the optimal ordering policy in a dcf analysis for deteriorating items when trade credit depends on the order quantity abstract in this paper an inventory system for deteriorating items under the conditions of using the discounted cash flows dcf approach to the permissible to delay payment will be considered as a matter of fact the supplier usually is willing to provide the retailer a permissible delay of payments if the retailer orders a large quantity as a result we consider that the delay in payments depends on the quantity ordered that is when the order quantity is less than that at which the delay in payments is permitted the payment for the item must be made immediately otherwise the fixed trade credit period is permitted this paper incorporates all concepts of a dcf approach and the trade credit linked to ordering quantity and develops a new inventory model for deteriorating items to generalize jaggi and aggarwal int j prod econ 34 1994 151

human capital and inequality dynamics the role of education technology the paper offers a unified way to examine several puzzles on inequality dynamics it focuses on differences in the education technology and their effects on income distributions our overlapping generations economy has the following features 1 consumers are heterogenous with respect to ability and parental human capital and 2 intergenerational transfers take place via parental direct investment in education and public education financed by taxes possibly with a level determined by majority voting we explore several variations in the production of human capital some attributed to home education and others related to public education and indicate how various changes in education technologies affect the intragenerational income inequality along the equilibrium path

efficient education subsidization and the pay as you use principle abstract we investigate whether the pay as you use principle of public finance should apply to education subsidization for children to internalize human capital externalities in an intergenerational model with endogenous fertility leisure and accumulations of human and physical capital we characterize social optimality concerning physical and human capital accumulation leisure labor and fertility to guide the design of efficient education subsidization we show that efficient education subsidization requires future generations benefitting from it pay for it when fertility and leisure are endogenous namely the government should uphold the pay as you use principle to subsidize children s education by deficit and repay the debt by future taxes

intergenerational mobility under private vs public education intergenerational earnings mobility is analyzed in a model where human capital is produced using schooling and parental time in steady states more mobile societies have less inequality but in the short run higher mobility may result from an increase in inequality starting from the same inequality mobility is higher under public than under private education a rise in income shocks for example due to increased returns to ability or a switch from public to private schooling both increase inequality however increased shocks raise mobility in the short run and do not affect it in the long run whereas an increased role for private schooling reduces mobility in both the short and long run that these differences may help to identify the source of changes in inequality and other real world implications are illustrated in a brief discussion of time trends and cross country differences

credit financing in economic ordering policies of deteriorating items this paper presents the economic ordering policies of deteriorating items in the presence of trade credit using a discounted cash flows dcf approach a dcf approach permits a proper recognition of the financial implication of the opportunity cost and out of pocket costs in inventory analysis it also permits an explicit recognition of the exact timing of cash flows associated with an inventory system a comprehensive sensitivity analysis has also been done

social security public education and the growth inequality relationship abstract we study how the relationship between economic growth and inequality depends upon the levels of funding of two of the largest government programs public education and social security we do this in the context of an overlapping generations economy with heterogeneous agents where the government collects a tax on labor income to finance these programs we show that in our model an increase in government spending on social security reduces income inequality and can have a non monotonic effect on growth when the initial level of social security funding is low as is the case in most poor economies then its increase will enhance growth when its funding level is high as is typical for developed countries we show that its further increase can slow down growth while reducing income inequality these results obtain regardless of whether the increase in social security funding is financed by a tax increase or by cutting the public education budget we also find that the effects of increasing the level of public education expenditures or the overall size of the government budget holding the budget composition fixed are characterized by similar non monotonic growth inequality relationships

income ranking and convergence with physical and human capital and income inequality this paper presents an overlapping generations model with physical and human capital and income inequality it shows that inequality impedes output growth by directly harming capital accumulation and indirectly raising the ratio of physical to human capital the convergence speed of output growth equals the lower of the convergence speeds of the relative capital ratio and inequality and varies with initial states among economies with the same balanced growth rate but different initial income levels the ranking of income can switch in favor of those starting from low inequality and a low ratio of physical to human capital particularly if the growth rate converges slowly c 2004 elsevier b v all rights reserved

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

public spending on education and the incentives for student achievement we build a model where homogeneous workers can accumulate human capital by investing in education schools combine public resources and individual effort to generate productive skills if skills are imperfectly compensated then in equilibrium students may under invest in effort we examine the effect on human capital accumulation of three basic education finance policies increased tuition subsidies may not be beneficial because they increase enrolment but they may lower the incentives for student achievement hence the skill level policies directed at enhancing the productivity of education or making degrees more informative are more successful at improving educational outcomes

fiscal policy composition of intergenerational transfers and income distribution abstract in this paper we characterize the relationship between the initial distribution of human capital and physical inheritances among individuals and the long run distribution of these two variables in a model with indivisible investment in education we analyze how the initial distribution of income determines the posterior intergenerational mobility in human capital and the evolution of intragenerational income inequality this analysis enables us in turn to characterize the effects of fiscal policy on future income distribution and mobility when the composition of intergenerational transfers is endogenous to this end we consider the following government interventions a pay as you go social security system a tax on inheritance a tax on capital income a tax on labor income and a subsidy on education investment

is everything neutral in his well known analysis of the national debt robert barro introduced the notion of a dynastic family this notion has since become a standard research tool particularly in the areas of public finance and macroeconomics in this paper we critique the assumptions on which the dynastic model is predicated and argue that this framework is not a suitable abstraction in contexts in which the objective is to analyze the effects of public policies we reach this conclusion by formally considering a world in which each generation consists of a large number of distinct individuals as opposed to one representative individual we point out that family linkages form complex networks in which each individual may belong to many dynastic groupings the resulting proliferation of linkages between families gives rise to a host of neutrality results including the irrelevance of all public redistributions distortionary taxes and prices since these results are not at all descriptive of the real world we conclude

the allocation of public funds in a hierarchical educational system abstract this paper studies the dynamic effects of allocating public funds between basic and advanced education holding the size of total public education funds fixed i identify the effects of their composition on aggregate efficiency and in equality first since basic education is a prerequisite for attending advanced education there exists a lower bound on funding it allocation policies below this lower bound are strictly pareto dominated whether a corresponding lower bound on funding advanced education exists or not depends on the development stage of the economy and the size of total public funds secondly while an allocation policy favoring basic education generates the usual redistribution from top to bottom one favoring advanced education may result in reverse redistribution from bottom to top last through the inter generational link short run allocation policies may have long run effects a simple rule of thumb is that for an economy in its early development stage focusing on basic education for sufficiently long duration is the only way out of polarization and low aggregate efficiency contrary to the actual policies pursued by many of the less developed economies

growth effects of an unfunded social security system when there is altruism and human capital abstract we investigate the relationship between growth and an unfunded social security system in an overlapping generations model with joy of giving altruism where endogenous growth is driven by the accumulation of human capital we show that an unfunded social security system financed with a tax on labor income can increase growth

a bivariate duration model for job mobility of two earner households abstract in recent years we have observed an increasing interest in the job mobility patterns of employed persons a new issue in this context is the mutual dependence of job mobility choice of workers who belong to the same household in the present paper we focus on bivariate duration models of stock sampled data in which dependence is induced through mixing we apply the estimation method on the basis of an empirical study on the mutual dependence of job mobility of workers belonging to a two earner household in the netherlands an interesting empirical result is that the marginal willingness to pay for a reduction in commuting time in a two wage earner household is higher than that usually found for single earner workers

public education under capital mobility the paper considers a two country model of overlapping generations economies with intergenerational transfers motivated by altruism and investment in human capital we examine in a non stationary competitive equilibrium the optimal provision of education with and without capital market integration first we explore how regimes of education provision public private or mixed arise and how they affect the dynamics of autarkic economies second we study the effects of capital market integration in equilibrium on the optimal provision of education third we show that capital market integration enhances government intervention in the provision of public education to improve the welfare of its constituents and consider various solutions to such a competition

human capital and the reduction of inequalities an intra national analysis in italy human capital is a fundamental economic resource in the knowledge economy era and improvements in education are usually associated with both economic development and the reduction of inequality i

why is child labor illegal abstract we present a theory of the emergence of laws restricting child labor or imposing mandatory education that is consistent with the fact that poor parents tend to oppose such laws we find that if altruistic parents are unable to commit to educating their children child labor laws can increase the welfare of higher income parents in an ex ante sense on the basis of an empirical analysis of latin american household surveys we demonstrate that per capita income in the country of residence has the predicted effect on child labor supply even after controlling for other household characteristics

fertility growth and public investments in children in this paper it is shown how subsidies for education and for the number of children affect economic growth fertility and welfare in an endogenous growth model with altruistic agents subsidizing education has not only a direct positive effect on growth but also an indirect positive effect on growth through reducing fertility after some finite periods future generations will gain in welfare in the education subsidy regime in contrast subsidizing the number of children increases fertility depresses growth and reduces all generations welfare

the effects of compulsory schooling on growth income distribution and welfare abstract in this paper we consider an olg model with productive capital and human capital affecting the quality of labor in each generation parents invest in their children s education but disregard its external effect on the aggregate production function government intervention in providing compulsory schooling increases economic growth along the equilibrium path while the intragenerational income distribution becomes more equal also in the long run the majority of individuals in each generation are better off due to compulsory schooling

fertility growth and flat rate taxation for education subsidies abstract in this paper we show that an increase in the ratio of educational subsidies to income financed by flat rate consumption and income taxes enhances economic growth and has no net effect on fertility with logarithmic preferences using data from 69 countries a cross section analysis indicates that these theoretical results are consistent with empirical evidence

public schooling college subsidies and growth abstract how does the mix of public education expenditures across primary and secondary k 12 education and post secondary college education influence economic growth to address this i build an overlapping generations endogenous growth model human capital is accumulated through compulsory k 12 education and through optional college education government uses tax revenue to provide quality in k 12 schooling and to subsidize college tuition when total expenditures are small all funds should provide k 12 quality when expenditures are above a critical value a positive share should subsidize tuition the share should increase with total expenditures and with the degree of complementarity of human capital accumulated through the two types of education also increased education spending is more likely to increase growth when a larger share subsidizes tuition

education democracy and growth abstract this note presents a model of endogenous growth where redistribution determined by a political equilibrium is in the form of public education it is shown that there need not be a negative relationship between growth and redistribution as public education increases the level of human capital in the conomy and at the same time tends to produce a more even income distribution

education choice endogenous growth and income distribution this paper studies an economy where parents can choose between public or private schools and can vote on taxes used to fund public schools the model is calibrated to us data and studied using simulations a bimodal income distribution emerges where public education students converge to a low income equilibrium while private education students experience endogenous growth with higher incomes however public education students experience long run growth through a spillover from private education students possible problems with the existence of a private alternative to pubic education such as the emergence of a education based class structure are identified

does compulsory school attendance affect schooling and earnings we establish that season of birth is related to educational attainment because of school start age policy and compulsory school attendance laws individuals born in the beginning of the year start school at an older age and can therefore drop out after completing less schooling than individuals born near the end of the year roughly 25 percent of potential dropouts remain in school because of compulsory schooling laws we estimate the impact of compulsory schooling on earnings by using quarter of birth as an instrument for education the instrumental variables estimate of the return to education is close to the ordinary least squares estimate suggesting that there is little bias in conventional estimates every developed country in the world has a compulsory schooling requirement yet little is known about the effect these laws have on educational attainment and earnings 1 this paper exploits an unusual natural experiment to estimate the impact of compulsory schooling laws in the united states the experiment stems from the fact that children born in different months of the year start school at different ages while compulsory schooling laws generally require students to remain in school until their sixteenth or seventeenth birthday in effect the interaction of school entry requirements and compulsory schooling laws compel students born

education social security and growth abstract we study the role of government s allocation of tax revenues between two outlays public investment in education a transfer to the young generation and social security benefits to the older generation in an overlapping generations economy with pay as you go social security and altruistically motivated transfers from parents to children we analyze how the allocation of the tax revenues between the two outlays affects growth and welfare in competitive equilibria a we obtain comparative dynamics results for nonstationary equilibria subject to a change in the allocation profile b for stationary equilibria we show that for a given allocation profile of the tax revenues educational subsidies can either increase the growth rate or decrease it depending on the parameters of the model preferences production function and the tax rate c if government seeks to allocate funds in a way that maximizes the growth rate we demonstrate that under some plausible conditions it is not optimal to maintain pay as you go social security however if parents preferences combine strong concern for their retirement with significant degree of altruism towards their children then pay as you go social security system does enhance growth and welfare

investments into education doing as the parents did abstract empirical evidence suggests that parents with higher levels of education generally attach a higher importance to the education of their children this implies an intergenerational chain transmitting the attitude towards the formation of human capital from one generation to the next we incorporate this intergenerational chain into an olg model with endogenous human capital formation in absence of any state intervention such an economy might be characterized by multiple steady states with low or high human capital levels there are also steady states where the population is permanently divided into different groups with differing human capital and welfare levels compulsory schooling is needed to overcome steady states with low human capital and welfare levels tax financed education subsidies can lead to further pareto improvements

the compelling effects of compulsory schooling evidence from canada abstract compulsory school laws have existed for more than a hundred years and policies to mandate further education continue to be discussed the implications of these laws however are not well understood historical changes to compulsory schooling in canada permit an examination of their effects on would be dropouts under very different circumstances than those during changes in other countries mandating education substantially increased adult income and substantially decreased the likelihood of being below the low income cut off unemployed and in a manual occupation these findings suggest significant gains from this legislation which seem unlikely offset by the costs incurred while having to remain in school jel classification i20 i28

an integrated view of tests of rationality market efficiency and the short run neutrality of monetary policy abstract this paper analyzes an important class of models in which expectations play an important role topics included in the analysis are tests of 1 rationality of forecasts in either market or survey data 2 capital market efficiency 3 the short run neutrality of monetary policy and 4 granger causality in macroeconometric models the common elements of these tests are highlighted in particular cross equation tests for rationality or the short run neutrality of money are shown to be equivalent to more common regression tests in the literature these results demonstrate that the exact specification of the relevant information set used in rational forecasts is not necessary for the cross equation tests to have desirable asymptotic properties also discussed are the conditions for identification of coefficients and testability of hypotheses

intergenerational transfers production and income distribution abstract we consider an overlapping generations economy where the aggregative production process uses physical capital and human capital intergenerational transfers from parents to their children are motivated by altruism we distinguish between two types of transfers investment of parents in the education of their offspring and capital transfer the gift bequest motive we show that the intensity of each type of altruism and hence the composition of the two types of transfers affect significantly the equilibrium output and the intragenerational income distributions comparing competitive equilibria from the same initial distributions of capital transfers and human capital we derive a the economy with the higher education inclined altruism attains lower output and more equal intragenerational income distributions if either the production function s elasticity of substitution is not large or the altruism is weak b for more bequest inclined altruism the effects are usually reversed c under public provision of education higher bequest inclined altruism results in lower output and less equal distribution of income in all dates

public education and redistribution when talents are mismatched in democratic countries elected policymakers determine public spending the level of public spending depends on taxes that are decided by a voting mechanism policymakers also decide how to allocate funds among different policies such as public education and pure redistributive transfers how are the levels of funding for public education and redistribution determined in the political process what impacts do votes on these two policies have on inequality growth and social mobility we develop a politico economic model that highlights a novel mechanism public education provides opportunities for the children of the poor to be recognized for their talent this reduces the probability of a mismatch which takes place when individuals with low talent who come from rich families find jobs that should go to people with high talent and vice versa hence the poor may prefer public spending on education to direct redistribution while the rich prefer redistribution as education implies more competition for good jobs from the poor

endogenous determination of public budget allocation across education stages abstract this paper studies the endogenous determination of public budget allocation across hierarchical education stages in less developed economies the top class has dominant political power to implement its most preferred policy which is characterized by exclusive participation and large schooling expenditure at higher education at the expense of basic education in developed economies the budget allocation is more balanced under certain parameters it leads to expanded participation of the middle class in higher education the model offers an explanation to the observed cross country policy difference and is broadly consistent with historical evidence

honey i shrunk the kids benefits revisiting intergenerational conflict in oecd countries intergenerational conflict may arise when the interests of different age groups do not align we examine cross country data to find evidence for this conflict in oecd countries we derive our results from a fgls estimation model which is complemented by a system gmm estimation to account for potential endogeneity the data are from a panel of 22 oecd countries over the time period 1985 2005 we find little support for intergenerational conflict in general however those who are close to statutory retirement age dislike public expenditure on families and education because once they retire they will have less income compared to their work income this effect is transitory however implying a change in voting behavior during retirement age

equilibrium existence in an overlapping generations model with altruistic preferences abstract we prove the existence of a competitive equilibrium in an overlapping generations model with altruistic preferences and nonnegative bequests in equilibrium some sequences of agents of successive generations may be continually linked by positive bequests and act as infinitely lived agents other sequences of agents may not be so linked and therefore behave as sequences of finite lived agents thus this paper adds to the literature on competitive equilibrium in dynamic models by endogenising the mix of finite and infinitely lived agents we also discuss optimality and provide some examples which exhibit interesting equilibria

making negotiated land reform work initial experience from colombia brazil and south africa abstract the paper describes background initial experience and future challenges associated with a new negotiated approach to land reform this approach has emerged as following the end of the cold war and broad macroeconomic adjustment many countries face a second generation of reforms to address deep rooted structural problems and provide the basis for sustainable poverty reduction and economic growth it reviews possible theoretical links through credit market or political channels between asset ownership and economic performance program characteristics in each country as well as lessons for implementation and implications for monitoring and impact assessment are discussed

public versus private investment and growth in a hierarchical education system abstract the paper studies the interaction between public and private spending in a two stage education framework k 12 and tertiary education and their effects on economic growth we find that an increase in the overall education public spending crowds out the total level of private contributions and increases the share of resources that households devote to k 12 education for a given public budget a higher share of k 12 public funding induces higher private education spending overall of which a larger share goes towards higher education the model broadly matches data on education finance in the oecd countries the calibrated parameter values suggest that at both stages public and private inputs are good yet imperfect substitutes with a higher degree of complementarity in basic education we show that the growth maximizing share of public spending devoted to k 12 should be high irrespective of the size of the public budget using the calibrated model to compare the structure of education funding in the eu and the us we find that to maximize growth high tax countries should use more of their public resources in tertiary education relative to low tax countries this suggests that us efforts to improve k 12 education and the reform of higher education in europe are consistent with the objective of increased economic growth

capital markets integration growth and income distribution the paper considers a two country model of overlapping generation heterogenous economies with intergenerational transfers carried out in the form of bequest and investment in human capital we examine in competitive equilibrium the transitory and long run effects of capital markets integration first we explore how the regime of public education affects the dynamics of the integrated economy second we study the effects of capital markets integration in equilibrium on the intragenerational income distribution in both the host and investing country

public education expenditures taxation and growth linking data to theory governments around the world have taken a prominent role in financing education while justifications for this involvement are varied a common motivation is that education expenditures are a key to sustained economic growth economic theory provides a foundation for this belief many papers in the endogenous growth literature have formalized a link between public education expenditures human capital accumulation and long term growth while theory assigns public education expenditures a key role in growth empirical support for the link is mixed as highlighted by blankenau and simpson 004 the disconnect between theory and data can be reconciled by taking a closer look at the theory in nearly every model where growth is fueled by public education expenditures a nonmonotonic relationship between expenditures and growth can arise public education spending increases growth while taxes may decrease growth leaving the net effect ambiguous thus economic theory shows that to identify the growth effects of expenditures one must account for any offsetting effects of the requisite taxation most empirical investigations of these effects do not explicitly control for the method of finance however in contrast we make the relationship between expenditures taxation and growth central to our analysis we estimate a

ageing fertility and growth this paper analyses the interaction between human capital accumulation fertility and labour participation of families in the presence of technology shocks altruistic families spend time on the education of their children to increase their level of human capital compensating transfers through negative bequests are blocked by an active bequest constraint productivity shocks increase the opportunity costs of children and may cause a drop in fertility which results in population ageing we investigate the effects of ageing on allocation and welfare in the presence of a pay as you go payg pension system

a joint approach for setting unit price and the length of the credit period for a seller when end demand is price sensitive this paper considers the seller buyer channel in which the end demand is price sensitive and the seller may offer trade credit to the buyer the unit price seller charged by the seller and the length of the credit period offered by the seller to the buyer both influence the final demand for the product hence we consider both to be policy variables for the seller we use the case of no credit as a benchmark in our analysis the paper provides procedures for determiningthe seller s and the buyer s policies under non cooperative as well as cooperative relationships in the non cooperative case we determine for the seller the optimal unit price and the length of the credit period for the cooperative structure we provide a procedure for characterizingpareto efficient solutions r 2002 elsevier science b v all rights reserved

educational systems growth and income distribution a quantitative study this study sets out to develop a dynamic model within an economy characterized by the coexistence of public and private schools under imperfect credit market conditions in an attempt to provide a clearer understanding of the evolution of economic growth and income inequality we find that any government wishing to reduce income inequality should adopt policies aimed at increasing the enrollment rate in public schools however whilst high enrollment rates can be sustained in private schools and thus create enhanced economic growth this can only occur if accompanied by the liberalization of the credit markets