general equilibrium when economic growth exceeds discounting abstract after dropping the standard general equilibrium assumption that preference orders discount future consumption faster than the economy grows and dropping continuity and weakening utility representation we establish commodity prices and consumptions that approach approximate equilibrium to within any practical tolerance the weizacker overtaking criterion defines the best known non standard discounting orders we admit over discrete time deterministic consumption paths and over continuous time stochastic consumption processes we also perturb preferences to qualify all approximate equilibrium as full equilibrium thus showing some well known non existence examples are singular and so are inadequate defence of standard assumptions journal of economic literature classification numbers c60 c62

economies with many commodities we discuss the two fundamental theorems of welfare economics in the context of the arrow debreu mckenzie model with an infinite dimensional commodity space as an application we prove the existence of competitive equilibrium in the standard single agent growth model

wage and employment determination in a unionized industry the iwa and the british columbia wood products industry two non nested models of union wage and employment determination are estimated using data on the international woodworkers of america iwa and the british columbia wood products industry one model predicts wage and employment outcomes on the labordemand function while the other predicts efficient outcomes on the contract curve the models provide empirical estimates of the union s preferences the production technology and the comparative statics of the models an attempt is made to choose the true model for this industry unfortunately non nested hypothesis tests and other criteria for model discrimination cannot reject one model in favor of the other

aggregation of heterogeneous time preferences we examine an economy whose consumers have different discount factors for utility possibly not exponential we characterize the properties of efficient allocations of resources and of the shadow prices that would decentralize such allocations we show in particular that the representative agent has a decreasing discount rate when as is usually posited all of a group s members have a constant discount rate and decreasing absolute risk aversion preferences we also identify conditions that lead the representative agent to have a rate of impatience that decreases with gross domestic product per capita

the union impact on profits evidence from industry price cost margin data this paper uses industry price cost margin data to estimate the extent to which unions reduce profits estimates allowing for the endogeneity of union status are contrasted with estimates that assume union status is exogenous and not determined in part by either profitability or industry structure endogeneity is found to be an important consideration in estimating the union impact on profits two stage estimates are considerably larger than ols estimates the final section explores the total estimated redistribution from capital to labor in the manufacturing sector an important conclusion is that unions raise prices less than was previously believed

political economy of intermediate goods taxation we generalize the diamond mirrlees production efficiency theorem that there should be no taxes on sectors producing pure intermediate goods to an environment with political economy constraints in our economy allocations and taxation are decided by self interested politicians without the power to commit to future policies the diamond mirrlees production efficiency result holds even when political economy constraints introduce distortions on labor supply and capital accumulation jel h11 h21 e61 p16

the rise and fall of unions in the united states abstract union membership in the united states displayed a shaped pattern over the 20th century while income inequality sketched a a model of unions is developed to analyze these facts there is a distribution of productivity across firms in the economy firms hire capital plus skilled and unskilled labor unionization is a costly process a union chooses how many firms to organize and the union wage simulation of the model establishes that skill biased technological change which affects the productivity of skilled labor relative to unskilled labor can potentially explain the observed paths for union membership and income inequality

unionism and wages a longitudinal analysis the impact of unionism on relative wage rates is a topic of long standing interest in labor economics over the years researchers have used a variety of approaches to estimate the wage advantage associated with union membership initially researchers compared the average wages of union and nonunion workers in specific sectors such as an industry this approach has the obvious limitation of not accounting very well for the various quality or productivity differences that exist among workers differences that command compensating wage payments more recent studies have used cross section wage regressions to control for these other determinants of wages and thereby improve estimates of the union wage effect using large microeconomic data files containing detailed information on characteristics of individual workers numerous studies have estimated wage regressions that include controls for worker characteristics education experience etc and a dichotomous variable indicating union membership status as explanatory variables 2 the coefficient of the union membership variable in these regressions is taken as an estimate of the average impact that unionism has on wage rates controlling for measured differences in characteristics among workers unfortunately the wage regression approach does not completely resolve the problem of standardizing the union nonunion wage comparison for differences in worker quality even with detailed microdata on the characteristics of individual workers it is simply not possible to specify a set of variables that completely captures all worker specific differences in productive ability some aspects of human capital are too subtle to be operationally specified and included in a wage regression although they are recognized and paid for by employers to the extent that these unmeasured worker specific differences are correlated with union membership the wage regression will incorrectly attribute a relative wage impact to unionism 3 an alternative measurement approach that has several advantages over the wage regression is to compare the wage received by the same worker as a union and nonunion member in the past data limitations have prevented researchers from making such a comparison since only a small portion of workers change union status in a given period an unusually large longitudinal file is needed to yield a sufficient number of observed changes for a meaningful analysis 4 recently however large longitudinal data files on individuals participating in the current population survey have become available this paper uses these data to estimate the impact a change in union status has on the worker s wage the

competitive equilibria in production economies with an infinite dimensional commodity space the existence of competitive equilibrium is established for economies with a produc tion sector and an infinite dimensional space of commodities the cru cial assumptions which are required beyond those required in the fin ite dimensional setting are bounds on marginal rates of substitution and marginal rates of transformation copyright 1987 by the econometric society

an economy with infinite dimensional commodity space and empty core abstract we present an example of a two person pure exchange economy having an infinite dimensional commodity space and without core allocations

blocking efficacy of small coalitions in myopic economies abstract we consider a continuum economy with infinitely many commodities and show that for any positive e the core of the economy coincides with the set of allocations which are not blocked by any coalition with measure less than e actually our main result is an extension of grodal s 1972 econometrica40 581 583 result and therefore schmeidler s 1972 econometrica40 579 580 result to economies whose commodity space is l for myopic preferences journal of economic literature classification numbers c71 d51

infinite horizon incomplete markets the model of general equilibrium with incomplete markets is a generalization of the arrow debreu model which provides a rich framework for studying problems of macroeconomics this paper shows how the model which has so far been restricted to economies with a finite horizon can be extended to the more natural setting of an open ended future thereby providing an extension of the finite horizon representative agent models of modern macroeconomics to economies with heterogeneous agents and incomplete markets there are two natural concepts of equilibrium over an infinite horizon which prevent agents from entering into ponzi schemes that is from indefinitely postponing the repayment of their debts the first is based on debt constraints which place bounds on debt at each date event the second is based on transversality conditions which limit the asymptotic rate of growth of debt the concept of an equilibrium with debt constraint is a natural concept of equilibrium for macroeconomic analysis however the concept of an equilibrium with transversality condition is more amenable to theoretical analysis since it permits the powerful techniques of arrow debreu theory to be carried over to the setting of incomplete markets in an economy in which agents are impatient expressed by the mackey continuity of their preference orderings and have a degree of impatience at each date event which is bounded below a concept defined in the paper we show that the equilibria of an economy with transversality condition coincide with the equilibria with debt constraints an equilibrium with transversality condition is shown to exist it follows that for each economy there is an explicit bound m such that an equilibrium with explicit debt constraint m exists in which the constraint is never binding this latter property ensuring that the debt constraint whose objective is to prevent ponzi schemes does not in itself introduce a new imperfection into the model over and above the incompleteness of the markets

effects of trade unions on the earnings differential between males and females canadian evidence this paper examines whether trade unions have affected the earnings gap between male and female workers in canada based on a sample of 4 093 individuals derived from the survey of union membership the results of regression analysis suggest that unions have increased the relative earnings of male workers even after the difference in the level of unionization between males and females is accounted for the results also indicate that the relative wage effect differs substantially between the public and private sectors

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

estimating the effects of unions on wage inequality in a panel data model with comparative advantage and nonrandom selection this article considers the estimation of the structure of wages in union and nonunion sectors it proposes an estimator that extends standard panel data techniques to the case in which the return to the permanent component of the error term is differently rewarded in the two sectors the econometric model is used to estimate the effect of unions on both the level and the variance of wages in canada the findings indicate that unions increase the average wage of workers and compress the returns to observable measures of skill and to a time invariant unobservable measure of skill

union incidence in the public and private sectors union density in the public sector is approximately twice the level of that in the private sector in both canada and the united states canadian data are particularly useful for analysing differences between the public and private sectors because of several industries that have a substantial overlap of ownership between sectors sectors therefore may be compared while holding the industry constant evidence is presented suggesting that union cost factors as related to the size of the plants are important in explaining the high density in the public sector employee characteristics appear to play no role the connection between wage differentials and public sector unionism is also addressed

unionization and profitability evidence from the capital market this paper examines the effect of unionization on the profitability of firms abnormal monthly common stock returns for a sample of 253 nyse listed firms are estimated for the month in which the union petitions for an election and for the month in which the national labor relations board certifies the election outcome the results suggest that unionization on average is associated with a reduction in equity value when unions win an election the average loss associated with the unionization drive is 3 8 percent of equity value when unions lose an election there is an average net reduction of 1 3 percent in the equity value of the firm

finitely optimal allocation in countably large square exchange economies abstract a countably large square exchange economy is said to be of overlapping generations type if an allocation can be pareto improved upon through a trade involving only a finite number of agents if it can be improved upon through a trade involving only finite numbers of agents and commodities a necessary and sufficient condition is given for economies to be of overlapping generation type

canadian union nonunion wage differentials using extensive canadian longitudinal data from the years 1969 71 the authors estimate union nonunion wage differentials of 12 14 percent for 1969 and 13 16 percent for 1970 these estimates are not adjusted for selectivity because three different tests to identify selectivity yield no evidence of selectivity bias the authors argue that although testing for selectivity is often essential selectivity adjustments have resulted in greatly inflated estimates of union nonunion wage differentials in some studies and should therefore be used with caution

edgeworth equilibria in production economies abstract an edgeworth equilibrium is an allocation that belongs to the core of every n fold replica of the economy in this work we study the properties of edgeworth equilibria for economies with production and infinite dimensional commodity spaces under some relatively mild conditions we establish among other things that 1 edgeworth equilibria exist 2 every edgeworth equilibrium is a quasi equilibrium and 3 an allocation is an edgeworth equilibrium if and only if it can be decentralized by a price system

quasi equilibria for growth economies abstract we find preferences that discount utility from future consumption yet violate the standard growth condition in representative agent endowment economies such economies have no competitive equilibria but have quasi equilibria the supporting price systems include a type of speculative bubble

union wage settlements during a disinflation this paper examines the role of union wage contracts in the persistence of inflation and the implication of these contracts for the problem of disinflation in the united states a quantitative model of overlapping con tracts explicitly oriented toward the major union sector is developed the model takes account of expectations of future wage price and employment conditions as in more aggregated models that have been used in macroeconomic research in addition the distribution of workers according to contract length as well as deferred wage increases and escalator clauses are explicitly used in the model the main aim of the model is to determine the constraints which these contracts impose on disinflation paths the model indicates that the maximum speed of disinflation is extremely slow in the early phases if a rise in unemployment is to be avoided but increases considerably before the new lower rate of inflation is reached the disinflation path is considerably slower than that observed after hyperinflation periods however the existence of a path of inflation reduction raises questions about whether the institution of union wage con tracts is really the direct cause of costly disinflations or whether their influence works indirectly by raising credibility problems about a monetary disinflation this abstract was borrowed from another version of this item

general equilibrium wariness and efficient bubbles abstract wary consumers overlook gains but not losses in remote sets of dates or states as preferences are upper but not lower mackey semi continuous bewley s 1972 4 result on existence of equilibrium whose prices are not necessarily countably additive holds wariness is related to lack of myopia and to ambiguity aversion and therefore to bewley s 1986 6 work on knightian uncertainty wary infinite lived agents have weaker transversality conditions allowing them to be creditors at infinity and for bubbles to occur in positive net supply assets completing the markets there are efficient allocations that can only be implemented with asset bubbles

on the contract curve a test of alternative models of collective bargaining the traditional model of collective bargaining confines unions to settlements constrained by the employer s labor demand curve but an alternative model places wage employment outcomes on a contract curve that extends beyond the labor demand curve this paper derives a multidimensional hedonic contract curve model in which employment security provisions are used to maintain efficient bargains outside the employer s demand curve and distinguishes empirically between the contract curve and demand constraint models using data for public school teachers in new york state estimates clearly support the contract curve model over the demand constraint model by linking the gap between compensation and the value of the marginal product to the strength of employment security provisions

carbon dioxide emissions and international trade at the turn of the millennium we present a new dataset of geographical production final embodied production and consumption based carbon dioxide emission inventories covering 78 regions and 55 sectors from 1997 to 2011 we extend previous work both in terms of time span and in bridging from geographical to embodied production and ultimately to consumption we analyse the recent evolution of emissions the development of carbon efficiency of the global economy and the role of international trade as the distribution of responsibility for emissions across countries is key to the adoption and implementation of international environmental agreements and regulations the final production and consumption based inventories developed here provide a valuable extension to more traditional geographical production based criteria

unionism in a competitive industry this article explores a model in which a union confronts many competitive workers firms and consumers under monopoly unionism union coverage may be incomplete then union wages and employment are insensitive to product demand variation under efficient unionism coverage can never be incomplete some union variables necessarily vary with product demand preliminary evidence on the demand independence under incomplete coverage hypothesis is presented also more structure is imposed and further hypotheses are derived and the manner in which the model can be enriched to allow for a variety of union related issues within a consistent framework is set out

the effect of unionization on the gender earnings gap in canada 1971 1981 the male female earnings differential in canada is investigated with particular attention to the effect of trade unions on the gender earnings gap an augmented version of the human capital theory based earnings equation is used as the empirical framework of the study gender specific earnings equations are estimated using cross sectional aggregate data for metropolitan cities and regions in canada for 1971 and 1981 the empirical results for 1971 indicate that unionization increases the annual earnings of males more than of females whereas the 1981 results indicate that trade unions decrease the male female earnings gap however the latter evidence is not statistically significant the study suggests that the increase in female participation in trade unions was an important factor in reducing the gender earnings gap over the period 1971 1981

endogenous discounting wariness and efficient capital taxation abstract when the discount factors that infinite lived consumers use at each date are not predetermined but are instead chosen within some set depending on what the consumption plan is impatience might not hold more precisely if the utility is the infimum of discounted utilities over that set of discount factor sequences then preferences may be just upper semi impatient such lack of lower semi impatience which we refer to as wariness consists in neglecting distant gains but not distant losses examples are the precautionary case a concern with the worst lifetime outcome and the habit persistence case a concern with a fall in living standards the implementation of efficient allocations by trading assets sequentially requires taxes that avoid excessive savings by raising the opportunity of cost of saving up to the point of matching the marginal benefit of dishoarding at distant dates taxes on equilibrium plans are zero in many contexts

planning for the long run programming with patient pareto responsive preferences ethical social welfare functions treat generations equally and respect pareto improvements to non null sets of generations there are perfect optima for such preferences generations facing the same circumstances choose the same actions and all circumstances are treated as possible if each stationary policy determines a unique long run distribution that is independent of the starting point then there is a recursive formulation of policies that are simultaneously optimal for all of the preferences studied here when the ergodic distribution can depend on early events hysteresis the curvature of the social welfare function determines the risks that society is willing to undertake and leads to a variant of the precautionary principle

political economy of mechanisms we study the optimal mirrlees taxation problem in a dynamic economy in contrast to the standard approach where the taxation mechanism is operated by a benevolent planner with full commitment power we focus on economies in which policy decisions are made by self interested politicians who cannot commit to policies the society controls politicians using elections we show that the provision of incentives to politicians can be partly separated from redistribution across agents and that political economy constraints can be modeled as introducing additional aggregate distortions in the dynamic mirrlees problem we provide conditions under which the political economy distortions persist or disappear in the long run if the politicians are as patient as the agents the best sustainable mechanism leads to an asymptotic allocation where the aggregate distortions arising from political economy disappear in contrast when politicians are less patient than the citizens positive aggregate labor and capital taxes remain even asymptotically we conclude by providing a brief comparison of centralized

valuation and optimality in the overlapping generations model we present versions of the fundamental theorems of welfare economics for the overlapping generations model with an infinite dimensional commodity space given samuelson s example one cannot hope for a version of the welfare theorems in terms of pareto optimality however we show that for malinvaud optimality both welfare theorems as formulated by debreu do hold the main result of this paper asserts that in an olg model an allocation is malinvaud optimal if and only if it is a valuation equilibrium a fundamental concern of general equilibrium theory dating at least from adam smith s wealth of nations is the optimality of the market mechanism the relationship between competitive behavior and the efficient allocation of resources has its clearest and most satisfying formulation in the two welfare theorems of k j arrow 1951 and g debreu 1954