money and capital abstract the effects of money anticipated inflation on capital formation is a classic issue in macroeconomics previous papers adopt reduced form approaches putting money in the utility function or imposing cash in advance but using otherwise frictionless models we follow instead a literature that tries to be explicit about the frictions making money essential this introduces new elements including a two sector structure with centralized and decentralized markets stochastic trading opportunities and bargaining these elements matter quantitatively and numerical results differ from findings in the reduced form literature the analysis also reduces a gap between microfounded monetary economics and mainstream macro

on the practical limits to substitution abstract this paper considers the arguments for weak vs strong sustainability the weak sustainability position held by many mainstream neoclassical economists such as solow and weitzman is that almost all kinds of natural capital can be substituted by man made capital the contrary position known as strong sustainability holds that many of the most fundamental services provided by nature cannot be replaced by services produced by humans or man made systems the paper discusses the limits of substitution from a physical point of view it concludes that while there is considerable scope for substitution in some domains the limits to substitutability in the medium term at least are real and important in effect the paper supports the strong sustainability position

value chain dynamics settlement trajectories and regional development fold n value chain dynamics settlement trajectories and regional development regional studies global value chain gvc analysis has little to say about the interaction between regions and global chain dynamics however recent calls to address broader development issues have resulted in efforts to incorporate a spatial dimension in gvc analysis addressing this issue the paper argues that gvc analysis needs to be combined with the examination of livelihoods at settlement level livelihood diversification or lack thereof indicates particular settlement trajectories that constitute regional development pathways it is also suggested that the understanding of how regions are shaped by value chain dynamics will improve by adding elements from global production network gpn theory to the combined methodology namely by an examination of territorial embeddedness and value creation enhancement capture distribution at settlement level

is the entropy law relevant to the economics of natural resource scarcity abstract nicholas georgescu roegen and herman daly have argued that the entropy law imposes an absolute resource scarcity which cannot be overcome with technological change exploration or substitution on the contrary this paper argues that their critique is fundamentally flawed the pessimistic scenario requires a concept of materials entropy which is highly problematic materials entropy cannot be defined independently of technology and it is impossible to aggregate over different types of materials to meaningfully talk about available versus unavailable matter in the aggregate failing a concept of materials entropy the critique fails since the earth is not closed with respect to energy

agroindustrialization globalization and international development an overview of issues patterns and determinants this paper offers an overview for a special issue on agroindustrialization globalization and international development it sets out a conceptual framework for understanding the links among these three broad phenomena and then discusses emerging issues and evidence concerning the factors conditioning agroindustrialization in developing countries and the subsequent effects on employment poverty and the natural environment we conclude with a research agenda

choosy search and the mismatch of talents this article proposes a multi sector matching model where workers have symmetric sector specific skills and the search market is segmented by sector workers choose the range of markets they are willing to participate in i identify a composition externality workers do not take into account the impact of their choice on sector specific mean productivity among the pools of job seekers consequently workers prospect too many market segments and there is room for public policy even when the so called hosios condition holds

entropy limits to growth and the prospects for weak sustainability in this paper we analyze the consequences of mass and energy conservation and the second law of thermodynamics for economic activity in contrast to former studies we deduce our results formally from a general model of production and consumption we show that in a static setting for economies containing irreversible processes a non zero resource input as well as non zero emissions are necessary to sustain a positive level of consumption we generalize this result to a dynamic setting and apply it to the growth discussion and the sustainability discourse thereby we show that limits to growth of production and consumption are likely to exist and that the concept of weak sustainability is either morally unattractive or physically infeasible d 2005 elsevier b v all rights reserved

upgrading primary production a global commodity chain approach abstract global commodity chain gcc analysis has been concerned mainly with examining power relations in global manufacturing industries although it has been preoccupied increasingly by the question of how developing country dc producers can upgrade this paper extends gcc analysis to traditional primary commodities where international traders exercise the driving role and suggests a new agenda for their upgrading in dcs based upon public action

money as the mechanism of exchange abstract the existence and use of money remained an embarrassing puzzle for monetary analysis we observe over man s history that social groups without generally accepted media of exchange exhibit poor survival characteristics most social groups do not use assets or commodities at random in the execution of exchanges one observes that a small subset of assets is dominantly used in transactions these transaction dominating assets are usually referred to as money the literature contains many suggestive attempts to explain the emergence and role of money the classic writers made passing references in somewhat pictorial language to the extension markets and increasing labor productivity induced by the use of a general medium of exchange this idea has never been systematically developed however karl brunner 1971

a reexamination of the role of thermodynamics for environmental economics abstract as the discussion about the role of thermodynamics in environmental economics has not led to a conclusion yet a more fundamental approach seems to be necessary which also takes into consideration the relationship between economics and the natural sciences in general to this end value theory is chosen as a starting point because it is the centerpiece of every economic theory it is shown that neoclassical environmental economics suffers from serious deficiencies because of its value concept heedlessly copied from classical mechanics thermodynamics can be expected to be helpful to redress these defects because the economy can be thought of as a dissipative structure dependent on its environment the obvious way to integrate thermodynamics consists in the formulation of thermodynamic constraints to complement neoclassical environmental economics but this approach remains unsatisfactory because the neoclassical mechanical hardcore is incompatible with the entropy law and its implications evidently the neoclassical paradigm and its value concept have to be given up but the alternative of the energy theory of value must be rejected because its determinism cannot be reconciled with the richness of human behaviour as thermodynamic analogies offer no solution either there is a dilemma between the necessity and the apparent impossibility of adequately integrating thermodynamic concepts it turns out that a normative inconsistency is responsible which is due to the demand for intergenerational justice therefore the integration of thermodynamics into environmental economics hinges on a meta economic value decision if sustainability is adopted as the guiding principle the insights of thermodynamics call for a macro economic environmental policy setting absolute limits to the economy but this macro policy is incompatible with neoclassical economics so that a social reconstruction of economics based on a social theory of value becomes necessary in sum thermodynamics is important for environmental economics besides fulfilling a general heuristic function it also fulfils a decisive conceptual and an analytical function insofar as it helps to justify sustainability and to operationalize macro economic environmental policy

which way is up in upgrading trajectories of change in the value chain for south african wine summary global value chain gvc analysis uses the concept of upgrading to highlight paths for developing country firms to move up the value chain usually through the lenses of four categories product process functional and inter sectoral upgrading the implicit normative expectation is that these firms move toward producing higher value added products and or take on more sophisticated functions along a value chain in this article upgrading is approached more broadly as reaching a better deal including a balance between rewards and risk the case study of south african wine shows that better product quality improved processes and some functional upgrading have co existed with processes of downgrading higher risks and limited rewards especially in traditional export markets a reflection on further conceptual development and directions for empirical research is also provided

a search theoretic approach to monetary economics the essential function of money is its role as a medium of exchange the authors formalize this idea using a search theoretic equilibrium model of the exchange process that captures the double coincidence of wants problem with pure barter one advantage of the framework described here is that it is very tractable the authors also show that the model can be used to addre ss some substantive issues in monetary economics including the potenti al welfare enhancing role of money the interaction between specializat ion and monetary exchange and the possibility of equilibria with multip le fiat currencies copyright 1993 by american economic association

economics and sustainability balancing trade offs and imperatives the concept of sustainability has been increasingly invoked in scholarly and public policy debates discussion has been hampered however by uncertainty and lack of uniformity in the meaning of sustainability this paper seeks to identify some common ground among economists ecologists and environmen tal ethicists two issues seem salient require ments for intergenerational and the defi nition of social capital to be provided to future generations a concept of safe minimum standard which has received at least some recognition in the ecology philosophy and eco nomics literatures may provide the beginnings of a common ground for debate about sus tainability jel q2

the extraction of natural resources the role of thermodynamic efficiency abstract the modelling of production in microeconomics has been the subject of heated debate the controversial issues include the substitutability between production inputs the role of time and the economic consequences of irreversibility in the production process a case in point is the use of cobb douglas type production functions which completely ignore the physical process underlying the production of a good we examine these issues in the context of the production of a basic commodity such as copper or aluminium we model the extraction and the refinement of a valuable substance which is mixed with waste material in a way which is fully consistent with the physical constraints of the process the resulting analytical description of production unambiguously reveals that perfect substitutability between production inputs fails if a corrected thermodynamic approach is used we analyze the equilibrium pricing of a commodity extracted in an irreversible way we force consumers to purchase goods using energy as the means of payment and force the firm to account in terms of energy the resulting market provides the firm with a form of reversibility of its use of energy under an energy numeraire energy resources will naturally be used in a more parsimonious way

generalized search theoretic models of monetary exchange abstract virtually all simple search models of money assume agents with money cannot produce and so everyone has either 0 or 1 units of money in steady state we alternatively assume agents can always produce and simply restrict money inventories to 0 or 1 this seems better for many issues for example in the standard model it is difficult to interpret increases in the money supply because increasing the fraction of agents holding money decreases the economy s productive capacity our model avoids these problems and thus delivers more natural and simpler implications in many contexts we compare results on existence multiplicity and welfare across models

the latte revolution regulation markets and consumption in the global coffee chain abstract coffee is a truly global commodity and a major foreign exchange earner in many developing countries the global coffee chain has changed dramatically as a result of deregulation new consumption patterns and evolving corporate strategies from a balanced contest between producing and consuming countries within the politics of international coffee agreements power relations shifted to the advantage of transnational corporations a relatively stable institutional environment where proportions of generated income were fairly distributed between producing and consuming countries turned into one that is more informal unstable and unequal through the lenses of global commodity chain analysis this paper examines how these transformations affect developing countries and what policy instruments are available to address the emerging imbalances

toward a theory of international currency we use the framework of random matching games and develop a two country model of the world economy in which two national currencies compete and may be circulated as media of exchange there are multiple equilibria which differ in the areas of circulation of the two currencies in one equilibrium the two national currencies are circulated only locally in another one currency is circulated as an international currency there is also an equilibrium in which both currencies are accepted internationally we also find an equilibrium in which the two currencies are directly exchanged we first characterize the existence conditions of these equilibria in terms of the relative country size and the degree of economic integration and then use an evolutionary approach to equilibrium selection to explain the evolution of the international currency as the two economies become more integrated some welfare implications are also discussed for example a country can improve its national welfare by letting its own currency circulate internationally provided the domestic circulation is controlled for when the total supply is fixed however a resulting currency shortage may reduce the national welfare

money as a medium of exchange in an economy with artificially intelligent agents abstract we study the exchange economies of kiyotaki and wright 1989 in which agents must use a commodity or fiat money as a medium of exchange if trade is to occur our agents are artificially intelligent and are modeled as using classifier systems to make decisions in the assignment of credit within the classifier systems we introduce some innovations designed to study sequential decision problems in a multi agent environment for most economies that we have simulated trading and consumption patterns converge to a stationary nash equilibrium even if agents start with random rules in economies with multiple equilibria the only equilibrium that emerges in our simulations is the one in which goods with low storage costs play the role of medium of exchange i e the fundamental equilibrium of kiyotaki and wright

materials capital direct indirect substitution and mass balance production functions a foundation is provided for a correct and accurate analysis of the relationship between monetary values and physical dimensions in economic production a distinction is proposed between direct and indirect substitution linked to this a classification is offered of various types of substitutability and complementarity relationships between production factors it is argued that the neoclassical production function may be consistent with mass balance but is unsuitable for a detailed and accurate understanding of changes in production that influence materials use for this purpose general production functions satisfying mass balance are formulated drawing upon the proposed classifications

pairwise credit in search equilibrium pairwise extension of credit is introduced into the barter search economy previously analyzed by the author the penalty for failure to repay a debt is modeled as the end of trading opportunities since credit availability makes access to trade more valuable there may be multiple equilibrium credit limits since the credit limit affects the implicit interest rate and the stock of inventories it is necessary to check the net impact of the credit limit on the incentive to repay in a calculated example with lumpy credit availability multiple equilibria are very common with a greater credit limit associated with a lower implicit interest rate with smooth credit availability no multiple equilibria were found surprisingly credit can break the no production equilibrium

on money as a medium of exchange we analyze economies in which individuals specialize in consumption and production and meet randomly over time in a way that implies that trade must be bilateral and quid pro quo nash equilibria in trading strategies are characterized certain goods emerge endogenously as media of exchange or commodity money depending both on their intrinsic properties and on extrinsic beliefs there are also equilibria with genuine fiat currency circulating as the general medium of exchange we find that equilibria are not generally pareto optimal and that introducing fiat currency into a commodity money economy may unambiguously improve welfare velocity acceptability and liquidity are discussed

a theory of a generally acceptable medium of exchange and barter abstract this paper develops a model that accounts both for the existence of money defined as a generally acceptable medium of exchange and for the survival of some barter exchange in economies in which money exists in contrast to jones 1976 seminal article in which individuals are restricted to fix trading strategies before entering the market the present model assumes that individuals have conditional trading strategies that allow them to effect exchange according to the types of trades they encounter in the market the analysis shows how decentralized market forces generate money and lead to a unique level of monetization

environmental constraints and sigmoid utility implications for value risk sensitivity and social status abstract friedman and savage journal of political economy 4 1948 279 proposed sigmoid utility theory to model the relationship between social class and risk sensitivity their proposal has not been explicitly modeled to allow for full testing of the concept we argue that sigmoid utility arises naturally from boundary conditions imposed by finite environmental resources that engender competition we also present a sigmoid formulation and examine its empirical warrant by considering economic data from anthropological historical and sociological cases studies standard risk sensitivity measures such as arrow pratt and downside risk aversion provide expectations for which individuals are most risk prone insights from prospect theory indicate under what conditions sigmoid utility may be most useful we consider the implications of environmental constraint in the context of the sigmoid model as an explanation for the nature of political turmoil during the collapse of maya civilization ca ad 850 we consider the role lack of constraint played in the american revolution and we explore how sigmoid utility can enrich our understanding of contemporary american voting behavior

existence of steady states with positive consumption in the kiyotaki wright model we prove the general existence of steady states with positive consumption in an n goods and fiat money version of the kiyotaki wright model by admitting mixed strategies we also show that there always exists a steady state in which everyone accepts a least costly to store object in particular if fiat money is one such object then there always exists a monetary steady state we also establish some other properties of steady states and comment on the relationship between steady states and incentive feasible allocations

sorting versus screening search frictions and competing mechanisms in a market where sellers compete by posting trading mechanisms we allow for a general search technology and show that its features crucially affect the equilibrium mechanism price posting prevails when meetings are rival i e when a meeting by one buyer reduces another buyer s meeting probability under price posting buyers reveal their type by sorting ex ante only if the meeting technology is sufficiently non rival price posting is not an equilibrium multiple buyer types then visit the same sellers who screen ex post through auctions

sustainability and growth when manufactured capital and natural capital are not substitutable abstract a two sector neoclassical growth model of manufactured capital and natural capital is used in examining the importance of factor substitution to the issues of sustainability and economic growth analytical conclusions are established on the sustainability of the stocks of natural capital and manufactured capital as well as on the importance of factor substitution to the issues of technical progress and recycling policy and welfare implications of the analysis are also discussed

a model of pairwise credit a model of credit as a pairwise activity is studied in a random matching model where there are no social sanction mechanisms the model depicts some prevalent features of credit arrangements even though there are no informational asymmetries and the price of credit is determined competitively there is credit rationing the credit relationships are also longlasting the introduction of credit into a barter economy does not necessarily increase the welfare of debtors

a contribution to the pure theory of money abstract this article analyzes a general equilibrium model with search frictions and differentiated commodities because of the many differentiated commodities barter is difficult in that it requires a double coincidence of wants and this provides a medium of exchange role for fiat currency we prove the existence of equilibrium with valued fiat money and show it is robust to certain changes in the environment rate of return dominance liquidity and the welfare implications of fiat money are discussed

a regulatory framework for a policy of sustainability lessons from the neo liberal school abstract in this paper targets institutions and policy measures for describing and implementing sustainable development are evaluated in terms of their conformity with the economic framework of a market system from the viewpoint of neo liberal economic thinking as conceived by the german freiburg school of economists a general set of criteria is developed it includes issues of operationalization and legitimation of goals as well as institutional and instrumental issues on this basis general rules for designing an ecological framework guaranteeing the greatest possible degree of conformity with a market system are derived the concrete application of these rules leads to recommendations for a policy of sustainability with respect to the setting of goals the establishment of institutions as well as the use of appropriate instruments

the second law the fourth law recycling and limits to growth abstract despite counter examples in nature it has been argued that total recycling is impossible for an industrial society as a consequence of the second law of thermodynamics in this paper it is shown that there is no such limitation however it is also shown that there must be a large stockpile of inactive materials as well as an exogenous source of exergy e g from the sun for a stable steady state recycling system to function the paper also discusses briefly some of the implications for economic growth

gender and forced labour understanding the links in global cocoa supply chains this paper investigates the gendered patterns and dynamics of labour exploitation and forced labour in the cocoa supply chain the empirical basis of our analysis is an original primary dataset pro

sustainability analysis of a society based on exergy studies a case study of the island of samso denmark abstract the danish island samso has since 1997 initiated a process through which the island should reach a state where it would be able to supply its own energy such a situation was reached since 2005 after having established 21 windmills and the island is now a net exporter of electricity to the danish power network at the same time the buildings in the more habituated areas were connected to 4 district heating plants which generate heat from combustion of straw in some cases combined with supplementary inputs from photo thermal devices meanwhile certain activities on the island such as running the ferries cars factories and heating in more distant areas are still dependent on significant input of fossil fuels the inhabitants have recently stated a wish to move on towards being independent of fossil fuels in 2030 and carbon neutral during the next decades as a consequence the idea came up to develop a method for the sustainability analysis of a society which would assist in governing the transitional process in the direction of increasing sustainability therefore a framework has been developed based on the concept exergy that may reveal where large consumptions are taking places such areas are likely to be sensible targets for action or at least increased attention basic methods have been developed that allows to account for infrastructure transfers inputs and outputs and consumption in terms of exergy and taking into account whether the exergy storages or flows can be considered to be renewable or not the framework has been developed for six societal sectors the energy sector the public sector the private households the agricultural sector the industry commerce and trade sector and nature nature is here considered an activity that provides the society with an exergy that may also be of value to our societies often referred to as ecosystem services based on the estimated amount of infrastructure and transfers inputs and outputs a number of sustainability indicators have been developed that may be monitored over time and which may serve to indicate whether potential measures undertaken also lead the society in the right direction an attempt to evaluate the potential importance of wastes has also been carried out as in organic waste could play an important role in acquiring the amount of bio diesel required to run the ferries in the future the results demonstrate that the already existing overhead in production of electricity leaves the island with many options and a great opportunity to be independent of fossil fuels in near future in fact it might well be that socio economical perspectives will turn out to be the more severe obstacles in the transition process adjacent to this work a carbon model has also been set up to reveal the consequence of proposed measures and strategies to the carbon budget of the island jorgensen and nielsen 2014