government debt redistributive fiscal policies and the interaction between borrowing constraints and intergenerational altrusim abstract we show how borrowing constraints intergenerational altruism and their interaction shape the aggregate savings response to government debt and fiscal policies that redistribute resources between living generations we also characterize the conditions under which borrowing constraints bind and the altruistic transfer motive operates in terms of the strength of the altruism motive the shape of the lifetime productivity profile the willingness to substitute consumption intertemporally and other factors finally we characterize the dynamic response of aggregate savings to nonneutral government debt policies in economies with binding borrowing constraints

consumption down payments and liquidity constraints one frequently cited explanation for the empirical failure of the orthodox life cycle permanent income hypothesis lc pih is the presence of binding liquidity constraints households inability to borrow and lend at the same interest rate or to borrow the desired quantity can distort household consumption profiles depressing consumption during periods when constraints bind whether or not liquidity constraints bind has important implications for the sensitivity of consumption to fluctuations in income the neutrality of government debt and the structure of taxation despite the potential importance of liquidity constraints in understanding macroeconomic behavior there has been comparatively little research into the effect of specific constraints on consumption one area of consumer behavior where liquidity constraints arguably may be important is in housing decisions and mortgage markets households wishing to own a first home must accumulate a down payment in order to qualify for a mortgage loan currently for conventional mortgages in the united states most lending institutions require between s percent and 20 percent of the purchase price of the home put down in advance of the purchase 2 without access to private gifts or loans many

analysis of a small open economy the case of energy prices in canada the analysis suggests that land rental price decrease in the long run as a consequence of higher energy prices energy demand from agriculture decreases if land and energy are substitute inputs the necessary and sufficient conditions for expecting increasing average farm size decreasing agricultural output and number of farms also have been provided the analysis considers a competitive equilibrium environment with specific proviso that land prices adjust in response to higher domestic energy prices simple expressions for calculating long run agricultural responses to higher domestic energy prices were derived and used in estimating such responses for canadian agriculture

long run comparative statics under output and land price uncertainty several authors have noticed that in the uncertain short run the supply function may slope downward and the input demand functions may slope upward these possibilities prevent the setup of unambiguous tests of rational behavior in this article testable hypotheses for the competitive firm operating in a price uncertain environment are derived assuming a long run horizon some of these hypotheses take the form of slutsky type relations involving the relative input demand functions the ratios of input to output quantities homogeneity restrictions involving input and output mean prices in general are absent under uncertainty conditions for restoring this homogeneity are also discussed the main result is the rediscovery of the importance of relative quantities for the analysis of a long run equilibrium

determinacy and learnability of monetary policy rules in small open economies this paper evaluates under which conditions different taylor type rules lead to determinacy and expectational stability e stability of rational expectations equilibrium in a simple new keynesian small open economy model developed by gali and monacelli 2005 in particular we extend the bullard and mitra 2002 results of determinacy and e stability in a closed economy to this small open economy framework our results highlight an important link between the taylor principle and both determinacy and learnability of equilibrium in small open economies more importantly the degree of openness coupled with the nature of the policy rule adopted by the monetary authorities might change this link in important ways a key finding is that contrary to bullard and mitra expectations based rules that involve the cpi and or the nominal exchange rate limit the region of e stability and the taylor principle does not guarantee e stability we also show that some forms of managed exchange rate rules can help to alleviate problems of both indeterminacy and expectational instability yet these rules might not be desirable since they promote greater volatility in the economy

intergenerational transmission of homeownership the roles of gifts and continuities in housing market characteristics summary parental homeownership influences the younger generation s housing tenure through parental gifts and similarities in housing market circumstances for example urban rural differences among other mechanisms this paper contributes to the distinguishing of these mechanisms and their relative importance using the netherlands kinship panel study data and logistic regression analysis of housing tenure both gift giving and continuities in housing market characteristics appear to be important mechanisms underlying the intergenerational transmission of homeownership after controlling for these mechanisms and other individual and parental characteristics a strong effect of parents housing tenure on children s housing tenure remains which may be partly attributed to mechanisms such as socialisation

the theory of the firm in long run equilibrium in a recent series of articles economists have investigated the comparative statics of the neoclassical firm in a competitive environment with the specific proviso that output price adjusts in response to changes in factor prices the older theory of the firm such as is found for example in paul samuelson 1947 is deficient in this regard metaphors such as short run have been used to gloss over the inconsistency of holding output price constant in the face of changing costs through changing factor prices in this paper a simple yet thorough analysis of a firm in a competitive industry i e a firm facing zero entry and adjustment cost conditions is given new results pertaining to restrictions on the behavior of such firms are offered also the length and complexity of established results is substantially reduced

do first time house buyers receive financial transfers from their parents using danish longitudinal data with information about wealth for a sample of first time house buyers and their parents we test whether there are direct financial transfers from parents to children in connection with the house purchase or in connection with unemployment spells occurring just after the purchase when children typically hold few liquid assets first we document that child and parent financial resources are correlated then we introduce conditioning variables and exploit the panel aspect of the data to also condition on fixed unobserved factors which arguably govern preferences and or productivity we find no evidence of direct financial transfers

private transfers borrowing constraints and the timing of homeownership the 1991 italian survey of household income and wealth contains retrospective information on intergenerational transfers this information is used to estimate the impact of transfers on the saving time required to purchase a house it is found that transfers have a small impact on saving time and that after receiving a transfer households purchase considerably larger homes the results have implications for the debate about the source of the relation between aggregate saving and growth

on the comparative statics of a competitive industry with inframarginal firms recently economists have begun to develop a theory of the perfectly competitive firm and industry in long run equilibrium in contrast to the traditional model2 in which all prices are parametric this new theory takes explicit recognition of the fact that output price must adjust to exogenous changes in input prices before the industry can be said to be in long run competitive equilibrium the focus of this analysis has been to derive implications of competitive theory which can be tested using data generated by observing individual firms in

flexible parametric estimation of duration and competing risk models in this paper we specify and estimate a flexible parametric proportional hazards model the model specification is flexibly parametric in the sense that the baseline hazard is non parametric while the effect of the covariates takes a particular functional form we also add parametric heterogeneity to the underlying hazard model specification we specify a flexible parametric proportional competing risks model which permits unrestricted correlation among the risks unemployment duration data are then analysed using the flexible parametric duration and competing risks specifications we find an important effect arising from the exhaustion of unemployment insurance and significantly different hazards for the two types of risks new jobs and recalls

intergenerational transfers and liquidity constraints a growing body of evidence indicates that liquidity constraints could affect a substantial proportion of u s consumers but little is known about why these constraints might exist an important but little explored issue is the relationship between inter vivos intergenerational transfers and liquidity constraints these transfers can ease borrowing constraints empirical transfer patterns match those predicted from a model in which transfers are allocated to liquidity constrained consumers in particular the distinction between current and permanent incomes of potential recipients is a key aspect of private transfer behavior the findings have important implications for our understanding of consumer behavior

the role of intergenerational transfers in aggregate capital accumulation this paper uses historical u s data to directly estimate the contribution of intergenerational transfers to aggregate capital accumulation the evidence presented indicates that intergenerational transfers account for the vast majority of aggregate u s capital formation only a negligible fraction of actual capital accumulation can be traced to life cycle or hump savings a major difference between this study and previous investigations of this issue is the use of more accurate longitudinal age earnings and age consumption profiles these profiles are simply too flat to generate substantial life cycle savings this paper suggests the importance of and need for substantially greater research and data collection on intergenerational transfers life cycle models of savings that emphasize savings for retirement as the dominant form of capital accumulation should give way to models that illuminate the determinants of intergenerational transfers

intergenerational transfers borrowing constraints and saving behavior evidence from the housing market abstract we examine the effects of intergenerational transfers on saving behavior by analyzing transfers targeted to first time home purchases transfer recipients have a shorter time to save for a down payment of 9 20 for each dollar of transfer received total savings falls by 29 40 cents and the down payment rises by 61 71 cents transfer recipients increase the value of the home purchased but by an amount that is much lower than possible if the transfer were fully leveraged in addition transfers appear to help households achieve certain down payment thresholds that give favorable mortgage terms

intergenerational transfers and capital market imperfections evidence from a cross section of italian households abstract we investigate whether a system of family finance exists and to what extent it is able to offset capital market imperfections a simple model of intergenerational transfers implies that the probability of a liquidity constrained consumer receiving a transfer is negatively correlated with his current endowment and positively correlated with his future resources we test this proposition using a recent survey of italian households in which both transfer recipients and liquidity constrained households are readily observable the results indicate that private transfers help to ease borrowing constraints however a substantial number of liquidity constrained households remain after transfers have been made

energy price impacts modelling in the agriculture sector abstract energy price impacts in the agriculture sector are mainly of economic and non economic types however economic impacts are well researched this paper surveys the various types of energy price impacts and different estimation techniques used in the past the study suggests that the energy price impacts estimation from a systems model of the agriculture sector is the best for several reasons for this purpose a price endogenous sectoral programming model of agriculture can be developed in a partial or general equilibrium framework however data requirements for this are enormous

intergenerational transfers and the accumulation of wealth h t ouseholds acquire wealth from two sources they save out of income they have earned and they receive transfers from other people the first method of wealth accumulation goes under the name of life cycle saving in which people save during their working lives and dissave after retirement the second involves either an inter vivos transfer that is a transfer between living people or a bequest a transfer that occurs at the death of the donor while inter vivos transfers and bequests will arise in dynastic models where preferences include a taste for the well being of one s descendents few empirical life cycle models reflect these concerns indeed a sharp debate has arisen over the ability of the simple life cycle model to explain observed wealth accumulation understanding the relative sizes of these sources of wealth accumulation affects a variety of issues for example the effects of government debt social insurance public transfer programs estate taxes and incentives for charitable giving depend to some extent on the magnitude and nature of private saving and transfers of wealth analyses of the inequality of wealth may depend on whether most of wealth is earned or received as transfers appropriate policies for encouraging private saving may look rather different depending on whether most saving is to be consumed later in life or passed along to the next generation finally evidence on transfer patterns relates to more fundamental

inter vivos transfers and bequests in three oecd countries reforms reducing the generosity of pensions have distributional effects on future generations if individuals care about their descendants welfare but only affect elderly individuals if bequests are the unintentional result of precautionary savings and safety net programmes such as unemployment insurance may displace sources of private help such as that provided by living parents to their children in need this paper provides comparable measures of how expected bequests and transfers vary with cumulated parental earnings in the united states west germany and the united kingdom the strength of bequest motives is empirically very weak in the available data private inter vivos transfers which appear to depend on the recipients economic situation are partly crowded out by public unemployment insurance programmes together involuntary bequests and intentional inter vivos transfers appear to be an important channel of intergenerational inequality transmission and strengthen substantially the relationship between an individual s and his parents economic status ernesto villanueva