perfect equilibria in a negotiation model rubinstein s alternating offers bargaining model is enriched by assuming that players payoffs in disagreement periods are determined by a normal form game it is shown that such a model can have multiple perfect equilibria including inefficient ones provided that players are sufficiently patient delay is possible even though there is perfect information and the players are fully rational the length of delay depends only on the payoff structure of the disagreement game and not on the discount factor not all feasible and individually rational payoffs of the disagreement game can be supported as average disagreement payoffs indeed some negotiation games have a unique perfect equilibrium with immediate agreement

globalization and the great u turn income inequality trends in 16 oecd countries the debate on the resurgence of income inequality in some advanced industrial societies has often focused on the impact of an increasingly integrated world economy typified by growing capital mobility heightened international competition and an increase in migration this study represents one of the first systematic cross national examinations of the role of globalization in the inequality u turn results indicate on the one hand that total inequality variation is principally affected by the percentage of the labor force in agriculture followed by the institutional factors union density and decommodification and only then by globalization on the other hand longitudinal variation in inequality while still dominated by the percentage of the labor force in agriculture is also principally affected by aspects of globalization such as southern import penetration and direct investment outflow and to a lesser extent by migration in other words globalization explains the longitudinal trend of inc

changing income inequalities within and between nations new evidence fresh data sources on cross national income are examined to document recent changes in the composition of world income inequality within and between nations new evidence shows that during the 1980s and 1990s the composition of world income inequality experienced a fundamental change characterized by the diminishing significance of between nation income differences and the growing prominence of within nation inequalities two competing trends account for this change 1 steady growth in the average level of income inequality within nations and 2 a decline in income inequality between nations these recent trends signify a reversal in one of the major legacies of the industrial revolution the internationalization of world income inequality across national borders the findings raise important questions for future studies of cross national inequality and development

marshall s versus jacobs externalities in firm innovation performance the case of french industry galliano d magrini m b and triboulet p marshall s versus jacobs externalities in firm innovation performance the case of french industry regional studies this paper analyses the influence of different types of spatial externalities related to the location of firms on their innovation performance and how those externalities combine in the territories with regard to the marshall jacobs dichotomy the originality of this study also lies in the consideration of a larger definition of the firm one that takes into account the location of all its units based on a dataset of french industrial firms and specific indicators to evaluate the specialization and or diversification of the employment zones the impacts of the spatial profile of the firm on its innovation performance are tested

the power to delay abstract this paper studies a bilateral bargaining game in which one party can suspend the game indefinitely if suspension is costless multiple equilibria arise if suspension is costly and subject to a budget constraint a unique equilibrium with immediate agreement is obtained

a cross country comparison of rural income generating activities summary this paper uses a newly constructed cross country database composed of comparable income aggregates to examine the full range of income generating activities carried out by rural households the analysis paints a clear picture of multiple activities across rural space in countries on all four continents though less so in the included african countries for most countries the largest share of income stems from off farm activities and the largest share of households has diversified sources of income diversification not specialization is the norm nevertheless agricultural sources of income remain critically important for rural livelihoods in all countries

geography industrial organization and agglomeration this paper makes two contributions to the empirical literature on agglomeration economies first the paper uses a unique and rich database in conjunction with mapping software to measure the geographic extent of agglomerative externalities previous papers have been forced to assume that agglomeration economies are club goods that operate at a metropolitan scale second the paper tests for the existence of organizational agglomeration economies of the kind studied qualitatively by saxenian 1994 this is a potentially important source of increasing returns that previous empirical work has not considered results indicate that localization economies attenuate rapidly and that industrial organization affects the benefits of agglomeration

spatial evolution of the computer industry in the usa abstract this paper examines the spatial evolution of computers across 317 metro areas in the usa since the introduction of the personal computer we start by examining the relative distribution of employment across cities examining how that distribution changes in 1977 1992 and how cities move through the distribution for computers transition matrices are stationary with the industry exhibiting no tendency to settle down nor any tendency of retrenchment during periods of national high tech employment decline there is no tendency of the relative size distribution of computer employment to collapse go bimodal etc overall computers exhibit some turbulence with dramatic big winners and losers among cities as well as persistence for some cities in employment shares in attracting or repelling an industry urban heterogeneity is important large well educated cities near san jose have a much greater chance of attracting high tech employment much lower mean first passage times moving up states and less chance of losing it in assessing the determinants of persistence in local employment patterns we examine sources of productivity growth we find strong evidence of significant dynamic own industry externalities for single plant firms and little evidence of urbanization jacobs knowledge type externalities corporate plants in computers seem to be self reliant and not really influenced by externalities

agricultural price distortions trends and volatility past and prospective thanks are due to the australian research council the rural industries research and development corporation and the world bank for financial assistance

is workfare cost effective against poverty in a poor labor surplus economy workfare schemes impose work requirements on beneficiaries this has seemed an attractive idea for self targeting transfers to poor people this incentive argument does not imply however that workfare is more cost effective against poverty than even poorly targeted options given hidden costs of participation in particular even poor workfare participants in a labor surplus economy can be expected to have some forgone income when they take up such a scheme a survey based method is used to assess the cost effectiveness of india s employment guarantee scheme in bihar participants are found to have forgone earnings although these fall well short of market wages on average factoring in these hidden costs the paper finds that for the same budget workfare has less impact on poverty than either a basic income scheme providing the same transfer to all or uniform transfers based on the government s below poverty line ration cards for workfare to dominate other options it would have to work better in practice reforms would need to reduce the substantial unmet demand for work close the gap between stipulated wages and wages received and ensure that workfare is productive that the assets created are of value to poor people cost effectiveness would need to be reassessed at the implied higher levels of funding

farm productivity and rural poverty in india armed with new data we return to an old question from the pages of this journal to what extent do india s rural poor share in agricultural growth combining data from 24 household sample surveys spanning 35 years with other sources we estimate a model of the joint determination of consumption poverty measures agricultural wages and food prices we find that higher farm productivity brought both absolute and relative gains to poor rural households a large share of the gains was via wages and prices though these effects took time the benefits to the poor were not confined to those near the poverty line

modeling agricultural growth multipliers agriculture s potential as an engine of third world growth depends in large part on the size of the production and consumption linkages it stimulates in rural regions current estimates of agricultural growth multipliers within rural regions vary widely not only because economic structures differ across regions but also because the array of fixed price models most commonly used embody widely differing basic assumptions among fixed price models the semi input output formulation projects the most plausible multipliers but even they overstate the magnitude of growth multipliers by 10 to 25 according to the price endogenous model developed here

demography growth and global income inequality global income inequality has been declining for several decades we argue that global income inequality will reach its lowest level around 2027 and then will rise again this development is the result of both economic and demographic forces by combining economic projections with demographic developments and by using gdp per worker instead of gdp per capita in projecting income levels we emphasize the role of demographics in income inequality especially in the long run after 2030 differences in population growth and population structure between countries in different stages of development are shown to increase global income inequality

global inequality of opportunity how much of our income is determined by where we live suppose that all people in the world are allocated only two characteristics over which they have almost no control country of residence and income distribution within that country assume further that there is no migration the authors show that more than one half of variability in income of world population classified according to their household per capita in one percent income groups by country is accounted for by these two characteristics the role of effort or luck cannot play a large role in explaining global distribution of income

money burning and multiple equilibria in bargaining abstract this paper synthesizes recent work on delay and multiple equilibria in complete information rubinstein bargaining we identify a general principle money burning underlying prior results and develop a general model of the phenomena money burning is a threat by one player to destroy surplus which can serve to enhance that player s bargaining power if it is credible our results show that the uniqueness and efficiency properties of the subgame perfect equilibrium of rubinstein bargaining are vulnerable to players ability to burn money journal of economic literature classification number 026

the dynamics of agglomeration externalities along the life cycle of industries neffke f henning m boschma r lundquist k j and olander l o the dynamics of agglomeration externalities along the life cycle of industries regional studies this paper investigates the changing roles of agglomeration externalities along the industry life cycle it is argued that industries have different agglomeration needs in different stages of their life cycles because their mode of competition innovation intensity and learning opportunities change over time for twelve swedish manufacturing industries it is determined for each year between 1974 and 2004 whether the industry is in a young intermediate or mature stage whereas marshall arrow romer mar externalities steadily increase with the maturity of industries the effects of local diversity jacobs externalities are positive for young industries but decline and even become negative for more mature industries neffke f henning m boschma r lundquist k j et olander l o la dynamique des effets externes d agglomeration tout

would freeing up world trade reduce poverty and inequality the vexed role of agricultural distortions trade policy reforms in recent decades have sharply reduced the distortions that were harming agriculture in developing countries yet global trade in farm products continues to be far more distorted than trade in nonfarm goods those distortions reduce some forms of poverty and inequality but worsen others so the net effects are unclear without empirical modeling this paper summarizes a series of new economy wide global and national empirical studies that focus on the net effects of the remaining distortions to world merchandise trade on poverty and inequality globally and in various developing countries the global linkage model results suggest that removing those remaining distortions would reduce international inequality largely by boosting net farm incomes and raising real wages for unskilled workers in developing countries and would reduce the number of poor people worldwide by 3 percent the analysis based on the global trade analysis project model for a sample of 15 countries and nine stand alone national case studies all point to larger reductions in poverty especially if only the non poor are subjected to increased income taxation to compensate for the loss of trade tax revenue

is globalization reducing poverty and inequality abstract over the past 20 years or so india china and the rest of east asia experienced fast economic growth and falls in the poverty rate latin america stagnated the former soviet union central and eastern europe and sub saharan africa regressed but what are the net trends the neoliberal argument says that world poverty and income inequality fell over the past two decades for the first time in more than a century and a half thanks to the rising density of economic integration across national borders the evidence therefore confirms that globalization in the context of the world economic regime in place since the end of bretton woods generates more mutual benefit than conflicting interests this paper questions the empirical basis of the neoliberal argument

r d cooperation and failures in innovation projects empirical evidence from french cis data the second french community innovation survey cis indicates that 14 of rd collaborating firms had to abandon or delay their innovation projects due to difficulties in their partnerships an outcome which we term cooperation failures controlling for sample selection on the cooperation decision our estimates show that firms collaborating with competitors and public research organizations pros especially when they are foreign are more likely to delay or stop an innovation project because of difficulties encountered in their rd partnerships more surprisingly firms collaborating with their suppliers also face a higher risk of cooperation failures at least for pros firms can reduce the risk of cooperation failures through previous experiences in partnerships larger firms and group subsidiaries are less likely to face cooperation failures and so do firms in industries with a strong appropriability regime

measuring poverty in a growing world or measuring growth in a poor world the extent to which growth reduces global poverty has been disputed for 30 years although there are better data than ever before controversies are not resolved a major problem is that consumption measured from household surveys which is used to measure poverty grows less rapidly than consumption measured in national accounts in the world as a whole and in large countries particularly india china and the united states in consequence measured poverty has fallen less rapidly than appears warranted by measured growth in poor countries one plausible cause is that richer households are less likely to participate in surveys but growth in the national accounts is also upward biased and consumption in the national accounts contains large and rapidly growing items that are not consumed by the poor and not included in surveys so it is possible for consumption of the poor to grow less rapidly than national consumption without any increase in measured inequality current statistical procedures in poor

empirics of world income inequality this article employs a common general formula for inequality indexes to answer several basic questions about intercountry income inequality in recent decades has inequality across nations increased or declined and why have earlier studies yielded mixed results have different rates of population growth played a significant role in the trend have large nations dominated the trend are the results robust over different inequality measures and different income series two findings stand out first different rates of population growth in rich and poor nations played the predominant role in determining change in the distribution of per capita income across nations second the centuries old trend of rising inequality leveled off from 1960 to 1989 the dependency theory thesis of a polarizing world system receives no support

the effect of liquid housing wealth on college enrollment this article uses short run housing wealth changes to identify the effect of housing wealth on college attendance i find that households used their housing wealth to finance postsecondary enrollment in the 2000s when housing wealth was most liquid each 10 000 in home equity raises college enrollment by 0 7 of a percentage point on average the effect is localized to lower resource families for whom a 10 000 increase in housing wealth increases enrollment by 5 7 percentage points these estimates imply that the recent housing bust could significantly negatively affect college enrollment through reduction in the housing wealth of families with college age children

rank stock order and epidemic effects in the diffusion of new process technologies an empirical model in this article we construct a general duration model of technology adoption that incorporates the main factors discussed in different theories of diffusion of new process technologies the model is applied to data on diffusion of cnc in the uk engineering industry although we find strong evidence in support of rank and endogenous learning effects there seems to be little evidence in support of the stock and order effects the main factors affecting the diffusion of cnc are found to be endogenous learning firm size industry growth rates the cost of the technology and expected changes in the cost of the technology

decentralized one to many bargaining we study a one to many bargaining model in which one active player bargains with every passive player on how to share the surplus of a joint project the order of bargaining is not fixed and the active player decides whom to bargain with in each period our model admits a rich set of equilibria and we identify the upper and lower bounds of equilibrium payoffs we also examine whether two natural ordering protocols often assumed in existing studies can sustain endogenously although the queuing protocol may indeed arise in an equilibrium the rotating protocol is in general not self enforcing

on the marshall jacobs controversy it takes two to tango the literature is inconclusive as to whether marshallian specialization or jacobian diversification externalities favour regional innovativeness the specialization argument poses that regional specialization towards a particular industry improves innovativeness in that industry regional specialization allows for knowledge to spill over among similar firms by contrast the diversification thesis asserts that knowledge spills over between firms in different industries causing diversified production structures to be more innovative building on an original database we address this controversy for the netherlands we thereby advance on the literature by providing a two level approach at the region s and the firm s level at the regional level we compare specialized with diversified regions on numbers of accommodated innovators at the firm level we establish causalities between externalities and degree of innovativeness the results unambiguously suggest marshallian externalities specialized regions accommodate increased numbers of innovating firms and consistently incumbent firms innovativeness increase with regional specialization once the product has been launched innovators in diversified jacobian regions appear to be more successful in commercial terms than innovators in specialized marshallian regions

a letter to the editor on wage bargaining abstract the rubinstein perfect information alternating offers bargaining model is problematic when applied to wage negotiations a strike or any other industrial action is not an automatic consequence of a delay in reaching an agreement because production can continue normally also when negotiations take place this paper extends the rubinstein model to incorporate the choice of calling a strike and it is shown that in this model there is no longer a unique subgame perfect equilibrium and that strikes with a length in real time can occur in equilibrium

non cooperative bargaining theory an introduction the paper provides an informal introduction to some of the main themes of the recent literature on non cooperative or sequential bargaining models it focuses in particular on the relationship between the new approach and the traditional axiomatic approach exemplified by nash bargaining theory it illustrates the new insights offered by the non cooperative approach by reference to a detailed analysis of the manner in which the presence of an outside option available to one of the parties will affect the negotiated outcome finally the difficulties which arise in extending this analysis to two person bargaining with incomplete information and to n person bargaining are discussed this is a revised version of the fourth review of economic studies lecture presented in april 1985 at the joint meeting of the association of university teachers of economics and the royal economic society held in oxford the choice of lecturer is made by a panel whose members are currently professors hahn mirrlees and nobay and the paper is refereed in the usual way this paper aims to provide an informal and elementary introduction to an approach to bargaining which has received a great deal of attention over the past few years the approach involves writing down some particular sequence of moves offers and replies to be made over time in the course of negotiations and then looking for a non cooperative equilibrium in the game thus specified in practice a perfect equilibrium or in games of incomplete information a sequential equilibrium while the approach appears at first sight to be very different in spirit from the traditional axiomatic approach in which a bargaining solution is specified by appealing to a number of general requirements which are deemed appropriate on the basis of some a priori considerations the two approaches are in fact complementary while the

inequality an assessment concern about inequality particularly inequality of income and wealth has become prominent in public discourse around the world this article first discusses issues of measurement and goes on to ask why we should care emphasizing fairness and the market distortions and negative externalities found in unequal societies it documents that the decline in global inequality in recent decades has been due to falling inequality between rather than within countries the popular picture of rising inequality in oecd countries is more varied and complex than often perceived its drivers include aspects of globalization and of technological change as well as changes in the distribution of market power in financial markets public policy and monetary policy there are two over arching questions about how governments can address inequality the first is what should be tackled at the international level and what should be the preserve of national policy the second is what should be the balance between pre and post market interventions both have a role but generally the balance has been too skewed towards the latter

looking beyond averages in the trade and poverty debate there has been much debate about how much poor people in developing countries gain from trade openness as one aspect of globalization the paper views the issue through both macro and micro empirical lenses the macro lens uses cross country comparisons and aggregate time series data the micro lens uses household level data combined with structural modeling of the impacts of specific trade reforms case studies are presented for china and morocco both the macro and micro approaches cast doubt on some widely heard generalizations from both sides of the globalization debate additionally the micro lens indicates considerable heterogeneity in the welfare impacts of trade openness with both gainers and losers among the poor a number of covariates of the individual gains are identified the results point to the importance of combining trade reforms with well designed social protection policies

the world distribution of income falling poverty and convergence period we estimate the world distribution of income by integrating individual income distributions for 138 countries between 1970 and 2000 country distributions are constructed by combining national accounts gdp per capita to anchor the mean with survey data to pin down the dispersion poverty rates and head counts are reported for four specific poverty lines rates in 2000 were between one third and one half of what they were in 1970 for all four lines there were between 250 and 500 million fewer poor in 2000 than in 1970 we estimate eight indexes of income inequality implied by our world distribution of income all of them show reductions in global inequality during the 1980s and 1990s

true world income distribution 1988 and 1993 first calculation based on household surveys alone the paper derives world income or expenditure distribution of individuals for two years 1988 and 1993 it is the first paper to calculate world distribution for individuals based entirely on household survey data from 91 countries and adjusted for differences in purchasing power parity between the countries measured by the gini index inequality increased from an already very high 63 in 1988 to 66 in 1993 the increase was driven more by rising differences in mean incomes between the countries than by rising inequalities within countries the most important contributors were rising urban rural differences in china and slow growth of rural incomes in south asia compared to several large developed market economies

the effects of location and sectoral components of economic growth on poverty evidence from indonesia abstract in this paper we investigate the relationship between economic growth and poverty reduction by differentiating growth and poverty into their sectoral composition and urban rural location using data from indonesia we find that rural services growth reduces poverty in all sectors and locations however urban services growth has the largest effect on poverty in most sectors finally we also find that rural agriculture growth strongly reduces poverty in rural areas the largest contributor to poverty in indonesia this implies that while agriculture growth in rural areas still plays a major role in reducing poverty policies that enable strong growth in the services sector in both urban and rural areas would expedite poverty reduction

food price changes and household welfare what do we learn from two different approaches the use of a marginal approach can significantly distort the predicted effects of large price variations on monetary welfare over the medium to longer term this paper aims at shedding some light

income inequality development and dependence a reconsideration we reconsider the role of foreign investment in income inequality in light of recent critiques that question the results of quantitative cross national research on foreign capital penetration we analyze an unbalanced cross national data set in which countries contribute different numbers of observations with a maximum of 88 countries and 488 observations dated from 1967 to 1994 random effects regression models that control for unmeasured country heterogeneity are used to investigate effects of foreign capital penetration on inequality measured as the gini coefficient against the background of an internal developmental model of inequality we adapt firebaugh s 1992 1996 critique of the literature on the effect of foreign investment on economic growth to the study of income inequality and find that the stock of foreign direct investment has an effect on inequality that is independent of the mechanisms identified by firebaugh we explore tsai s 1995 claim that the effect of foreign capital penetration is spurious and find that foreign stock has a significant positive effect on inequality net of region specific differences an alternative interpretation of the findings of the foreign investment inequality literature is discussed in light of the discovery of an inverted u shaped relationship between income inequality and foreign investment stock per capita we conclude that thinking on the relationship between income inequality and investment dependence should be revised in light of an investment development path relating the inflow and outflow of foreign capital to economic development

globalization and global inequality assessing the impact of the rise of china and india 1980 20051 this article uses updated purchasing power parity measurements of countries income and a new strategy for approximating global inequality to examine how global income inequality as a combination of increasing average within country inequality and decreasing between country inequality changed in the period 1980 2005 in view of the overwhelming influence of china and india on trends in global inequality change the authors base their strategy on estimating the change in world average within country inequality from change in within country inequality of these two countries the authors find that global inequality decreased continuously throughout the period they also project that global inequality will likely rise again in the next 25 years unless the stellar economic performance of china and india spreads widely to other developing countries

accounting for the recent decline in global income inequality following nearly two centuries of growth global income inequality declined in the last decades of the 20th century to determine the causes of that historic decline we focus on income inequality across nations and find that the major equalizing force is faster than world average income growth in china and south asia industrializing regions where 40 of the world s people live apparently what matters most about economic globalization thus far is its role in the spread of industrialization throughout populous poor regions of the world if so then globalization most likely has reduced global income inequality this decline is anticipated to continue over the next few decades first because of the continued industrialization of poor regions and second because most of the growth in the world s working age population will occur in poor regions

why has economic growth been more pro poor in some states of india than others abstract we use 20 household surveys for india s 15 major states spanning 1960 1994 to study how the sectoral composition of economic growth and initial conditions interact to influence how much growth reduced consumption poverty the elasticities of measured poverty to farm yields and development spending did not differ significantly across states but the elasticities of poverty to urban and rural non farm output varied appreciably and the differences were quantitatively important to the overall rate of poverty reduction states with higher elasticities did not experience higher rates of non farm growth the non farm growth process was more pro poor in states with initially higher literacy higher farm productivity higher rural living standards relative to urban areas lower landlessness and lower infant mortality

introduction to the special issue on the role of nonfarm income in poverty reduction evidence from asia and east africa in this special issue we present seven studies that collectively attempt to investigate the role of non farm income in long term and short term poverty reduction in asia and africa the first four studies out of the seven use long term panel data over two decades in the philippines thailand bangladesh and india these studies show drastic increases in non farm income shares and corresponding declines in poverty levels over time especially in the philippines and thailand education levels of household members and returns to education also increased significantly in these countries the remaining three studies use cross sectional and short term panel data from ethiopia kenya and uganda these african studies show high proportions of poor households and low shares of non farm income that are somewhat comparable to the situation in the 1980s described in the asian studies without the green revolution that provided stable farm income and potential financial resources to invest in children education in asia it is not clear if african farm households can follow the asian examples

estimating the poverty impacts of a prospective doha development agenda this paper summarises the findings from a major international research project on the poverty impacts of a potential doha development agenda it draws on an intensive analysis of the dda framework agreement and associated scenarios the implications for world markets are established using a global modelling framework the outputs of which form the basis for a dozen country case studies of the national poverty impacts of the dda scenarios liberalisation targets under the dda have to be quite ambitious if the round is to have a measurable impact on poverty we expect the near term poverty impacts to be mixed some countries experience small poverty increases and others more substantial poverty declines on balance poverty is reduced under the core dda scenario and this reduction is more pronounced in the longer run deeper cuts in developing country tariffs are found to make the dda more poverty friendly it is also clear that in order to generate significant poverty reductions in the near term complementary domestic reforms are required to enable households to take advantage of the new market opportunities over the long run sustained poverty reduction depends on stimulating economic growth which suggests that trade reforms must go beyond tariffs and subsidies also addressing barriers to services trade and investment

editorial geography of innovation new trends and implications for public policy renewal the aim of this special issue is threefold firstly it highlights major recent methodological advances to address the two key issues referred to above improving extended kpf analyses on the one hand and developing strategic approaches using microeconomic data on the other br br two papers are presented using knowldge production functions kpf they offer new methodologies to deal with the issue of regional heterogeneity when estimating kpf at the regional level in europe br br using more microeconomic approaches three papers contribute to the second topic they use micro economic data to show how firms strategies may interact with the local environment and impact upon the determinants of agglomeration dynamics br br secondly this issue draws attention to interesting new results emerging from the application of these new methodologies to the analysis of innovation dynamics in european regions and shows how they can help one to revisit some main tenets of received wisdom concerning the rationale and impact of public policies on the geography of innovation br br finally this special issue also identifies issues that still require further research particularly in relation to the development of new methodologies for the evaluation of public policies integrating the spatial dimension and the interdependencies between public policies implemented at different regional scales which remains no more than an emerging field in the geography of innovation br br the special issue concludes with a paper presenting a new theoretical framework for the analysis and evaluation of local innovation public policies using simulation methodology all these papers have important policy implications

rent seeking and surplus destruction in unanimity bargaining abstract in non cooperative bargaining games in the tradition of rubinstein the proposer s bargaining power stems from the prospect of a delay in case of disagreement since players are impatient this delay is costly for everyone we consider a unanimity bargaining game in which the proposer can strategically choose the length of this delay we assume that the size of the surplus depends endogenously on the chosen length of the prospective delay intuitively the proposer faces the following trade off the more he exploits his proposer power the smaller is the surplus that can be divided one interpretation is that aggressive bargaining tactics hurt the fruitful cooperation among players and thus the surplus we characterize stationary equilibrium strategies and payoffs and obtain sharp predictions on the extent of surplus destruction the size of the social loss and the surplus allocation

striking for a bargain between two completely informed agents this paper models the wage contract negotiation procedure between a union and a firm as a sequential bargaining process in which the union must decide in each period whether or not to strike for the duration of that period we show that there exist subgame perfect equilibria in which the union engages in several periods of strikes prior to reaching a final agreement although both parties are completely rational and fully informed this has implications for other inefficient phenomena such as tariff wars debt negotiations and wars in general we characterize the set of equilibria show that strikes can occur in real time and discuss extensions of the model such as lockouts and the possibility of multiple recontracting opportunities copyright 1991 by american economic association

inequality among world citizens 1820 1992 this paper investigates the distribution of well being among world citizens during the last two centuries the estimates show that inequality of world distribution of income worsened from the beginning of the 19th century to world war ii and after that seems to have stabilized or to have grown more slowly in the early 19th century most inequality was due to differences within countries later it was due to differences between countries inequality in longevity also increased during the 19th century but then was reversed in the second half of the 20th century perhaps mitigating the failure of income inequality to improve in the last decades jel d31 f0 n0 o0

urban economic structure technological externalities and intensive land use in china based on theories about the influences of urban economic structure on intensive land use this study analyses the impacts of two main types of urban economic structure in china specialized economy and diversified economy on intensive urban land use using spatial panel techniques and large scale urban panel data the results indicate that there is significant spatial correlation in urban economic structure as well as intensive land use in every city a diversified economy has a significant positive effect on the improvement of intensive land use whereas the effect of a specialized economy is not significant the effects of the diversified and specialized economies on intensive land use through technological externalities are either negative or positive depending on city size while the threshold effect the minimum threshold population for the economy to stimulate intensive land use is about 496 700 people for the specialized economy and about 546 000 people for the diversified economy

estimating the relative benefits of agricultural growth on the distribution of expenditures does the sectoral composition of aggregate economic growth affect poverty we ask whether agricultural growth in developing countries increases the expenditures of poorer households more than growth in other sectors while some reduced form analyses have tackled this question using either country level time series data regional panel data for one country or cross sectional country data this paper is unusual in using panel data for many countries we improve on much of the existing literature by devising an instrumental variables strategy to correct for the endogeneity of sectoral gdp growth involving averaging over sectoral income growth rates for neighboring countries our principal finding from our instrumental variable estimator is that the estimated elasticities associated with growth in agricultural income are significantly greater than for non agricultural income for all but the extreme top and bottom deciles in the middle range of the income distribution the effect of a given gdp growth due to agriculture is 3 4 times larger than if it was due to non agricultural activities having established that on average growth in gdp originating in agriculture is more beneficial for poorer deciles we finally explore whether this is a pattern which holds across different groupings of countries a second important finding is that there is heterogeneity across some groupings most particularly we find that it is the poorest people in the poorest countries for whom agricultural income growth is the most beneficial

where do the poor live this paper argues that the distribution of global poverty has changed and that most of the world s poor no longer live in countries officially classified as low income countries lics it is estimated that the majority of the world s poor or up to a billion people live in middle income countries mics this pattern is largely as a result of the recent graduation into the mic category of a number of populous countries the paper discusses the trends in the distribution of global poverty and opens a wider discussion on the potential implications for aid and development cooperation

the race between man and machine implications of technology for growth factor shares and employment we examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks in which labor has a comparative advantage can be created in a static version where capital is fixed and technology is exogenous automation reduces employment and the labor share and may even reduce wages while the creation of new tasks has the opposite effects our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new tasks if the long run rental rate of capital relative to the wage is sufficiently low the long run equilibrium involves automation of all tasks otherwise there exists a stable balanced growth path in which the two types of innovations go hand in hand stability is a consequence of the fact that automation reduces the cost of producing using labor and thus discourages further automation and encourages the creation of new tasks in an extension with heterogeneous skills we show that inequality increases during transitions driven both by faster automation and introduction of new tasks and characterize the conditions under which inequality is increasing or stable in the long run

trade liberalization in the bio economy coping with a new landscape multilateral trade liberalization has made little progress over the last period but preferential agreements have multiplied recent economic literature helps understand the current negotiation game new economic and political conditions in particular the gaining influence of emerging countries make a multilateral agreement more difficult developed countries have given up many of their bargaining chips in previous rounds of negotiation and their remaining agricultural tariffs are not sufficient for extracting the concessions from emerging countries on services procurement and intellectual property that would make an agreement possible the risk of a more fragmented world calls for a revised negotiation agenda and a change in the status of developing countries research issues are outlined in order to help revitalize the doha negotiation agenda

divergence in india income differentials at the state level 1970 97 abstract we examine india s regional disparities in economic performance between 1970 97 our preliminary analysis shows that in absolute terms initially poorer states grew at slower rates than initially wealthier ones and that there is also evidence of increasing dispersion of income levels across the states our econometric analysis investigates the possibility of club convergence and conditional convergence although we do not find evidence of the former we can suggest some of the factors associated in the latter our research also indicates that the onset of economic policy reform in 1991 significantly intensified growth differentials between the states

global income inequality this paper presents a non technical summary of the current state of debate on the measurement and implications of global inequality inequality between citizens of the world it discusses the relationship between globalization and global inequality it shows why global inequality matters and proposes a scheme for global redistribution

inequality in a global perspective the basic story of global inequality in the last three decades has been an overall decline but one which is composed of quite intricate patterns there has been a decline in between country inequality as china and india have grown relative to the us and other rich countries this has been accompanied by an increase in within country inequality but this is itself composed of rising inequality in some countries such as china india and the us and declining inequality in other countries including large economies in latin america section ii of the paper reviews these patterns highlighting country diversity to make the central point that policy matters section iii addresses a normative question what relative weight should be given to within country and between country inequality in making an overall global assessment this section brings on board recent philosophical discourse including on inequality of opportunity in a global frame section iv returns to the policy matters theme and takes up global constraints on national redistribution policy in a globalized world for example a race to the bottom on taxation to attract and keep capital and talent and possible global institutional responses to alleviate these constraints

global income distribution from the fall of the berlin wall to the great recession we present an improved panel database of national household surveys between 1988 and 2008 in 2008 the global gini index is around 70 5 having declined by approximately 2 gini points china graduated from the bottom ranks changing a twin peaked global income distribution to a single peaked one and creating an important global median class 90 of the fastest growing country deciles are from asia while almost 90 of the worst performers are from mature economies another winner was the global top 1 hence the global growth incidence curve has a distinct supine s shape with gains highest around the median and top

implications of higher global food prices for poverty in low income countries in many poor countries the recent increases in prices of staple foods raise the real incomes of those selling food many of whom are relatively poor while hurting net food consumers many of whom are also relatively poor the impacts on poverty will certainly be very diverse but the average impact on poverty depends upon the balance between these two effects and can only be determined by looking at real world data results using household data for ten observations on nine low income countries show that the short run impacts of higher staple food prices on poverty differ considerably by commodity and by country but that poverty increases are much more frequent and larger than poverty reductions the recent large increases in food prices appear likely to raise overall poverty in low income countries substantially

the complex dynamics of smallholder technology adoption the case of sri in madagascar this article explores the dynamics of smallholder technology adoption with particular reference to a high yielding low external input rice production method in madagascar we present a simple model of technology adoption by farm households in an environment of incomplete financial and land markets we then use a probit model and symmetrically censored least squares estimation of a dynamic tobit model to analyze the decisions to adopt expand and disadopt the method we find that seasonal liquidity constraints discourage adoption by poorer farmers learning effects both from extension agents and from other farmers exert significant influence over adoption decisions

estimating consumer demands across the development spectrum maximum likelihood estimates of an implicit direct additivity model abstract this paper characterizes consumer demand patterns across the development spectrum using elasticity estimates from a demand system possessing non linear engel effects demands for six broadly defined goods are then projected under the assumption that per capita expenditure growth rates differ across the development spectrum such projections illustrate the extent to which non linear income effects generate more plausible demand responses estimated marginal budget shares for food decline in a logistical manner and range from about 0 5 for ethiopia to less than 0 05 for the usa engel elasticities for food range from 0 95 for ethiopia to less than 0 1 for the usa

what do we know about global income inequality in this paper we review the recent literature on global interpersonal income inequality while all estimates agree that the level is very high with a gini of between 0 630 and 0 686 in the 1990s there is no consensus regarding the direction of change we discuss methodological issues including the use of national accounts versus survey based estimates of mean income or consumption and the choice of purchasing power parity exchange rates findings of a rise or fall in global income inequality are not robust across different estimation methods and datasets given the diversity of estimates and various sources of uncertainty including gaps and errors in the underlying data we conclude there is insufficient evidence to determine the direction of change in global interpersonal inequality in recent decades