests in what quantity by what methods and by whom the nature of rules and the process by which they are formulated e g who participates in formulating them can impinge critically on institutional sustainability given their potential impact on the commitment and incentive to protect and on equity and conservation outcomes this is well recognized in the substantial literature on institutions governing common pool resources cprs it is also well recognized although in relation to other types of institutions such as legislatures and village councils that there can be notable differences in women s and men s policy priorities yet there is surprisingly little existing work on or statistical testing of potential gender differences in rule making in institutions managing natural resources such as forests this paper based on the author s primary data for india and nepal seeks to fill this conceptual and empirical gap it examines why we might expect women to favour different rules from men and statistically tests whether the gender composition of the executive committees ecs the main decision making bodies of community forestry institutions cfis in south asia makes a difference to the strictness of forest use rules this is analyzed both by specifying a strictness index which aggregates rules across products and by examining rules for selected products and both for all sample districts together and for each district separately gender is found to make a significant difference to the rules specified but not always in the expected direction given their substantial and daily dependence on local forests especially for firewood and fodder rural women may normally be expected to veer toward lenient rules of extraction in fact groups with more ec women and especially with all women ecs tend to make stricter rules than other groups in most of the sample districts except one district where they tend to make less strict rules greater strictness is attributable especially to the resource constraint faced by all women groups ie cfis with all women ecs which receive smaller and more degraded forests than groups with men less strict rules among cfis in the exceptional district are attributable especially to the disproportionate presence of landless women on their ecs in other words not simply women s presence in rule making but also their economic class can matter strictness also varies by type of product forest and population characteristics the ec s average age and dominant caste and monitoring constraints the potential implications for equity institutional sustainability and forest conservation are also discussed

public health spending old age productivity and economic growth chaotic cycles under perfect foresight abstract this paper analyses the dynamics of a double cobb douglas economy with overlapping generations and public health investments that affect the supply of efficient labour of the old aged it is shown that the positive steady state of the economy is unique moreover we provide necessary and sufficient conditions for the emergence of endogenous deterministic complex cycles when individuals are perfectly foresighted interestingly i the equilibrium dynamics shows rather complicated phenomena such as a multiplicity of bubblings depending on the size of the public health system and ii the higher the degree of thriftiness the likelier an economy is exposed to endogenous fluctuations because the need to save when young to support consumption when old is reduced

on the dynamics of demand for leisure and the production of health our article develops and estimates a structural model of household health production that jointly determines the demand for leisure and the demand for consumption for elderly males we use a stochastic dynamic programming framework based on the assumption that an individual maximizes lifetime utility subject to budget and time constraints and a health production function by choosing hours of leisure and levels of consumption of health related and health neutral goods and services moreover we use a very comprehensive health index that combines four scales measuring a variety of dimensions in the quality of life the euler equations derived from our model are estimated using data from six biennial panels of the retirement history survey

a moral hazard trap to growth this paper studies the consequences of asymmetric information in the investment sector upon economic growth in this paper the information asymmetry generates a moral hazard problem this moral hazard problem restricts financial arrangements it is shown that these restrictions make even the long run competitive equilibrium income dependent upon history this result also holds in case there is perfect capital mobility however when there is capital mobility the government may be able to intervene in a pareto improving way copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

fiscal policy with agents differing in altruism and ability this paper presents an overlapping generations model of growth with individuals differing in productivity and altruism within such a model wealth is entirely held in the steady state by the families with the highest degree of altruism we then look at the macroeconomic and distributive effects of three fiscal policies public debt pay as you go social security and estate taxation under plausible assumption we show that both public debt and social security are neutral a la ricardo but increase inequality we also show that a estate taxation can be pareto worsening even though it can foster income equality

capital accumulation in a stochastic overlapping generations model with social security abstract this paper analyzes the impact of pay as you go financed social security on the stochastic process for the capital stock in a stochastic overlapping generations model it is shown that the probability distribution of the capital stock in absence of social security dominates that in a pay as you go system in the sense of stochastic dominance furthermore the study demonstrates that the sufficient conditions ensuring the existence and uniqueness of stationary equilibria in a pay as you go system are more restrictive than in the model without social security journal of economic literature classification numbers c62 h55

the transfer paradox in a one sector overlapping generations model abstract this paper examines the effects of international income transfers on capital accumulation and welfare in a one sector overlapping generations model it is shown that a strong form of the transfer paradox in which the donor country experiences a welfare gain while the recipient country experiences a welfare loss may occur both in and out of steady state in addition it is shown that a weak form of the transfer paradox where either the donor or recipient but not both experiences a paradoxical welfare effect may characterize all segments of the transition path not already characterized by the strong transfer paradox

the distribution of wealth with imperfect altruism abstract in this paper we study the distribution of wealth in an economy with infinitely lived families individual generations of each family may or may not be altruistic this is represented as a preference shock which follows a first order markov process within each family a feature representingimperfect altruism altruistic individuals care about the welfare of their children and are likely to leave bequests selfish ones do not this results in a non trivial distribution of wealth among families at any point in time we study an economy with a risk free linear production technology and show that a stationary distribution of wealth exists this distribution is discrete and approximates the pareto distribution under additional restrictions we also characterize conditions on the production technology which yields perpetual growth with increasing inequality journal of economic literatureclassification numbers d31 d91 e21

on the empirics of foreign aid and growth the present paper re examines the effectiveness of foreign aid theoretically and empirically using a standard olg model we show that aid inflows will in general affect long run productivity the size and direction of the impact may depend on policies deep structural characteristics and the size of the inflow the empirical analysis investigates these possibilities overall we find that aid has been effective in spurring growth but the magnitude of the effect depends on climate related circumstances finally we argue that the collier dollar allocation rule should be seriously reconsidered by donor agencies if aid effectiveness is related to climate the usefulness of foreign aid in promoting growth in developing countries has been an area of controversy ever since rosenstein rodan in 1943 advocated for aid to eastern and south eastern europe browsing through successive editions of a leading textbook in development economics provides a telling illustration of how the confidence in aid effectiveness dwindled over the years in the first edition of leading issues in economic development meier 1964 dedicated a full 18 page section to the issue of foreign aid he started out asking how much aid by the time of the sixth edition meier 1995 the treatment of foreign aid had been cut into half and the questions in focus were why official assistance and does aid work in the 2000 edition meier and rauch 2000 foreign aid is not even listed in the index

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

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

a generalized equilibrium efficient frontier data envelopment analysis approach for evaluating dmus with fixed sum outputs the recently published equilibrium efficient frontier data envelopment analysis eefdea approach yang et al 2014 represents a step forward in evaluating decision making units dmus with fixed sum outputs when compared to prior approaches such as fsodea fixed sum outputs dea approach yang et al 2011 and zsg dea zero sum gains dea approach lins et al 2003 and so on based on the eefdea approach in this paper we proposed a generalized equilibrium efficient frontier data envelopment analysis approach geefdea which improves and strengthens the eefdea approach compared to eefdea approach this approach makes several improvements in evaluation namely that 1 it is not necessary to determine the evaluation order in advance which overcomes the limitation that different evaluation orders will lead to different results 2 the equilibrium efficient frontier can be achieved in only one step no matter how many dmus they are which greatly simplifies the procedure to reach the equilibrium efficient frontier especially when the number of dmus is large and 3 the constraint that signs of outputs adjustment of each dmu must be same all non positive or all non negative in prior approaches has been relaxed in this sense the result obtained by the proposed approach is more consistent with the demand of practical applications finally the proposed approach combined with assurance regions ar is applied to the data set of 2012 london olympic games

existence and uniqueness of steady state equilibrium in a two sector overlapping generations model abstract in his seminal paper galor a two sector overlapping generations model a global characterization of the dynamical system econometrica 60 1992 1351 1386 establishes conditions for the existence of equilibrium in the two sector overlapping generations olg model although appealing theoretically these conditions are implicit and not easy to apply this paper develops new theorems on the existence and uniqueness of steady state equilibrium in the two sector olg model we provide explicit conditions on the utility and production functions for the existence and uniqueness of equilibrium with which one only needs to check the derivatives of the production and utility functions and their interactions without requiring solving for the savings function and its derivatives we present detailed steps to check the existence and uniqueness of equilibrium and provide illustrative examples

the savings multiplier we develop a theory of macroeconomic development based on the novel concept of savings multiplier capital accumulation changes relative prices and income shares between generations creating further incentives to accumulate and thereby rising saving rates as the economy develops the savings multiplier hinges on two mechanisms first accumulation raises wages and leads to redistribution from the consuming old to the saving young second higher wages raise the price of services consumed by the old and the anticipation of such price rise prompts the young to increase their savings our theory captures important aspects of china s development and suggests new channels through which the one child policy and the dismantling of cradle to grave social benefits have fuelled china s savings and accumulation rates

increasing returns and crowding out abstract this paper explores how public debt interferes with the accumulation of physical capital when the technology displays a production externality of the arrow romer type we identify conditions under which a small positive amount of debt will prevent the economy from ever approaching the stock of capital that it would achieve if public debt were zero we also show that the interaction of debt and production externalities may produce bounded possibly cycling capital stock sequences in economies where sustained growth rates are possible with zero national debt finally welfare issues concerning the relation between static and dynamic inefficiencies are discussed

search unemployment in an overlapping generations setting this paper constructs an overlapping generations model in which the steady state equilibrium is characterized by the existence of search unemployment this dynamic general equilibrium model captures the possible existence of search unemployment in the long run despite the absence of exogenous shocks furthermore it allows for the wage offers distribution to be determined endogenously the effect of partial revelation of information on the existence of search unemployment in the long run is examined it is shown that search unemployment may be eliminated in the long run despite the persistence of the state of imperfect information this paper develops an overlapping generations model in which the steady state equilibrium is characterized by search unemployment 2 unemployment is created via a rational rejection of available wage offers in favor of further search for potentially more attractive offers the proposed dynamic general equilibrium model allows for the existence of long run search unemployment despite the absence of exogenous shocks and permits the presence of an endogenously determined nondegenerate wage offer distribution 3 the paper analyzes the trade off between revelation of information and the level of search unemployment in the long run in the absence of external disturbances the level of search unemployment would be expected to decrease as information becomes available in particular if information is fully revealed search unemployment is naturally eliminated exploring the likelihood of the existence of long run search unemployment in a deterministic world this study provides an example of partial revelation of information which eliminates search unemployment in the long run despite the persistence of the state of imperfect information 4 the proposed model presents a discrete infinite time horizon world where economic activity is conducted under imperfect information in every period a single homogeneous good is produced using two factors capital and labor in the production process the aggregate endowment of labor is exogenously given in

the power of love abstract we show that the presence of at least one individual who loves its children whatever the intensity of this love allows to avoid a possible global contraction of the economy

dynamic efficiency of steady state equilibria in an overlapping generations model with productive capital abstract this paper establishes sufficient technological conditions under which for any feasible set of well behaved preferences stationary over investment relative to the golden rule is ruled out and the economy s steady state equilibria are therefore dynamically efficient

chaotic dynamics in an overlapping generations model with myopic and adaptive expectations in this paper we study dynamic behavior of an overlapping generations model under three different expectations perfect foresight myopic expectations and adaptive expectations we show that economic transition under myopic or adaptive expectations is very different from that under perfect foresight when agents are perfectly foresighted dynamics is simple with a unique steady state that is globally attracting however cycles and chaotic motion can appear under myopic and adaptive expectations we study the possibility of li yorke chaos under myopic expectations and entropic chaos under adaptive expectations

an olg model of global imbalances in this paper we investigate the relationship between east asian countries high propensity to save and global imbalances in a two country olg model with production the saving behavior of emerging economies and capital outflows to the united states can be attributed to their poor pay as you go systems the model predicts that emerging countries run a trade surplus only as long as the long run growth rate of the economy is higher than the real interest rate capital overaccumulation case the low real interest rate in the us is therefore evidence in favor of the hypothesis that there is a global saving glut in the world economy the model can explain why the us current account deteriorated gradually and only in the late 1990s although the net foreign asset position had already turned negative in the early 1980s finally the analysis also implies that an improvement of the pay as you go system in china would have the effect of reducing the imbalances in accordance with the theory we find that the higher is the percentage of the working population covered by the pay as you go system the lower are savings and the current account balance in a cross section of countries

intergenerational flows of time and goods consequences of slowing population growth it is feared that low fertility and older age distributions in the developed countries might cause lower life cycle consumption because of the increased pension and health cost burden the theoretical literature on intergenerational transfers has addressed this question but has considered only the consumption of market goods and has made no serious empirical attempt to measure the theoretical concepts necessary to assess the problem this paper develops a theoretical model of intergenerational transfers incorporating time use with the aid of time budget and consumer expenditure surveys empirical estimates of the age profiles of various types of time and goods consumption are presented and we conclude that 1 the net direction of intergenerational transfers is from younger to older ages 2 under the golden rule assumption these transfers largely constitute an externality to childbearing and 3 they are not large enough to offset the capital dilution effect that would result from higher fertility a

public education under capital mobility the paper considers a two country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital we examine in a non stationary competitive equilibrium the optimal provision of education with and without capital market integration first we explore how regimes of education provision public private or mixed arise and how they affect the dynamics of autarkic economies second we study the effects of capital market integration in equilibrium on the optimal provision of education third we show that capital market integration enhances government intervention in the provision of public education to improve the welfare of its constituents and consider various solutions to such a competition

multiple bgps in a growth model with habit persistence this paper establishes multiple balanced growth paths in an otherwise standard competitive growth model without externality or distortions and with households preference dependent upon how his her consumption compares to a habit stock formed by his her own past consumption the key feature in our model is that consumption forms habits in combination with existing habits this model establishes multiple equilibria because habit persistence induces an internal intertemporal complementarity effect among consumption flows with current consumption reinforcing future consumption as a result there exist two balanced growth paths with one path exhibiting low consumption and habits and high economic growth and the other path exhibiting high consumption and habits and low growth that is not necessarily a development trap both steady states are saddles but global indeterminacy arises where a high balanced growth path co exists with a low balanced growth path where the two equilibrium paths cannot be pareto ranked and history need not matter for the selection of the equilibrium path

temporary and permanent migration with and without an immobile factor abstract this paper develops two two country overlapping generations models one with and one without an immobile factor to study temporary and permanent migration temporary migration is shown to be equivalent to international lending and borrowing one strong result found in the literature that if natives of each country are homogeneous permanent migration leads to the migration of the entire population of the impatient country in the long run is overturned welfare effects of migration are analyzed

handbook of international economics vol 2 this handbook adopts a traditional definition of the subject and focuses primarily on the explanation of international transactions in goods services and assets and on the main domestic effects of those transactions the first volume deals with the real side of international economics it is concerned with the explanation of trade and factor flows with their main effects on goods and factor prices on the allocation of resources and income distribution and on economic welfare and also with the effects on national policies designed explicitly to influence trade and factor flows in other words it deals chiefly with microeconomic issues and methods the second volume deals with the monetary side of the subject it is concerned with the balance of payments adjustment process under fixed exchange rates with exchange rate determination under flexible exchange rates and with the domestic ramifications of these phenomena accordingly it deals mainly with economic issues although microeconomic methods are frequently utilized especially in work on expectations asset markets and exchange rate behavior

how inheriting affects bequest plans we present and test the idea that bequest planning is linked with the experience of inheriting we consider a family tradition of bequeathing as a channel through which the intention to bequeath is moulded by and is positively correlated with the experience of inheriting using data from the survey on health ageing and retirement in europe share we find that the experience of inheriting enhances the intention to bequeath independently of the positive impact of wealth we also find that the expectation of inheriting has a positive impact on the intention to bequeath controlling for the expected increase in wealth on account of future inheritances

asset bubbles in an overlapping generations model with endogenous labor supply this paper examines the effects of asset bubbles in an overlapping generations model with endogenous labor supply we show analytically that asset bubbles can lead to an expansion in steady state capital investment employment and output under certain conditions

growth and convergence when technology and human capital are complements i introduction explaining the persistent productivity differences between countries has long been a focus of the theoretical and empirical growth literature while a large body of work on the conditional convergence hypothesis emphasizes the role of factor accumulation it has been suggested that an explanation of the observed phenomenon is incomplete if not accounting for cross country differentials in total factor productivity tfp 1 one aspect that has received relatively less attention is an apparent history dependence of countries productivity rankings eaton and kortum 1997 report that despite large differences in growth rates over a 40 year period the five leading economies in the world only show two reversals in relative position 2 comparing the labor productivity in seven countries to the u s level over a period of more than 30 years similarly suggests that economies often retain their relative positions with countries starting out at lower productivities also converging to lower levels figure 1 this article presents a model that can provide an explanation for persistent cross country tfp differentials we make two key assumptions first the intellectual property ip embodied in new production technologies is subject to worldwide patent protection the owner of a technology can freely choose where in the world it will be used second we assume that there is complementarity between human capital and the level of technology used in production that is the relative productivity advantage of a new technology is bigger when it is used by more skilled workers we show that under these conditions new technologies are first introduced in the most human capital rich country and subsequently passed on to countries with a less skilled labor force before they eventually become obsolete this mechanism of technology diffusion which emerges endogenously in our model is consistent with the observation that less developed countries typically get access to new technologies later 3 moreover if there is a positive feedback between the level of technology used in a country and the rate of human capital accumulation countries long term productivity levels become history dependent economies that start out with a low human capital stock initially catch up to the leading countries but never fully converge to the same level figure 1 omitted the key difference between our approach and existing models of persistent tfp differentials is that we do not impose any ex ante restrictions on the ability to transfer technologies or relocate production processes internationally in contrast parente and prescott 1994 explicitly model barriers to technology adoption howitt 2000 assumes that while researchers have access to all the technological knowledge available worldwide any technologies that are used in a country must still be developed domestically as a consequence countries that invest more in research and development r d will on average employ more recent technologies and be more productive a very general model of technological spillovers and adoption costs that captures many features of the various approaches discussed in the literature is developed in klenow and rodriguez clare 2005 4 the remainder of this article is laid out as follows section ii discusses the literature relevant to our approach with a focus on motivating our key assumptions and presenting evidence to support the diffusion mechanism implied by our model section iii introduces the general model in section iv we derive and discuss the main results a brief summary is presented in section v together with concluding remarks ii literature overview the degree speed and nature of convergence have been a focus of interest in the growth literature while traditional growth models suggest that countries should converge to a steady state that is dictated by their structural properties a result known as the conditional convergence hypothesis it is understood that a large number of plausible deviations from the standard neoclassical assumptions generate growth models in which outcomes are history dependent

the effects of compulsory schooling on growth income distribution and welfare abstract in this paper we consider an olg model with productive capital and human capital affecting the quality of labor in each generation parents invest in their children s education but disregard its external effect on the aggregate production function government intervention in providing compulsory schooling increases economic growth along the equilibrium path while the intragenerational income distribution becomes more equal also in the long run the majority of individuals in each generation are better off due to compulsory schooling

dynasties and destiny on the roles of altruism and impatience in the evolution of consumption and bequests abstract we study the joint role of altruism and impatience and the impact of evolution in the formation of long term time preferences and in the determination of optimal consumption and optimal bequests we show how the consumption paths of dynasties relate to altruism and to impatience and we reason that long lived dynasties will be characterized by a higher degree of altruism and a lower degree of impatience than short lived dynasties

comparative statics and perfect foresight in infinite horizon economies does a pure exchange economy with an infinite time horizon have determinate perfect foresight equilibria when there is a finite number of infinitely lived agents equilibria are generically determinate this is not true with overlapping generations of finitely lived agents we ask whether the initial conditions together with the requirement of convergence to a steady state locally determine an equilibrium price path in this framework there are many economies with isolated equilibria many with continua of equilibria and many with no equilibria at all with two or more goods in every period not only can the price level be indeterminate but relative prices as well furthermore such indeterminacy can occur whether or not there is fiat money and whether or not the equilibria are pareto efficient this paper considers whether infinite horizon economies have determinate perfect foresight equilibria this question is of crucial importance if instead equilibria are locally indeterminate not only are we unable to make comparative static predictions but the agents in the model are unable to determine the consequences of unanticipated shocks the idea underlying perfect foresight is that agents expectations should be the actual future sequence predicted by the model if the model does not make determinate predictions the concept of perfect foresight is meaningless we consider two extreme cases the first with a finite number of infinitely lived consumers and the second with an infinite number of finitely lived consumers an overlapping generations model both are models of stationary pure exchange economies no production including the storage of goods between periods can occur these models are unrealistic but are the easiest to study extensions of the results of this paper to models with production infinitely lived assets and mixtures of the two types of consumers are presented by muller and woodford 29 when there is a finite number of infinitely lived consumers we argue that equilibria are generically determinate this is because the effective number of equations determining equilibria is not infinite but equal to the number of agents minus one and must determine the marginal utility of income for all but one agent generically near an equilibrium these equations are independent and exactly determine the unknowns when there are infinitely many overlapping generations this reasoning breaks down an infinite number of equations is not necessarily sufficient to determine

determinacy of equilibrium in an overlapping generations model with heterogeneous agents abstract we study the determinacy of perfect foresight equilibrium near a steady state in an overlapping generations model with production and both altruistic and non altruistic agents having distinct utility functions the proportion of each type of consumer is exogenously given our main results show that when there are positive stationary bequests some standard assumptions on preferences and technology rule out local indeterminacy for any positive value of the proportions in the particular case of a separable utility function for altruistic agents we prove that the determinacy property does not depend on the size of the infinite lived altruistic dynasties journal of economic literature classification numbers c62 d91 o21 o41

existence uniqueness and stability of equilibrium in an overlapping generations model with productive capital abstract this paper analyzes the existence uniqueness and stability of a steady state equilibrium in an overlapping generations model with productive capital it is shown that for any feasible set of well behaved preferences there exists a production function that satisfies the inada conditions under which the economy experiences global contraction and the steady state equilibrium is characterized by the absence of production and consumption the study establishes a strengthened inada condition which is necessary to preclude global contraction and sufficient conditions for the existence of a unique and globally stable non trivial steady state equilibrium

endogenous fertility and the henry george theorem abstract models of endogenous demographic change deal with population size as an additional object of the welfare analysis in these models the overlapping generations olg model serves as the basic framework in club theory too population size is treated as an endogenous variable in local public goods lpg models the so called henry george theorem which requires local public expenditures to be financed by a 100 tax on aggregate land rent is known as a first order condition for club efficiency the present paper establishes and exploits an isomorphism between steady states of the olg model and allocations of the lpg model the paper revisits samuelson s fallacy concerning his goldenest golden rule and it explores institutional arrangements that sustain the optimum growth of population

piecemeal versus precipitous factor market integration textabstractstudies the effects of speed of international factor markets integration within a general equilibrium two country model variant of diamond s overlapping generations model effects of an international factor market liberalization determination of the amount of capital needed to integrate eastern europe with the european community

stability of equilibria in the overlapping generations model with endogenous labor supply abstract this paper looks at the issue of existence and stability of steady state equilibria in an overlapping generations model with productive capital a la diamond augmented to include endogenous labor supply the paper derives some necessary and sufficient conditions under which a steady state equilibrium is a sink a saddle point or a source under a simple condition on the labor supply elasticity it is also shown that the local stability condition of the standard diamond model can be generalized in order to become a necessary and sufficient condition for the saddle point property of the steady state equilibrium

confidence and the real value of money in an overlapping generations economy we demonstrate that stochastic bubbles which have a constant exogenous probability of collapsing may exist in general equilibrium on an intrinsically useless and unbacked asset money this may happen provided that the probability q that the bubble will persist next period is large enough and exceeds a threshold level q which we call the minimum rate of confidence this condition is always violated when the economy without bubble is dynamically efficient it is more likely to be satisfied in dynamically inefficient economies the larger the size of the inefficiency as measured by the excess of the growth rate over the no bubble interest rate we study both exchange and production economies

rent appropriation and sustained growth abstract this paper demonstrates that the introduction of imperfect competition into the labor market can solve the problem isolated by jones and manuelli journal of economic theory 1992 58 171 197 and boldrin journal of economic theory 1992 58 198 218 that in economies with convex technologies and finitely lived agents real wages may not grow fast enough for unbounded growth to be sustained i show that if wages are determined by a bargaining solution and if the bargaining power of the workforce is sufficiently high if they appropriate a sufficiently large proportion of rents then growth is unbounded moreover the growth path generated by such an economy may improve the welfare of all generations apart from the initial old

will you marry me a perspective on the gender gap abstract this paper develops a general equilibrium model of the gender wage gap the difference in earnings is a consequence of a demographic regularity that men tend to marry younger women which may limit women s labor mobility and hence their average earnings however couples are always free not to marry and do so only if it is in each s self interest the intrafamily allocation of resources is determined via non cooperative bargaining this leads to interesting interactions between the game played by husband and wife on the one hand and the competitive environment in which they are immersed on the other the predictions resulting from this model s interplay between locational choice and family bargaining are consistent with the observation that the increasing stress put by women on their careers over the past 30 years has been contemporaneous with reductions in both marriage rates and the gender gap the model provides insight into the consequences of this for the relative welfare of men and women as well as exploring its wider economic implications

could prometheus be bound again a contribution to the convergence controversy abstract this paper presents a neoclassical model of stochastic growth in which the probability of adverse shocks to production is inversely related to the aggregate stock of capital per capita postulating this endogenous relationship justified by empirical evidence the model yields predictions that are largely consistent with the recent findings of cross country club convergence differently from the standard explanation based on multiplicity of steady states this model is also able to yield predictions consistent with observable intra distribution dynamics thus accounting for phenomena such as economic miracles growth disasters and reversals of fortune

characterizing an equitable allocation of shared costs a dea approach abstract in many applications to which dea could be applied there is often a fixed or common cost which is imposed on all decision making units this would be the case for example for branches of a bank which can be accessed via the numerous automatic teller machines scattered throughout the country a problem arises as to how this cost can be assigned in an equitable way to the various dmus in this paper we propose a dea approach to obtain this cost allocation which is based on two principles invariance and pareto minimality it is shown that the proposed method is a natural extension of the simple one dimensional problem to the general multiple input multiple output case

the adjusted spherical frontier model with weight restrictions abstract this paper presents the asfm lp model a parametric data envelopment analysis dea model for allocating resources commonly called inputs this model considers that a fair allocation of inputs is one that maximizes the dea ccr efficiencies of the decision making units dmus the main assumption of the asfm lp is the predefined spherical shape of the efficiency frontier we have demonstrated that our method extends the existing parametric model asfm to allow the introduction of weight restrictions which has great importance in practical applications of dea numeric examples are presented to show the application of the method

allocating fixed costs and resources via data envelopment analysis abstract in this paper we show that data envelopment analysis dea can be viewed as maximising the average efficiency of the decision making units dmus in an organisation building upon this we present dea based models for a allocating fixed costs to dmus and b allocating input resources to dmus simultaneous to allocating input resources output targets are also decided for each dmu numeric results are presented for a number of example problems taken from the literature

olympic ranking based on a zero sum gains dea model abstract it is usual to rank the participant countries in the olympic games in accordance with the number of medals they have won an alternative ranking is suggested in this paper this ranking is based on each country s ability to win medals in relation to its available resources this is an efficiency that can be measured with the help of data envelopment analysis dea for which two models exist the traditional dea model that takes into account variable returns to scale and a dea model based on the premise that the sum of the gains is zero constant sum of outputs it is the latter that is developed in this paper

why does schooling generate economic growth abstract this paper examines the relationship between schooling and gnp growth found in cross country growth regressions using a standard decompositional technique i divide education s effect on economic growth into three parts 1 an effect from the change in the returns to schooling over time 2 an indirect effect coming from schooling s positive effect on schooling growth and 3 a direct effect coming from education s raising income growth even holding education growth constant the lion s share of the schooling gdp growth connection comes from the schooling schooling growth connection

terms of trade and current account dynamics a methodological critique this paper suggests that the recent intertemporal studies concerning the implications of terms of trade deterioration on the current account of a small open economy may suffer from significant methodological deficiencies the study demonstrates that while the assumption of a small open economy represents a legitimate modeling simplification the analysis of the impact of perturbation of the terms of trade on the current account of this small open economy is methodologically erroneous in particular the paper demonstrates that a given pattern of terms of trade deterioration may be associated with opposing evolutionary patterns of the current account of this small economy this paper argues that the methodology employed by several influential intertemporal studies concerning the relationship between the terms of trade and the current account of a small economy suffers from critical deficiencies it demonstrates that while the assumption of a small open economy confronting exogenously determined terms of trade represents a legitimate modeling simplification the analysis of the impact of perturbations of this terms of trade on the small open economy and on its current account is methodologically erroneous in particular the paper demonstrates that a small economy may experience diametrically opposing evolutionary patterns of the current account in association with a given pattern of terms of trade deterioration the paper suggests therefore that predictions based on this literature are in need of reassessment these intertemporal studies of the relationship between the terms of trade and the current account of a small economy have been conducted under the simplifying assumption that perturbations in the terms of trade are exogenous and do not affect the world interest rate 2 this approach may reflect a valid simplification as long as the study is concerned with exportable goods whose prices are insignificant in the determination of the general price level in the world economy however if the focus of the analysis is a small country that exports a group of commodities such as agricultural goods or industrial goods a change in the terms of trade for the small economy may reflect fundamental changes in the world relative prices that are

a family production overlapping generations economy abstract this paper provides a theoretical analysis of an overlapping generations economy in which production decisions and input output allocations are all carried out at the family level i consider a single class of output allocation schemes and various degrees of knowledge about the production technology under complete knowledge i show that a family organizational structure in which everyone receives his marginal contribution to output invests less in physical capital than under a perfectly competitive equilibrium environment under incomplete knowledge i analyze and compare how beliefs about the input output relationship affect the physical capital accumulation dynamics and the long run standards of living

indeterminacy in dynamic models when diamond meets ramsey abstract we consider an aggregate two periods overlapping generations model with endogenous labor consumption in both periods of life homothetic preferences and productive external effects coming from the average capital and labor we show that under realistic calibrations of the parameters in particular a large enough share of first period consumption over the wage income local indeterminacy of equilibria cannot occur with capital externalities alone it can nevertheless occur when there are only even very small vanishing labor externalities provided that the elasticity of capital labor substitution and the wage elasticity of the labor supply are large enough we also show that if labor externalities are slightly stronger but still small enough to be plausible and the elasticity of labor supply is larger local indeterminacy occurs in a cobb douglas economy finally we show that a locally indeterminate steady state is generically characterized by an under accumulation of capital it follows therefore that while agents live over a finite number of periods the conditions for the existence of locally indeterminate equilibria are very similar to those obtained within infinite horizon models and that from this point of view diamond meets ramsey

precautionary saving credit constraints and irreversible investment theory and evidence from serniarid india this article investigates the extent to which poor households are discouraged from making a non divisible but profitable investment using data on irrigation wells in india we estimate the parameters of a structural model of irreversible investment results show that poor farmers fail to undertake a profitable investment that they could in principle self finance because the nondivisibility of the investment puts it out of their reach irreversibility constitutes an additional disincentive to invest simulations show that the availability of credit can dramatically increase investment in irrigation and that interest rate subsidization has little impact

cultural constraints on innovation based growth to what extent does the cultural composition of a society impose a constraint on its long run growth potential we study this question in the context of an innovation based model of growth where cultural attitudes are endogenously transmitted from one generation to the next focusing on attitudes regarding patience we analyze the two way interaction between economic growth and the intergenerational transmission of patience exploiting this interaction we compare the long run growth performance of a culturally heterogeneous society where patience is initially underrepresented in the population with a culturally homogeneous society where all agents are perfectly patient our main result is that in the absence of any intrinsic preferences of patient parents to transmit their attitudes to their children the development paths of the two societies are bound to diverge with the culturally heterogeneous society experiencing lower growth rates yet if patient parents ceteris paribus prefer their children to be patient like them we show that the two societies can in the long run grow at the same rate jel d91 e24 o30 o40 z10

real business cycles investment finance and multiple equilibria abstract this paper develops a simple neo classical model of the business cycle characterised by multiple equilibria produced by the interaction of the investment and production processes for the usual symmetric information model the source of the multiple equilibria may be found in non linearities in the production function under asymmetric information another possible source of multiple equilibria is non linearities in the investment wealth relationship persistence is generated by changes in the supply of funds and hence in the capital stock journal of economic literatureclassification numbers d50 e32

national debt savings and real interest rates in a neoclassical model with endogenous labour supply and knowledge based growth in this paper the interest rate effect of government deficit financing in neoclassical model with endogenous labour supply and knowledge based growth is examined it is shown that government deficits do not raise interest rates if consumption and leisure are good substitutes and there is a large spillover effect in knowledge creation jel classification e13 e60 h60 dette nationale epargnes et taux d interet reels dans un modele neo classique ou la croissance est fondcle sur la connaissance et l offre de travail endogmne ce memoire examine les effets sur le taux d interet du financement d un deficit gouvernemental dans un modele neo classique ou la croissance est fondee sur la connaissance et l offre de travail endogene on montre que les d6ficits gouvernementaux ne font pas croitre les taux d interet si la consommation et le loisir sont des biens substituts et qu il y a des effets extemes importants qui decoulent de la production de la connaissance

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

aspirations habit formation and bequest motive we analyze how the presence of endogenous preferences affects the altruistic bequest motive from parents to children we will show that the existence of habits raises the threshold value of the intergenerational discount factor above which altruistic bequests are positive while aspiration formation could push this value down therefore the dynamic inefficiency of the economy with no altruism is not sufficient to prevent the bequest motive from being operative under aspiration formation we also discuss the implications of public debt when the bequest motive is inoperative and preferences exhibit habit and aspiration formation

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

technological breakthroughs and development traps abstract this paper attempts to explain why countries which maintain identical economic conditions at different points in time do not necessarily enjoy a similar path of output growth thereafter the paper develops a simple model where timing is a significant element of economic growth the analysis indicates that despite the fact that the steady state equilibrium in a leading country is unique equilibrium in a country that lags behind may be path dependent a technological progress in the advanced country presents a choice of technology in the following country that affects its dynamic evolution and may trap the economy in a lower steady state equilibrium

transitory productivity shocks and long run output this paper analyzes the effects of transitory productivity shocks on long run output the study demonstrates that despite it transitory nature an adverse productivity shock may result in lower long run output a fall in productivity reduces output and savings and consequently the interest rate increases and investment in human capital falls although productivity returns to its initial level a sufficiently large reduction in investment pushes the economy to a new stationary equilibrium with lower output a redistribution of income from consumers to savers may restore the initial long run output copyright 1992 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

trade capital mobility and tax competition this paper examines a system of governments national state or local that finance public expenditures with taxes on mobile capital e g a property tax unlike previous research on tax competition explicit consideration is given to the general equilibrium determination of the prices at which goods are traded between regions the analysis identifies inefficiencies in government behavior that are not apparent in models in which the terms of trade are exogenously given capital taxation is shown to create an inefficient distribution of public good outputs across regions accompanied by an inefficient pattern of trade a model is presented in which the chosen levels of public good outputs differ across regions containing identical residents and production possibilities there is a wasteful diversity of public good supplies

myopic and perfect foresight in the olg model we compare the dynamics under myopic foresight and under perfect foresight in an overlapping generations model with capital accumulation and two period lived individuals when the rational dynamics are defined and the myopic dynamics are monotonic the study of myopic foresight allows to characterize the dynamics under perfect foresight the study of myopic dynamics also allows to obtain a condition of uniqueness of the steady state that bears only on the second order derivatives of the utility and production functions

capital markets integration growth and income distribution the paper considers a two country model of overlapping generation heterogenous economies with intergenerational transfers carried out in the form of bequest and investment in human capital we examine in competitive equilibrium the transitory and long run effects of capital markets integration first we explore how the regime of public education affects the dynamics of the integrated economy second we study the effects of capital markets integration in equilibrium on the intragenerational income distribution in both the host and investing country

the less you discount the more it shows you really care interpersonal discounting in households abstract household members make monetary tradeoffs across time classical economics treats these decisions as if one rational individual makes them this assumption masks important other regarding concerns between spouses we designed an artefactual field experiment and collected data from 94 pairs of cohabiting couples to capture the complex nature of intra household time preferences estimation results show that 1 the interpersonal discount rate the rate used to tradeoff intertemporal payoffs between one s own payoff and the spouse s payoff is significantly different from the individual discount rate and 2 the interpersonal discount rate may provide an alternative way for people to express their other regarding preferences towards their spouses

dynamic externalities multiple equilibria and growth abstract i consider an olg model with production and a single commodity i show that in such an environment unbounded growth of income per capita is not possible if the aggregate technology is of the constant returns to scale type i introduce an external effect in the aggregate production function and derive conditions under which persistent growth is an equilibrium outcome the introduction of an external effect also creates poverty traps and open sets of initial conditions for which there exists an infinite multiplicity of equilibria when such a multiplicity exists equilibria with the same initial position will display different asymptotic behaviors finally i show that by introducing appropriate tax schemes a unique equilibrium path can be selected

safe debt risky capital the author extends the diamond 1965 model of national debt in two directions she first introduces technological uncertainty and then she allows the stock of debt to vary the author studies the dynamical equilibria of the resulting stochastic system and she establishes conditions for the existence of stationary states that are expressed in terms of invariant distributions since conditions that ensure the existence of a stochastic stationary state with positive debt are very restrictive in this model financial instability is a pervasive phenomenon and allocations are in general dynamically inefficient copyright 1994 by the london school of economics and political science

the international ramifications of tax reforms supply side economics in a global economy this paper studies tax reforms in a dynamic model of a global economy calibrated to current u s and european tax policies world capital markets add consumption smoothing and income redistribution effects that alter closed economy predictions in the absence of taxes on foreign interest welfare gains of eliminating u s income taxes are enlarged by up to 34 percent at the expense of european losses caused by transitional declines in consumption and leisure and a permanent capital outflow in contrast if foreign interest is taxed the same tax reform reduces u s welfare 0 7 percent and increases european welfare 1 8 percent copyright 1998 by american economic association