family income and child health in the uk recent studies examining the relationship between family income and child health in the uk have produced mixed findings we re examine the income gradient in child general health and its evolution with child age in this country using a very large sample of british children we find that there is no correlation between income and child general health at ages 0 1 that the gradient emerges around age 2 and is constant from age 2 to age 17 in addition we show that the gradient remains large and significant when we reduce the endogeneity of income furthermore our results indicate that the gradient in general health reflects a greater prevalence of chronic conditions among low income children and a greater severity of these conditions taken together these findings suggest that income does matter for child health in the uk and may play a role in the intergenerational transmission of socioeconomic status

the causal effect of family income on child health in the uk recent studies examining the effect of family income on child health have been unable to account for the endogeneity of income using data from a british cohort study we address this gap by exploiting exogenous variation in local labour market characteristics to instrument for family income we estimate the causal effect of family income on different measures of child health and explore the role of potential transmission mechanisms we find that income has a very small but significant causal effect on subjective child health and no significant effect on chronic health conditions apart from respiratory illnesses using the panel structure we show that the timing of income does not matter for young children moreover our results provide further evidence that parental health does not drive a spurious relationship between family income and child health our study implies that financial transfers are unlikely to deliver substantial improvements in child health

an economic approach to the study of the relationship between housing hazards and health the case of residential fuel poverty in france abstract the impact of housing hazards on health outcomes is becoming a major issue especially given the recent and on going reviews of energy legislation in many european countries a large body of epidemiological literature argues that fuel poverty a frequently debated example of a housing hazard involving low indoor temperatures is associated with heightened health risks by using a large scale nationally representative dataset i seek in this article to delve into this alleged association and uncover a causal relationship between fuel poverty and self assessed health coming from an economics standpoint i used a panel approach based on an instrumental fixed effects model which allow me to analyse causality i used both objective and subjective fuel poverty indicators the results show that there is a significant causal relationship between fuel poverty and self assessed health status the estimated causality is exacerbated when subjective fuel poverty indicators are used the results also show that the negative impact of fuel poverty on health is deferred meaning that fuel poverty takes time to manifest itself in terms of poor health in policy terms this study adds to the debate on investing in housing energy efficiency schemes to reduce fuel poverty and thereby improve health outcomes it also lends support to the argument according to which improving housing conditions to curb fuel poverty is a lever for reducing pubic expenditures on health care

the armed peace a punctuated equilibrium theory of war according to a leading rationalist explanation war can break out when a large rapid shift of power renders unbelievable a rising state s promise to compensate its declin ing opponent causing the latter to attack preventively this mechanism does not provide a complete and coherent explanation of war because it does not specify how inefficient fighting resolves this commitment problem we present a complete information model of war as a sequence of battles and show that although opportunities for a negotiated settle ment arise throughout the very desirability of peace creates a commitment problem that undermines its likelihood because players have incentives to settle as soon as possible they cannot credibly threaten to fight long enough if an opponent launches a surprise at tack this decreases the expected duration and costs of war and causes mutual deterrence to fail fighting s sheer destruction improves the credibility of these threats by decreasing the benefits from continuing the war equilibrium fighting may involve escalating costs that exceed the value of the stakes by the time peace is negotiated and that leave both players worse off than when the war began

fuel poverty in the uk is there a difference between rural and urban areas abstract fuel poverty is a significant policy issue an argument often made is that rural households are more likely to be fuel poor due to the nature of rural housing stock and the more limited choice of energy sources in rural areas this paper uses panel data to compare the level and dynamics of fuel poverty in rural and urban areas of the uk in addition to descriptive analysis discrete hazard models of fuel poverty exit and re entry are estimated and used to assess the influence of housing and personal characteristics on the time spent in fuel poverty the results indicate that on average the experience of fuel poverty in urban areas is longer with a higher probability of fuel poverty persistence however on average the rural fuel poor appear more vulnerable to energy price increases while living in private accommodation or a flat increases their probability of remaining fuel poor relative to their urban counterparts these results indicate policy effectiveness may differ across rural and urban space however they also emphasise the limits of spatial targeting monitoring the dynamics of fuel poverty is important for ensuring that policy targets are effective and reaching those most in need

the scope and limits of financial liberalisation in developing countries a critical survey this article reviews the growing literature on financial reform in developing countries we draw both on the theoretical contributions outlining the case for and against liberalisation as well as on the experience of many developing countries with liberalisation we argue that the existence of market failures in financial markets hampers the liberalisation process and indeed suggests that the simple liberalising strategy envisaged in much of the literature is inappropriate we argue instead for an alternative strategy which integrates some aspects of liberalisation with the development of appropriate financial institutions designed to serve best the needs of the real economy

a model of ethnic conflict we present a model of conflict in which discriminatory government policy or social intolerance is responsive to various forms of ethnic activism including violence it is this perceived responsiveness captured by the probability that the government gives in and accepts a proposed change in ethnic policy that induces individuals to mobilize in support for their cause yet mobilization is costly and demonstrators have to be compensated accordingly individuals have to weigh their ethnic radicalism with their material well being to determine the size of their money contribution to the cause our main results are i a one sided increase in radicalism or in population size increases conflict ii a one sided increase in income has ambiguous effects depending on the elasticity of contributions to income iii an increase in within group inequality increases conflict and iv an increase in the correlation between ethnic radicalism and inequality also increases conflict

bargaining and learning while fighting much of the existing formal work on war models the decision to go to war as a game ending costly lottery this article relaxes this assumption by treating war as a costly process during which the states run the risk of military collapse the model also allows for uncertainty over either the cost of fighting or the distribution of power the analysis makes four contributions to the growing costly process literature i the present model provides a more general treatment of the learning process that occurs when states are uncertain about the distribution of power ii it explicitly compares the bargaining and learning processes for the two different sources of uncertainty iii it suggests a way to empirically distinguish wars arising from these two sources and iv it shows that the equilibrium dynamics of informational accounts of war may be quite sensitive to the underlying bargaining environment through which information is conveyed

alliances in the shadow of conflict victorious alliances often fight about the spoils of war this article presents an experiment on the determinants of whether alliances break up and fight internally after having defeated a joint enemy first if peaceful sharing yields an asymmetric rent distribution this increases the likelihood of fighting in turn anticipation of the higher likelihood of internal fight reduces the alliance s ability to succeed against the outside enemy second the option to make nonbinding nonaggression declarations between alliance members does not make peaceful settlement within the alliance more likely third higher differences in the alliance players contributions to alliance effort lead to more internal conflict and more intense fighting

the determinants of private saving in india abstract this paper examines the determinants of private saving in the process of economic development in the light of the indian experience it is found that the saving rate rises with both the level and the rate of growth of disposable income the real interest rate on bank deposits has a significant positive impact but the magnitude of the impact is modest public saving seems to crowd out private saving but less than proportionately furthermore the spread of banking facilities in the economy and the inflation rate have a positive impact and changes in the external terms of trade a negative impact on private saving

information power and war ultimatum bargaining models of international interactions suggest that when conflict is costly and the actors are fully informed the probability of conflict goes to zero however conflict occurs with some positive probability when the challenger is uncertain about the defender s reservation value i employ a simple ultimatum game of bargaining to evaluate two traditional power centric theories of world politics balance of power and power transition theory the formal and empirical analyses demonstrate that as states approach power parity information asymmetries are greatest thus enhancing the probability of militarized conflict uncertainty is a central cause of conflict emergence and is correlated with the distribution of observable capabilities recognizing the relationship between the distribution of power and the uncertainty offers a more sophisticated interpretation of power centric explanations of world politics

the power to hurt costly conflict with completely informed states according to common explanations of war since war is costly and risky rational states have incentives to strike a bargain and avoid conflict war is then the result of private information about capabilities or resolve and incentives to misrepresent this information or inability to make credible commitments fearon 1995 this article presents another rationalist explanation which does not depend on either of these mechanisms by modeling warfare as a costly bargaining process the paper demonstrates that inefficient fighting can occur in equilibrium under very general assumptions favoring peace specifically it is assumed that peace can be supported in equilibrium and that fighting brings no benefits to either state only costs despite the fact that there exist many agreements that pareto dominate the final settlement states are unable to agree to them and fighting can occur in equilibrium the equilibrium is driven by the ability of states to impose costs on their opponent and bear costs the power to hurt the opponent establishes a range of acceptable settlements and the existence of such a range makes inefficient equilibria possible the article suggests that 1 states may fight if they believe that seeking peace means accepting an unpalatable settlement and 2 a diminished ability to hurt the enemy is a major reason for war termination historical examples are provided to illustrate these results

aggregate spending and the terms of trade is there a laursen metzler effect this paper investigates the spending and current account effects of terms of trade shifts in a model where households maximize utility over an infinite planning period in the framework developed here an economy specialized in production must experience a fall in aggregate spending and a current surplus as a result of an unanticipated permanent worsening in its terms of trade the paper s model thus provides a setting in which the current account deficit predicted by laursen and metzier harberger and others fails to materialize

explaining differences in the domestic savings ratio across countries a panel data study this article seeks to analyse the major determinants of differences in the domestic savings ratio between countries using panel data for 62 countries over the period 1967 95 a basic distinction is made between the determinants of the capacity to save and the willingness to save the capacity to save depends primarily on the level of per capita income but non linearly and the growth of income the life cycle hypothesis and the empirics strongly support these hypotheses the willingness to save is assumed to depend on financial variables such as the rate of interest the level of financial deepening and inflation we find no support for a positive interest rate effect but strong support for the level of financial deepening measured by the ratio of quasi liquid liabilities to gdp inflation exerts a mild positive effect on saving but soon turns negative total saving may also depend on tax effort but a surprisingly strong negative relation is found between the ratio of tax revenue to gdp and the domestic savings ratio

the determinants of mortality mortality rates have fallen dramatically over time starting in a few countries in the 18th century and continuing to fall today in just the past century life expectancy has increased by over 30 years at the same time mortality rates remain much higher in poor countries with a difference in life expectancy between rich and poor countries of also about 30 years this difference persists despite the remarkable progress in health improvement in the last half century at least until the hiv aids pandemic in both the time series and the cross section data there is a strong correlation between income per capita and mortality rates a correlation that also exists within countries where richer better educated people live longer we review the determinants of these patterns over history over countries and across groups within countries while there is no consensus about the causal mechanisms we tentatively identify the application of scientific advance and technical progress some of which is induced by income and facilitated by education as the ultimate determinant of health such an explanation allows a consistent interpretation of the historical cross country and within country evidence we downplay direct causal mechanisms running from income to health

the terms of trade and the current account the harberger laursen metzler effect the paper examines the effect of terms of trade changes on a small country s spending and current account assuming optimizing behavior in an intertemporal framework with perfect international capital mobility a temporary future terms of trade deterioration implies a deterioration improvement of the trade balance whereas a permanent terms of trade deterioration has an ambiguous effect depending on the rate of time preference nominal and real variables are considered via exact price indexes two periods and an infinite horizon are examined

peace war and the balance of power every possible relation between the distribution of power and the likelihood of war has been defended somewhere in the literature on international politics war is least likely if power is distributed equally war is least likely if power is distributed unequally and the distribution of power has no effect on the likelihood of war i try to settle this dispute by examining the effect of expectations about the outcome of war on the choice between war and negotiation i argue that each of these mutually contradictory propositions can be derived from some plausible set of premises and thus that which one is correct depends on which set of premises best describes a situation the most important factors affecting the relation between the distribution of power and the likelihood of war are 1 whether the terms of a compromise agreement that might be accepted in lieu of war affect the distribution of power between the antagonists and therefore the probability that the agreement will be enforced and 2 how many states interests will be affected by the outcome

does france have a fuel poverty trap abstract in this article we focus on fuel poverty dynamics by answering two questions does france have a fuel poverty trap and what are the determinants of staying in or moving out of fuel poverty first we define three states into which individuals may be placed which are as follows the non fuel poverty state the fuel poverty state and the severe fuel poverty state second we use a mover stayer model that divides the population into the following two types of individuals those who remain in the same state during the observation period the stayers and those who move across states the movers this model applies to longitudinal data from mainland france showing that fuel poverty is not an absorbing state indeed a majority of the fuel poor and the severely fuel poor move to another better state therefore we can argue that france has no fuel poverty trap using two econometric models logit and multinomial logit we identify the stability and mobility determinants in different states as expected there is a relationship between income and the likelihood of an individual remaining in a particular state furthermore poor housing implies a greater likelihood of stability in fuel poverty or severe fuel poverty another result is that deterioration in fuel poverty status seems to stem more from difficult financial situations than from bad dwelling conditions

socioeconomic status and child health why is the relationship stronger for older children case lubotsky and paxson 2001 show that the well known relationship between socio economic status ses and health exists in childhood and grows more pronounced with age however in cross sectional data it is difficult to distinguish between two possible explanations the first is that low ses children are less able to respond to a given health shock the second is that low ses children experience more shocks we show using panel data on canadian children that 1 the gradient we estimate in the cross section is very similar to that estimated previously using u s children 2 both high and low ses children recover from past health shocks to about the same degree and 3 that the relationship between ses and health grows stronger over time mainly because low ses children receive more negative health shocks in addition we examine the effect of health shocks on math and reading scores we find that health shocks affect test scores and future health in very similar ways our results suggest that public policy aimed at reducing ses related health differentials in children should focus on reducing the incidence of health shocks as well as on reducing disparities in access to palliative care

quantifying the prevalence of fuel poverty across the european union abstract the literature and policy base for fuel poverty in the uk and ireland is well established and there is a growing body of single country studies beyond these two eu member states for example brunner et al 2012 dubois 2012 robine et al 2008 however on a european level the last analysis of fuel poverty was conducted in 2004 prior to the enlargement of the eu using survey data this paper presents an updated overview of the prevalence of european fuel poverty in the context of the accession of numerous former social states and rising fuel prices analysis reveals the phenomenon of fuel poverty is occurring across the eu with particularly high levels of fuel poverty found in eastern and southern european states it is argued that there are both eu and national policy frameworks in place that address climate change and these could be used as a starting point for countries to address fuel poverty through improved domestic energy efficiency measures this paper reflects research undertaken in 2011 supported by eaga charitable trust within the umbrella of work examining issues of poverty and social exclusion across the eu which has enabled access to the eu silc dataset

military coercion in interstate crises in an international crisis states make demands backed by threats to use force although these threats can be explicit in diplomatic communications they will not generally carry much weight unless substantiated by some show of force military measures designed to convey the commitment to resort to arms if one s demands are not satisfactorily met to have an impact this commitment must be credible it must be in one s interest to carry out the threat if the opponent refuses to comply in an environment where states possess private information about their valuations capabilities or costs credibility can be established by actions that a state unwilling to fight would not want or would not dare to take military moves such as arms buildups troop mobilizations and deployments to the potential zone of operations can alter incentives in a crisis by changing one s expected payoff from the use of force these are tacit bargaining moves that can restructure the strategic context thereby creating and possibly signaling one s commitments while undermining those of the opponent how can states use the military instrument to establish commitments and how does the nature of the instrument affect their ability to communicate them credibly to their adversaries there are two distinct mechanisms for credible signaling in economic models information can be transmitted reliably by sinking costs actors burn money to reveal that they value the disputed issue even more in contrast theories of interstate crisis bargaining usually rely on choices that increase the difference between backing down and fighting actors tie their hands by running higher risks of war to reveal their resolve the first mechanism involves costs that actors pay regardless of outcome and the second involves costs that actors pay only if they fail to carry out some threat or promise

objective and subjective measures of fuel poverty as energy prices continue to rise to reflect the real cost of carbon the numbers of households in fuel poverty is increasing rapidly this paper uses a unique data set to explore one alternative measure of fuel poverty based on whether consumers feel able to afford their energy similar to one introduced by the government a few years ago we explore the links between an expenditure based and our subjective measure of fuel poverty and compare these differences with those between official measures amongst low income households 28 spent more than a tenth of their income on energy in the home and so would be likely to qualify as fuel poor under the most usual definition but only 16 felt unable to afford sufficient energy to keep their homes warm amongst this group who felt they had difficulty in affording sufficient energy less than half were expenditure fuel poor the paper argues that reintroduction of a self reported measure by the government would be a valuable aid to policy development

wealthier is healthier we estimate the effect of income on health using cross country timeseries data on health infant and child mortality and life expectancy and income per capita we use instrumental variables estimates using exogenous determinants of income growth to identify the pure income effect on health isolated from reverse causation or incidental association the long run income elasticity of infant and child mortality in developing countries lies between 0 2 and 0 4 using these estimates we calculate that over a half a million child deaths in the developing world in 1990 alone can be attributed to the poor economic performance in the 1980s

life cycle individual thrift and the wealth of nations this paper provides a review of the theory of the determinants of individual and national thrift that has come to be known as the life cycle hypothesis lch of saving applications to some current policy issues are also discussed part i deals with the state of the art on the eve of the formulation of the lch some 30 years ago part ii sets forth the theoretical foundations of the model in its original formulation and later amendment calling attention to various implications distinctive to it and sometimes counter intuitive it also includes a review of a number of crucial empirical tests both at the individual and the aggregate level part iii reviews some applications of lch to current policy issues though only in sketchy fashion as space constraints prevent fuller discussion this abstract was borrowed from another version of this item

saving behaviour under imperfect financial markets and the current account consequences the authors seek to establish the general empirical importance of investment motivated saving their hypothesis is that inadequate financial intermediation will induce agents to save more in order to undertake lumpy physical investment in the future the result is a positive relationship between the degree of capital market imperfection and the size of the private saving rate a simulation exercise calibrated on taiwan found a close match between the simulated and actual data regression analysis established that the private saving rate was negatively related to the level of financial market sophistication copyright 1994 by royal economic society

on the power of indicators how the choice of fuel poverty indicator affects the identification of the target population in light of the creation of the eu energy poverty observatory epov in january 2018 and the increase in debates on how fuel poverty is measured we propose a critical analysis of fuel poverty indi

bargaining and fighting the impact of regime type on war onset duration and outcomes recent research suggests that democracies have advantages and disadvantages in wars democracies are more likely to win the wars they initiate and the ones in which they are targeted wars initiated by democracies are also uniformly shorter and less costly than wars initiated by nondemocracies however democracies are also less likely to continue fighting and less likely to win as war drags on democracies are also particularly likely to be targeted we present a bargaining model that reconciles these divergent findings the model explains why democracies are more likely to win but are also more likely to settle and more likely to be targeted than other types of regimes the model s explanation of these facts differs in important ways from existing explanations the model also suggests several new hypotheses relating regime type to the terms of settlement and the onset of war

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

growth and saving among individuals and households the lifecycle theory of saving and consumption predicts that changes in an economy s rate of economic growth will affect its aggregate saving rate by changing the lifetime resources of younger people relative to older people however studies that track the saving behavior of cohorts of household heads over time as they age have yielded estimates of age saving profiles that are too flat for growth to have much effect on the aggregate saving rate one problem with the cohort approach is that multigenerational households are common in many counties and the age saving profiles of households may be quite different from the age saving profiles of individuals that make up households in this paper we propose a method for estimating individual age saving profiles using household data this method is applied to data from taiwan and thailand we find that the individual method yields results that are more favorable to the lifecycle model these results imply that changes in the rate of economic growth may in som

multi battle contests abstract we study equilibrium in a multistage race in which players compete in a sequence of simultaneous move component contests players may win a prize for winning each component contest as well as a prize for winning the overall race each component contest is an all pay auction with complete information we characterize the unique subgame perfect equilibrium analytically and demonstrate that it exhibits endogenous uncertainty even a large lead by one player does not fully discourage the other player and each feasible state is reached with positive probability in equilibrium pervasiveness expected effort in the component contests may be non monotonic in the closeness of the race and realized individual effort may exceed the value of the prize by a factor that is proportional to the maximum number of stage victories required

the determinants of household and private savings in thailand a broad set of possible determinants of household and private savings behaviour is examined through an in depth case study of thailand during the period 1960 to 2004 results suggest that an increase in economic growth inflation and terms of trade all have a significant positive impact on household and private saving rates in contrast the availability of bank credit tends to reduce household and private saving rates while an increase in both old and young dependency has a negative impact on household and private saving rates the magnitude of the impact on the former is far greater than that on the latter furthermore public saving seems to crowd out household and private saving but less than proportionately this reflects a possible role of fiscal policy in increasing national savings in the economy over and above these variables corporate saving is another important determinant of household saving an increase in the former brings about a significant reduction in the latter

health income and relative deprivation evidence from the bhps it is believed that income affects health directly but it is argued that indirect income effects due to relative deprivation may be equally important this paper investigates these relationships using parametric and semiparametric panel data models which ameliorate problems of misspecification and unobservable heterogeneity by allowing for a flexible functional form of income we ensure that coefficients on relative deprivation variables are not an artefact of a highly non linear relationship between health and income the results provide strong evidence for the impact of income on self reported measures of health for men and women these results are robust across a range of techniques and are resilient to the inclusion of measures of relative deprivation the parametric results for relative deprivation largely reject its influence on health although there is some evidence of an effect in the semiparametric models

institutions and savings in developing and emerging economies domestic savings are an important prerequisite for capital formation and growth in this paper we analyze a new channel through which institutions influence aggregate savings and economic development whereas research in the field of savings decisions concentrates largely on the level of the individual the literature on institutions and growth as well as on aggregate savings formation focuses on the aggregate national level first we develop a framework that brings together both lines of reasoning arguing that institutions may influence the individual savings decision as well as national savings in aggregate this potential for institutional quality to influence economic performance has been neglected so far second we build upon the empirical literature on aggregate savings formation and provide results supporting our hypothesis that better economic institutions drive aggregate savings formation upwards by contrast we do not find such effects in the case of the political environment our findings are robust when checked against a number of changes in explanatory variables estimation methods and the treatment of instruments

rationalist explanations for war realist and other scholars commonly hold that rationally led states can and sometimes do fight when no peaceful bargains exist that both would prefer to war against this view i show that under very broad conditions there will exist negotiated settlements that genuinely rational states would mutually prefer to a risky and costly fight popular rationalist and realist explanations for war fail either to address or to explain adequately what would prevent leaders from locating a less costly bargain essentially just two mechanisms can resolve this puzzle on strictly rationalist terms the first turns on the fact that states have both private information about capabilities and resolve and the incentive to misrepresent it the second turns on the fact that in specific strategic contexts states may be unable credibly to commit to uphold a mutually preferable bargain historical examples suggest that both mechanisms are empirically plausible

savings of the elderly and desired bequests cross section data often show that the wealth of the elderly increases with age even at advanced ages these and other results suggest that the life cycle hypothesis of consumption should be augmented to include a bequest motive for saving in this paper the author proposes a model of bequests and a test for a bequ est motive using panel data he finds that over a ten year period the elderly in the data set dissaved in contradiction to most cross section results the test offers no support for a bequest motive copyright 1987 by american economic association

data base for development analysis data base for development analysis an overview the paper provides an overview of the situation with respect to the quality and comparability of data commonly used in development analysis a section each is devoted to a discussion of macroeconomic i e national income and its components savings and investment exports and imports data demography population life expectancy fertility and mortality nutrition and health labour force employment and unemployment poverty and income distribution validation and cross checking of data from different sources the discussion is illustrated with examples drawn mainly from india the paper concludes with a set of recommendations for the improvement of data

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

what drives private saving around the world the authors investigate the policy and non policy factors behind saving disparities using a large panel data set and an encompassing approach including several relevant determinants of private saving they extend the literature in several dimensions by 1 using the largest data set on aggregate saving assembled to date 2 using panel instrumental variable techniques to correct for endogeneity and heterogeneity 3 performing robustness checks on changes in estimation procedures data samples and model specification their main empirical findings a private saving rates show considerable inertia are highly serially correlated even after controlling for other relevant factors b private sector rates rise with the level and growth rate of real per capita income so policies that spur development are in indirect but effective way to raise private saving rates c predictions of the life cycle hypothesis are supported in that dependency ratios generally have a negative effect on private saving rates d the precautionary motive for saving is supported by the finding that inflation conventionally taken as a summary measure of macroeconomic volatility has a positive impact on private saving holding other facts constant e fiscal policy is a moderately effective tool for raising national saving f the direct effect of financial liberalization are largely detrimental to private saving rates greater availability of credit reduces the private saving rate financial depth and higher real interest rates do not increase saving

causal parameters and policy analysis in economics a twentieth century retrospective the major contributions of twentieth century econometrics to knowledge were the definition of causal parameters within well defined economic models in which agents are constrained by resources and markets and causes are interrelated the analysis of what is required to recover causal parameters from data the identification problem and clarification of the role of causal parameters in policy evaluation and in forecasting the effects of policies never previously experienced this paper summarizes the development of these ideas by the cowles commission the response to their work by structural econometricians and var econometricians and the response to structural and var econometrics by calibrators advocates of natural and social experiments and by nonparametric econometricians and statisticians this paper considers the definition and identification of causal parameters in economics and their role in econometric policy analysis it assesses different research programs designed to recover causal parameters from data at the beginning of this century economic theory was mainly intuitive and empirical support for it was largely anecdotal at the end of the century economics has a rich array of formal models and a high quality database empirical regularities motivate theory in many areas of economics and data are routinely used to test theory many economic theories have been developed as measurement frameworks to suggest what data should be collected and how they should be interpreted econometric theory was developed to analyze and interpret economic data most econometric theory adapts methods originally developed in statistics the major exception to this rule is the econometric analysis of the identification problem and the companion analyses of structural equations causality and economic policy evaluation although an economist did not invent the phrase correlation does not imply causation 1 economists clari

healthy bodies and thick wallets the dual relation between health and economic status there is abundant evidence of a quantitatively large association between many measures of economic status including income and wealth and a variety of health outcomes such as mortality or morbidity however considerable and often heated debate remains especially across disciplines about the direction of causation and about why the association arises although medical scientists are often convinced that the dominant if not exclusive pathway is that variation in socioeconomic status produces health disparities they are increasingly debating among themselves about why low economic status might lead to poor health at least for modern industrial countries 1 the old standby arguments the less well to do have access to less or lower quality medical care or a stronger pattern of deleterious personal behaviors have been rejected as insufficient instead a series of intriguing competing theories have arisen that emphasize long term impacts of early childhood or even inter uterine environmental factors the cumulative effects of prolonged exposures to individual stressful events or reactions to macro societal factors such as rising levels of income inequality a common link is that each theory attempts to document the physiological processes through which low economic status leads to poorer health while these scientific questions are extremely important this research has taken place with little input from economists economists are now making contributions about the alternative pathway the impact poor health may have on economic resources poor health may restrict a family s capacity to earn income or to accumulate assets by limiting work or by raising medical expenses at a minimum this work should provide a caution against exaggerating the magnitude of causation from economic status to health outcomes but the potential contribution runs deeper as people age the evolving variation in individual health outcomes may offer additional statistical information to estimate parameters of household savings and consumption behavior that so far have proven to be somewhat elusive thus incorporating health uncertainty and risk into economic models should eventually enrich our understanding of basic tenets of household behavior the first section of this paper documents the size of the association between health and one prominent economic status measure household wealth section two deals with how health influences economic status by sketching out reasons why health may alter household savings and eventually wealth and then providing estimates of the empirical magnitude of these effects section three shifts attention to the alternative pathway the links between economic status and health and summarizes 2major controversies and evidence surrounding these issues

do intergovernmental organizations promote peace a basic debate in world politics involves the impact of intergovernmental organizations igos on international conflict liberals functionalists and others see igos as capable of transforming global anarchy while realists emphasize the essential irrelevance of igos in managing such fundamental processes as war and peace recent quantitative studies also yield disparate conclusions depending on particular econometric assumptions implying variously that igos foster pacific relations among states have no impact on dispute behavior or even increase dispute propensity at least part of the problem is a lack of theoretical and empirical specificity the authors apply bargaining theory to develop a middle path between the realist and liberal perspectives only some igos those with security mandates and the most sophisticated institutional structures are likely to influence dispute behavior the authors combine the theory with two improvements in research design first igos vary in capability mandate and cohesion the authors construct a dataset of igo institutional heterogeneity and member cohesiveness second states join igos for reasons that are not unrelated to why states fight the authors control for the level of international involvement among countries and find support for their arguments in initial tests

saving in developing countries theory and review in the literature on economic development much of the interest in saving has been focused on the relation between saving and growth but saving is not only about accumulation it is about smoothing consumption in the face of volatile and unpredictable income and helping to ensure the living standards of poor people whose lives are difficult and uncertain this paper develops a model of households which cannot borrow but which accumulate assets as a buffer stock to protect consumption when incomes are low such households dissave as often as they save do not accumulate assets over the long term and have on average very small asset holdings but their consumption is markedly smoother than their income much of the evidence is as consistent with this view of saving as it is incosistent with standard views of smoothing over the life cycle and with explanations of the link between saving and growth in terms of life cycle saving behavior consumption smoothing is also a useful way of thinking about government policy where volatility in the world prices of taxed commodities can generate sharp fluctuations in government revenues as well as reallocations of revenue between the private and public sectors many important policy issues in developing countries hinge on issues of consumption and smoothing and research on these issues is currently likely to be more productive than work on the relation between saving and growth

household saving behaviour in an extended life cycle model a comparative study of china and india abstract this paper examines the determinants of household saving in china and india over the last few decades using the life cycle model with appropriate modifications to account for the expected benefits of pension saving consistent with the predictions made in the life cycle model higher income growth promotes more household saving and higher age dependency does the opposite an increase in the inflation rate appears to encourage household saving interestingly the evidence suggests that an increase in expected pension benefits tends to discourage household saving in china in the long run but the reverse is found in india

why are latin america s savings rates so low an international comparative analysis abstract this paper presents a theoretical and empirical assessment of the determinants of savings rates with special emphasis on latin american savings rates the study is based on international comparisons using data from 36 countries for 1970 1992 a distinction is made between private and public savings the later are endogenously determined by economic and political variables per capita income growth is the most important determinant of private and public savings public savings are lower in countries with higher political instability public savings crowd out private savings but less than proportionately low latin american savings are due to the magnitudes of their determinants rather than structural differences

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society

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