public pensions unemployment insurance and growth abstract we develop an overlapping generations model that highlights the interaction between an unfunded pension program and an unemployment insurance program in the presence of a labor market with union wage setting both programs are financed by earmarked proportional wage taxes levied on firms and their employees the equilibrium path entails endogenous growth and involuntary unemployment the presence of spillovers between pension programs and unemployment insurance programs has striking implications for growth policy efficiency issues and the transition to a fully funded pension system

on optimal non linear taxation and public good provision in an overlapping generations economy abstract using the self selection approach to tax analysis within an olg framework the paper examines optimal non linear labour and capital income taxation and the provision of a durable public good under endogenous wages the marginal tax rules depend on the influence of the tax instruments on self selection and on the income earning abilities of the households in particular we found that production inefficiency occurs in the model justifying capital income taxation for the public good the paper derives a dynamic analogue of the second best samuelson rule encompassing both inter and intragenerational redistributive considerations furthermore the usual conditions guaranteeing the efficiency of the first best samuelson rule are not sufficient in the present model

taxing capital not a bad idea after all we quantitatively characterize the optimal capital and labor income tax in an overlapping generations model with idiosyncratic uninsurable income shocks and permanent productivity difierences of households the optimal capital income tax rate is signiflcantly positive at 36 percent the optimal progressive labor income tax is roughly a at tax of 23 percent with a deduction of 7 200 relative to average household income of 42 000 the high optimal capital income tax is mainly driven by the life cycle structure of the model whereas the optimal progressivity of the labor income tax is attributable to the insurance and redistribution role of the tax system jel e62 h21 h24

a positive theory of social security based on reputation we construct a general equilibrium model in which a pay as you go social security system can be adopted and sustained as a political and economic equilibrium we alalyze the welfare implictions of this system and compare general equilibrium welfare measure to the commonly used notion of actuarial fairness

optimal capital income taxation with incomplete markets borrowing constraints and constant discounting for a wide class of infinitely lived agent models chamley has shown that the optimal capital income tax rate is zero in the long run lucas has argued that for the u s economy there is a significant welfare gain from switching to this policy this paper shows that for the bewley class of models with incomplete insurance markets and borrowing constraints the optimal tax rate on capital income is positive even in the long run therefore cutting the capital income tax to zero may well lead to welfare losses

agency conflict and corporate strategy the effect of divestment on corporate value among the various stakeholders of a firm senior managers are the most likely targets for private and public political pressures other stakeholder groups are less visible and may be perceived as less influential in corporate strategy formulation and implementation in some situations consequently senior executives may adopt corporate strategies in response to political pressures even if these strategies may be costly to shareholders in this study a special case is examined the effect of divestment of south african business units on firm value using data from 1984 through 1990 we examine the impact that announcements of divestments have upon the stock return behavior of publicly traded firms our results indicate that significant and negative excess returns accrue to shares of companies announcing divestments of south african operations these results are supportive of the premise that noneconomic pressures may influence managerial strategies rather than value enhancement goals 1997 by john wiley sons ltd

engel s law diet diversity and the quality of food consumption increasing income brings about a decline in the relative importance of food consumption a wider spread of spending patterns and a demand for higher quality goods using an index number approach this article analyzes these three closely related tendencies stripping out the impact of prices from the dispersion of food expenditures gives a volume based measure of diet diversity that is relevant for nutrition using unpublished data from the world bank s international comparison program for 31 items of food in more than 150 countries we find that diets of rich countries are substantially more diverse than those of the poor and that volumes are the more appropriate way to measure the inequality of diversity the quality of the food basket based on the luxury necessity distinction of consumption increases with income but the elasticity is small there is a modest tendency for the structure of prices to be regressive since prices of luxuries relative to necessities are lower in richer countries additionally our diversity and quality measures are shown to have implications for demand analysis and well being

the money pump as a measure of revealed preference violations we introduce a measure of the severity of violations of the revealed preference axioms the money pump index mpi the mpi is the amount of money one can extract from a consumer who violates the axioms it is also a statistical test for the hypothesis that a consumer is rational when behavior is observed with error we present an application using a panel data set of food expenditures the data exhibit many violations of the axioms mostly the mpi for these violations is small the mpi indicates that the hypothesis of consumer rationality cannot be rejected

selfish bakers caring nurses a model of work motivation abstract work contributes to people s self image in important ways we propose a model in which effort is unobservable and where individuals have a preference for being important to others this gives the following predictions 1 if a worker s effort is paid by his marginal productivity bakers effort is just like in the standard model 2 if a worker s wage is unaffected by his effort nurses more effort is provided than in the standard model 3 to prevent that shirkers become nurses nurses wages must be kept strictly lower than bakers income at this wage level there will be too few nurses 4 overinvestment in nursing equipment can be justified as a means to attract motivated nurses 5 even with full income compensation both nurses and bakers may experience a net utility loss when losing their job 6 similarly both nurses and bakers may prefer work to welfare even with full income compensation

distributional effects of public education in an economy with public pensions we study how the allocation of government expenditures between two major outlays education and pay as you go social security affects human capital distribution in an economy with heterogeneous agents we consider an overlapping generations economy where the government maintains both programs and allocates tax revenues to finance them in our model human capital is one of the factors of production it is itself produced as a combined result of public inputs and private inputs parents decisions to invest time and material resources in education of their children are motivated by altruism heterogeneous in its strength across the population which leads to heterogeneity of incomes we investigate the effect of an increase in public funding for education on the human capital distribution we show that in this framework contrary to some earlier results increased spending on public education may lead to higher inequality our results depend crucially on the interaction of education funding with the social security budget and on the elasticity of substitution in the learning technology

retailing public goods the economics of corporate social responsibility abstract this paper explores the feasibility and desirability of corporate social responsibility csr we identify csr with creation of public goods or curtailment of public bads using a model with profit maximizing firms the paper shows that there is a direct parallel between csr and traditional models of private provision of public goods indeed firms that use csr will produce public goods at exactly the same level as predicted by the standard voluntary contribution equilibrium for public goods we compare csr with government provision and charitable provision discussing when csr by private for profit firms could have a comparative advantage in dealing with public goods provision

optimal taxation in life cycle economies abstract we use a very standard life cycle growth model in which individuals have a labor leisure choice in each period of their lives to prove that an optimizing government will almost always find it optimal to tax or subsidize interest income the intuition for our result is straightforward in a life cycle model the individual s optimal consumption work plan is almost never constant and an optimizing government almost always taxes consumption goods and labor earnings at different rates over an individual s lifetime one way to achieve this goal is to use capital and labor income taxes that vary with age if tax rates cannot be conditioned on age a nonzero tax on capital income is also optimal as it can imperfectly mimic age conditioned consumption and labor income tax rates journal of economic literature classification numbers e62 h21

a quantitative analysis of capital income taxation this paper studies the quantitative impact of eliminating capital income taxation on capital accumulation and steady state welfare in a general equilibrium model with overlapping generations of sixty five period lived individuals who face idiosyncratic earnings risk borrowing constraints and life span uncertainty under a wide range of parameter configurations the capital income tax rate that maximizes steady state welfare is positive even though eliminating it completely would raise the steady state capital stock toward the golden rule this is because the tax burden is shifted toward the younger and liquidity constrained years reducing the individuals ability to self insure copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the persistence of social strategies under increasing competitive pressure abstract in this paper we study the long run outcome if firms are repeatedly matched to play a n firm cournot oligopoly game and can select their type of business objective firms can either be profit maximizing or socially concerned also pursuing consumer welfare we use an indirect evolutionary approach to distinguish between the endogenous profit maximizing choice of the firms business objectives and their corresponding market behavior our main result is that the prospects of long run survival of firms pursuing social strategies strongly depends on the number of firms in the industry if a social strategy entails higher marginal production costs it is best suited if the number of firms in the industry is not too large in particular we demonstrate that the relation between long survival and the level of competitiveness of the industry is inverse u shaped we confirm this result by using the concept of coalition stability and further show that if a high number of firms adopt a social strategy welfare might be lower than with just profit maximizing firms

are food choices really habitual integrating habits variety seeking and compensatory choice in a utility maximizing framework given the large number of food choices that consumers make each day it seems likely that they will adopt decision strategies that minimize cognitive effort to examine this issue we develop a conceptual and empirical model of habitual choice and the factors that result in transitions to two strategies other than habitual selection utility maximizing choice and a variety seeking strategy our approach provides an alternative to traditional state dependence methods used in this type of panel data we apply this framework to the choice of two food products that illustrate the heterogeneity across types of products in decision strategies and routine choice patterns copyright 2013 oxford university press

the intergenerational state education and pensions allocation is inefficient when generations overlap this failure can be mitigated by properly designed social arrangements we show that public financing of education and public pensions can be designed to implement an intergenerational transfer scheme supporting the complete market allocation neither the public financing of education nor the pension scheme we consider resemble standard ones in our mechanism via the public education system the young borrow from the middle aged to invest in human capital they pay back the debt via a social security tax the proceedings of which finance pension payments when the complete market allocation is achieved the rate of return implicit in this borrowinglending scheme should equal the market rate of return

redistributive taxation in a simple perfect foresight model abstract we investigate the redistributive potential of capital taxation in an intertemporal maximizing model of capital formation first even unanticipated redistributive capital taxation is severely limited in its effectiveness since it depresses wages second under any convergent redistributive tax policy which maximizes a paretian social objective the capital income tax will converge to zero independent of the factor supply elasticities these results are independent of workers holdings of capital

measuring rationality with the minimum cost of revealed preference violations abstract we introduce a new measure of how close a set of choices is to satisfying the observable implications of rationality and apply it to a large balanced panel of household level consumption data this new measure the minimum cost index is the minimum cost of breaking all revealed preference cycles found in choices from budget sets unlike existing measures of rationality it responds to both the number and severity of revealed preference violations

equity and efficiency effects of redistributive policies abstract how do various forms of redistribution affect the distributions of earnings and consumption and their intergenerational mobility do redistributive policies enhance efficiency by mitigating market imperfections or do they create a trade off between equity and efficiency to address these issues a dynamic general equilibrium model is constructed and solved numerically the effects of the degrees of targeting of money transfers and educational transfers and the relative performance of the two types of transfers are examined

self interest and public funding of education abstract the objective of this paper is to study whether publicly funded education can emerge as a political and economic equilibrium in an overlapping generations economy in which selfish agents vote for public funding of education the presence of complementarities between capital and labor in the production function implies that by improving the skills of next period s workers public funding of education increases the return on capital as a result savers will support a publicly financed education system in order to enhance their future income a version of the model calibrated using u s data generates large shares of gnp allocated to education hence the non altruistic incentive to support public education is quantitatively important

how demanding is the revealed preference approach to demand a well known problem with revealed preference methods is that when data are found to satisfy their restrictions it is hard to know whether this should be viewed as a triumph for economic theory or a warning that these conditions are so undemanding that almost anything goes this paper allows researchers to make this distinction our approach uses an axiomatic characterization of a measure of predictive success due to selten 1991 we illustrate the idea using a panel dataset the results show that this approach can lead us to radically reassess our view of the empirical performance of economic theory

bidding behavior and decision costs in field experiments i introduction positive opportunity costs of mental effort may invalidate the predictions of traditional models of rational or hyperrational agents conlisk 1996 uses deliberation costs as a recurring theme when discussing four important reasons for incorporating bounded rationality in economic models smith and walker 1993 and smith and szidarovszky 1999 present effort models that predict individual behavior will more closely match the predictions of rational behavior theories as 1 the stakes of the decision increase and 2 the decision costs decrease smith and walker 1993 find evidence of these two effects in a comprehensive review of 31 published laboratory experiments camerer and hogarth 1999 extend smith and walker s survey by examining 74 experimental papers and find evidence in favor of the cognitive effort theory noting that higher levels of incentives have the largest effects in judgment and decision tasks p 34 although the laboratory evidence is compelling there has been little verificati on of these predictions outside the laboratory 1 the present article fills this gap by examining field data from 214 multiunit sports card auctions carried out in an active marketplace on the floor of a sports card show we auctioned four types of trading cards with book values ranging from 3 to 70 providing significant variation in the stakes of the auction our auctions also included two distinct types of subjects some auctions had sports card dealers bidding against each other whereas others had individual card collectors as the participants this variation allows us to explore the second dimension of decision cost theory do dealers who commonly participate in sports card auctions and therefore likely require less effort to bid optimally bid more rationally than nondealers our measure of rational bidding comes from multiunit auction theory which predicts strategic demand reduction in uniform price auctions 2 for each type of bidder and each type of card we measure this demand reduction behavior in the uniform price auction relative to a control the multiunit vickrey 1961 auction where bidders are predicted to fully reveal their demands our sports card data generated from sales of 428 cards with a combined book value of nearly 10 000 provide two major insights first we find that the predicted strategic behavior is considerably greater when the auctioned cards have higher values second dealers exhibit more of the predicted strategic behavior than do nondealers for both lower and higher priced cards one conjecture to explain this finding is that nondealers may find that the cognitive effort required to bid strategically exceeds the benefits especially for low valued cards by contrast dealers have more experience with auctions and make their living by buying selling trading cards so their cognitive costs are likely much lower than those of nondealers these two findings are consistent with recent theoretical models of monetary rewards and decision costs and extend previous experimental evidence from the laboratory into the field ii experimental design as mentioned recent theoretical literature has suggested that demand reduction inherent in uniform price auctions with multiunit demand can induce inefficient allocations and possible reductions in auction revenue to avoid the inefficiencies associated with the uniform price auction theorists have identified an alternative mechanism the generalized vickrey auction which gives bidders a dominant strategy of revealing their true valuations for all units of the good in this multiunit vickrey auction as in the uniform price auction each bidder can submit up to n different sealed bids on individual units and the highest n bids are declared winners if a bidder submits one or more of the winning bids his or her price for the first unit equals the highest rejected bid submitted by someone else and his or her price for the kth unit equals the kth highest of the rejected bids submitted by others

who is more rational we report on the results of a large scale field experiment that enables us to test for consistency with utility maximizing behavior and to investigate the correlation between individual behavior and demographic and economic characteristics we conducted the experiment with the centerpanel a representative sample of over 2 000 dutch households using procedures similar to those used by choi et al 2007b in a setting with risk we find a high level of consistency in the individual level decisions there is also considerable heterogeneity in subjects consistency scores high income and high education subjects display greater levels of consistency men are more consistent than women and young subjects are more consistent than those who

estimation of the depreciation rate of physical and r d capital in the u s total manufacturing sector i introduction numerous studies on production and cost the sources of productivity and endogenous growth have recognized the pivotal role of the physical capital stock studies at various levels of aggregation over assets and industries have emphasized the crucial role of investment in plant and equipment in the growth of demand and productive capacity it is clearly recognized by economists and policymakers that knowledge capital approximated by rd 1986 to measure the depreciation rates of the stock of rd 1980 in the literature on dynamic demand models such an approach was first adopted by epstein and denny 1980 and more recently by kollintzas and choi 1985 for a single capital good and on a theoretical level in bernstein and nadiri 1987a 1987b the paper is organized as follows the specification of the model is presented in section ii section iii is devoted to a discussion of the data and to the presentation of the parameter estimates of the model in section iv we present the empirical results for the depreciation rates for physical and r d capital and compare them with those reported in the literature we compare the physical capital stock estimates generated by our model with the official capital stock estimates produced by u s department of commerce bureau of economic analysis in this section we also present our estimates of the decomposition of gross investment into replacement and expansion investment for both physical and r d capital these decompositions are important from the vantage point of public policy analysis

finite lifetimes and growth abstract in this paper we study the long run growth property of overlapping generations models it is shown that in one sector models with convex technologies the asymptotic growth rate must be zero this results because the young do not have sufficient income to purchase a large capital stock thus a policy of income redistribution to the young can generate growth even if financed by income taxation additionaly it is shown that two sector models and one sector models with nonconvex technologies are consistent with growth

the efficiency gains from dynamic tax reform this paper presents a new simulation methodology for determining the pure efficiency gains from tax reform along the general equilibrium rational expectations growth path of life cycle economies the principal findings concern the effects of switching from a proportional income tax with rates similar to those in the u s to either a proportional tax on consumption or a proportional tax on labor income a switch to consumption taxation generates a sustainable welfare gain of almost 2 percent of lifetime resources in contrast a transition to wage taxation generates a loss of greater than percent of lifetime re sources a second general result is that even a mild degree of progressivity in the income tax system imposes a very large efficiency cost this abstract was borrowed from another version of this item

not in my community social pressure and the geography of dismissals we investigate the impact of local social pressure on firms firing decisions using linked employer employee data we show that secondary establishments located further away from headquarters have higher dismissal rates than those located closer the effect of distance on dismissals is stronger the greater the visibility of the firm in the local community of its headquarters and the larger the degree of selfishness of that community we show that these findings can be explained by the social pressure exerted by the communities where firms headquarters are located which induces ceos to refrain from dismissing at short distance from their headquarters

on the optimal taxation of capital income abstract we show that in models in which labor services are supplied jointly with human capital the chamley and judd result on zero capital income taxation in the limit extends to labor taxes as long as accumulation technologies are constant returns to scale moreover for a class of widely used preferences consumption taxes are zero in the limit as well however we show by the construction of two examples that these results no longer hold for certains types of restrictions on tax rates or if there are profits generated journal of economic literatureclassification numbers e62 h21

do the poor pay more for food evidence from the united kingdom does food cost more for low income households this paper compares two well known approaches to answering this question i find that quantity discounts for a broad range of foods are statistically significant and economically important however quantity discounting does not lead to the poor paying more for food i find that the poor pay less than average for the food they purchase this is explained by the poor spending a greater share of their income on foods where quantity discounting occurs copyright 2010 oxford university press

optimal taxation in a life cycle model we extend deaton s atemporal optimal commodity tax model to a life cycle envi ronment in which the individual may choose to work in many periods we are able to con firm the corlett hague intuition goods that are more complementary with leisure should be taxed at higher rates in addition we prove that in the microeconomic framework under lying some popular general equilibrium models if real wage and interest rates are constant over the life cycle the addition of some interest taxation to a consumption tax regime would be welfare improving and that optimal labour tax rates decline with age

income and ir rational food choice abstract increasing affluence is associated with increases in the variety and diversity of consumers diets while this relationship likely reflects a heightened ability of consumers to satisfy unique preferences it is also possible that higher income and food expenditure are associated with more preference instability as the relative cost of a mistake falls with income this paper shows that the ability to detect preference instability increases with income in an empirical application involving almost 540 000 food choices by almost 60 000 people 47 committed at least one preference reversal the odds a preference reversal are 1 8 2 5 times higher for individuals who spend at least 160 week on food at home away from home compared to individuals who spend less than 20 week individuals who commit preference reversals are less likely to rate price and are more likely to rate novelty as important food values

revealed preference rational inattention and costly information acquisition we develop a revealed preference test for optimal acquisition of costly information the test encompasses models of rational inattention sequential signal processing and search we provide limits on the extent to which attention costs can be recovered from choice data we experimentally elicit state dependent stochastic choice data of the form the tests require in simple cases tests con rm that subjects adjust their attention in response to incentives as the theory dictates

corporate social responsibility a microeconomic review of the literature this paper provides a review of the theoretical and empirical literature on corporate social responsibility csr depending on whether an individual can be considered as selfish or whether she has also social preferences motives for csr can be explained in different ways furthermore we explicitly highlight the influence of different corporate governance system on csr as well as the relationship between firms size and social commitment because it is difficult to distinguish between different theories in empirical studies we argue that an experimental approach might be suitable to test theories of csr

a measure of rationality and welfare evidence showing that individual behavior often deviates from the classical principle of preference maximization has raised at least two important questions 1 how serious are the deviations 2 what is the best way to analyze choice behavior in order to extract information for the purpose of welfare analysis this paper addresses these questions by proposing a new way to identify the preference relation that is closest in terms of welfare loss to the revealed choice

competition and incentives with motivated agents a unifying theme in the literature on organizations such as public bureaucracies and private nonprofits is the importance of mission as opposed to profit as an organizational goal such mission oriented organizations are frequently staffed by motivated agents who subscribe to the mission this paper studies incentives in such contexts and emphasizes the role of matching the mission preferences of principals and agents in increasing organizational efficiency matching economizes on the need for high powered incentives it can also however entrench bureaucratic conservatism and resistance to innovations the framework developed in this paper is applied to school competition incentives in the public sector and in private nonprofits and the interdependence of incentives and productivity between the private for profit sector and the mission oriented sector through occupational choice jel d23 d73 h41 l31 the late twentieth century witnessed a historic high in the march of market capitalism with unbridled optimism in the role of the profit motive in promoting welfare in the production of private goods moreover this generated a broad consensus on the optimal organization of private good production through privately owned competitive firms when it comes to the provision of collective goods no such consensus has emerged debates about the relative merits of public and private provision still dominate this paper suggests a contracting approach to the provision of collective goods it focuses on two key issues how to structure incentives and the role of competition between providers at its heart is the idea that organizations that provide collective goods cohere around a mission 2 thus production of collective goods can be viewed as mission oriented

the macroeconomics of early retirement early retirement was introduced after the appearance of redundant middle aged workers not entitled to pensions this distortionary policy reduces human capital accumulation and economic growth but shifts part of the tax burden on future generations why was it adopted alternative policies which do not introduce long term distortions but impose a larger cost on the current generation of workers were blocked by a coalition of high income workers who did not plan to retire early but sought to reduce the current tax burden and low income workers who expected to retire early and to benefit from the early retirement pension

how social security and medicare affect retirement behavior in a world of incomplete markets this paper provides an empirical analysis of how the u s social security and medicare insurance system affect the labor supply of older males in the presence of incomplete markets for loans annuities and health insurance we estimate a detailed dynamic programming dp model of the joint labor supply and social security acceptance decision focusing on a sample of males in the low to middle income brackets whose only pension is social security the dp model delivers a rich set of predictions about the dynamics of retirement behavior and comparisons of actual vs predicted behavior show that the dp model is able to account for wide variety of phenomena observed in the data including the pronounced peaks in the distribution of retirement ages at 62 and 65 the ages of early and normal eligibility for social security benefits respectively we identify a significant fraction of health insurance constrained individuals who have no form of retiree health insurance other than medicare and who can only obtain fairly priced private health insurance via their employer s group health plan the combination of significant individual risk aversion and a long tailed pareto distribution of health care expenditures implies that there is a significant security value for these individuals to remain employed until they are eligible for medicare coverage at age 65 overall our model suggests that a number of heretofore puzzling aspects of retirement behavior can be viewed as artifacts of particular details of the social security rules whose incentive effects are especially strong for lower income individuals and those who do not have access to fairly priced loans annuities and health insurance

accounting for changes in tastes health concerns are thought by many to have shifted consumption away from red meats though econometric evidence is mixed testing for structural change is difficult especially when one time series is used for both estimating demand equations and testing their stability specification errors may suggest a shift where none has occurred using nonparametric demand analysis we find that meat consumption patterns in the united states and australia can be explained using only relative prices and expenditures only imposing particular functional forms can reverse the conclusion suggesting that specification errors in econometric demand studies can account for findings of taste changes

the role of prices in measuring the poor s living standards in this paper we revisit two pieces of conventional wisdom in the current debate about poverty paying close attention to the price data underlying these findings that the poor pay more than households of higher income for the goods and services they purchase and that poverty rates at least as measured by the u s census have remained essentially flat since the late 1960s raising questions about the success of the policies implemented to reduce poverty by examining scanner data on thousands of household purchases we find that the poor pay less not more for the goods they purchase and by extending the advances on price measurement in the recent decade back to the 1970s we find that current poverty rates are less than half of the official numbers

managerial contracting and corporate social responsibility abstract this paper presents a theory of corporate social responsibility in the form of the private provision of public goods and private redistribution by a firm these social expenditures are determined by a manager operating under a compensation contract chosen by shareholders in a capital market that prices social expenditures the theory incorporates three explanations for compensation systems that encompass social performance first consumers may reward the firm for its social expenditures second managers may have personal preferences for contributing to social causes and third the shareholder clientele a firm attracts may prefer social expenditures social incentives are higher powered the more consumers reward the firm and the stronger are shareholders warm glow preferences for social expenditures profit incentives are higher powered the more consumers reward the firm but are independent of shareholder preferences when consumers reward the firm for its social expenditures firms with higher ability managers have both higher operating profits and higher social expenditures when times are good so a positive correlation is predicted in bad times however the correlation is negative except for firms with very low ability managers in very bad times where the correlation is zero

optimal taxation of capital income in general equilibrium with infinite lives this paper analyzes the optimal tax on capital income in general equilibrium models of the second best agents have infinite lives and utility functions which are extensions from the koopmans form the population is heterogeneous the important property of the models is the equality between the social and the private discount rates in the long run i find that the optimal tax rate is zero in the long run for a special case of additively separable utility functions i then determine the tax rates along the dynamic path and conditions that are sufficient for the local stability of the steady state

aging population and education finance abstract conventional wisdom suggests that aging of population will increase political pressure to tilt the composition of social spending in favor of the elderly while potentially sacrificing other publicly provided goods such as education this view seems to be supported by recent empirical findings that per child public education spending tends to be lower in us jurisdictions with higher fraction of elderly residents do these cross sectional findings also carry the dynamic implication that longevity will lead over time to waning political support for funding of public education this paper challenges such implication we present a model that is consistent with the aforementioned cross sectional regressions yet predicts an overall positive impact of increasing longevity on public education funding and economic growth

the value of information in production economies abstract it is known that blackwell s 1953 ann math statist 24 265 272 theorem according to which more information always has positive value does not hold in many economic circumstances in particular in exchange economies with random endowments it may fail completely we show that in certain economies with risk averse consumers and risk neutral producers the blackwell theorem holds in competitive equilibrium given that risk sharing markets are absent however in the presence of a risk sharing market it is shown that for crra utility functions all agents may become weakly worse off with better information journal of economic literature classification numbers d51 d80 g14

environmental pressure group strength and air pollution an empirical analysis there is an established theoretical and empirical case study literature arguing that environmental pressure groups have a real impact on pollution levels our original contribution to this literature is to provide the first systematic quantitative test of the strength of environmental non governmental organizations engos on air pollution levels we find that engo strength exerts a statistically significant impact on sulfur dioxide smoke and heavy particulates concentration levels in a cross country time series regression analysis this result holds true both for ordinary least squares and random effects estimation it is robust to controlling for the potential endogeneity of engo strength with the help of instrumental variables the effect is also substantively important strengthening engos represents an important strategy by which aid donors foundations international organizations and other stakeholders can try to achieve lower pollution levels around the world

the timing of redistribution we investigate whether late redistribution programs that can be targeted toward low income families but that may distort savings decisions can dominate early redistribution programs that cannot be targeted as a result of information constraints we use simple two period overlapping generations models with heterogeneous agents under six policy regimes a model calibrated to the u s economy benchmark two early redistribution lump sum regimes two targeted late redistribution regimes and finally a model without taxes and redistribution redistribution programs are financed by a labor tax on the young generation and a capital tax on the old generation we argue that if the programs are small in size late redistribution can dominate early redistribution in terms of welfare but not in terms of real output better targeting of low income households cannot completely offset savings distortions in addition we find that the optimal transfer and tax policy implies a capital tax of 100 and transfers exclusively to the young generation

the corporate social performance financial performance link strategic managers are consistently faced with the decision of how to allocate scarce corporate resources in an environment that is placing more and more pressures on them recent scholarship in strategic management suggests that many of these pressures come directly from sources associated with social issues in management rather than traditional arenas of strategic management using a greatly improved source of data on corporate social performance this paper reports the results of a rigorous study of the empirical linkages between financial and social performance corporate social performance csp is found to be positively associated with prior financial performance supporting the theory that slack resource availability and csp are positively related csp is also found to be positively associated with future financial performance supporting the theory that good management and csp are positively related 1997 by john wiley sons ltd