the neolithic revolution from a price theoretic perspective article i nfo the adoption of agriculture during the neolithic period triggered the first demographic explosion in history when fertility returned to its original level agriculturalists were more numerous more poorly nourished and worked longer hours than their hunter gatherer ancestors we develop a dynamic price theoretic model that rationalizes these events in the short run people are lured into agriculture by the increased labor productivity of both adults and children in the long run the growth in population overrides the productivity gains and the later generations of agriculturalists end up being worse off than the hunter gatherers counter intuitively the increase in the labor productivity of children causes the long run reduction in welfare in the long run the increase in adult labor productivity only contributes to population growth 2010 elsevier b v all rights reserved

a model of urban demography this study develops an overlapping generations model that involves the endogenous determination of demographic and city structure to fully analyze the social and natural changes in city populations we provide conditions under which the model exhibits the spatial features of demography observed in urban areas city centres have a lower total fertility rate than suburbs and larger cities have a lower total fertility rate than smaller cities through calibration we also show that spatial factors have a significant impact on demographic characteristics and city growth resume un modele de demographie urbaine cette etude developpe un modele de generations qui se chevauchent qui genere la determination endogene de la demographie et de la structure urbaine pour analyser pleinement les changements sociaux et culturels des populations urbaines on presente les conditions qui font que le modele genere les caracteristiques spatiales de la demographie observee dans les zones urbaines le centre ville avec un taux de fecondite plus faible que les banlieues et les grandes villes arborant une fecondite totale plus faible que les petites villes a l aide de calibration on montre que les facteurs spatiaux ont un impact significatif sur les caracteristiques demographiques et la croissance des villes

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

population concentration urbanization and demographic transition abstract this paper investigates how urbanization and demographic transition interrelate with each other via merits agglomeration economies and demerits congestion diseconomies of population concentration it reveals the mechanism by which agglomeration economies and congestion diseconomies affect the fertility rate furthermore analysis also shows that by assuming declines in infant and child mortality rate the model developed in this paper can replicate the following well known historical patterns i advances in urbanization ii rises in the wage rate iii declines in fertility and iv rises followed by declines in the population growth rate the inverted u shaped demographic transition

ipo first day returns offer price revisions volatility and form s 1 language abstract form s 1 is the first sec filing in the initial public offering ipo process the tone of the s 1 in terms of its definitiveness in characterizing the firm s business strategy and operations should affect investors ability to value the ipo we find that ipos with high levels of uncertain text have higher first day returns absolute offer price revisions and subsequent volatility our findings provide empirical evidence for the theoretical models of uncertainty bookbuilding and prospect theory

the economics of development a survey i the subject our definition of the subject will be the use of economic analysis to understand the economies of poor or developing countries this includes in particular how standards of living in the population are determined and how they change over time and further how policy can or should be used in the influence of these processes the definition contains in principle much or most of analytical methods in economics insofar as they can be put to use in the examination of the issues of interest this is as it should be but it poses a problem for a survey in a journal a comprehensive treatment is infeasible so we shall follow a different route the survey will focus on what i take to be the major themes and approaches which characterise the productive aspects of the subject there is therefore no pretence at being exhaustive the purpose is rather to highlight some of the advances many of these have been of real substance there are a number of possible purposes for a survey and it is important to be clear at the outset for whom it is intended what it is and what it is not this survey is addressed to economists and students of economics who know the tools of their trade but not necessarily how they have been applied to and fashioned for the analysis of the economics of developing countries it is a description of the ways in which problems can be productively formulated and approached in terms of examples chosen for their intrinsic importance and interest the vastness of the subject means that we have to be highly selective it does not seek to provide a summary evaluation of the current view of the appropriate response to immediate policy questions it is not a history of thought nor a research manifesto nor an attempt to adjudicate or settle the major debates where they arise naturally from the major purpose some judgements on these subjects will be offered but they do not themselves constitute the primary intent of this survey there are three lines of enquiry or sets of questions which have i suggest been distinctive of the most fruitful work in development economics they will

nonoptimality of the friedman rule with capital income taxation this paper studies the efficient taxation of money and factor income in intertemporal optimizing growth models with infinite horizons transaction costs technologies and flexible prices second best optimality calls for a positive inflation tax and a non zero capital income tax when there are restrictions on taxation of production factors or profits rents our cases of nonoptimality of the friedman rule which differ from those of mulligan and sala i martin 1997 and extend substantially those of schmitt grohe and uribe 2004a follow from the violation of the diamond and mirrlees 1971 principle on production efficiency

issuer surplus and the partial adjustment of ipo prices to public information abstract this study develops a model in which rational issuers maximize the expected surplus from going public by choosing an offer price that weighs the benefit of higher proceeds if the offer is completed against the cost of foregone surplus if the offer fails increases in the market valuation of comparable firms during the waiting period imply higher surplus associated with going public issuers respond with a partial revision in the offer price to elevate the probability of completion the model offers insights into many facts associated with initial public offering pricing including partial adjustment to market returns the inverse relation between withdrawal and market returns the asymmetric price adjustment to up versus down market returns hot issue markets and unconditional underpricing

fertility volatility and growth abstract empirically growth rates are negatively correlated with birth rates they are also correlated with production risk we argue that these stylized facts are related and arise jointly from the decision of how many children to have in a risky environment

intensive and extensive margins of fertility capital accumulation and economic welfare abstract this paper investigates the impact of low fertility on long term capital accumulation and economic welfare we find that the impact differs depending on whether the low fertility arises from a decrease in the fertility of mothers the intensive margin of fertility or the motherhood rate the extensive margin of fertility we show that an increase in the fertility of mothers decreases the capital stock and economic welfare conversely we identify a u shaped relationship between the extensive margin of fertility and the capital stock because of the existence of two opposing effects such that the decline in fertility may reduce economic welfare furthermore we show that an intragenerational income redistribution policy can eliminate the welfare loss resulting from the incomplete market

the econometrics of elasticities or the elasticity of econometrics an empirical analysis of the behavior of u s imports fifty years of econometric modeling of u s import demand assumes that trade elasticities are autonomous parameters that both cross price effects and simultaneity biases are absent and that expenditures on domestic and foreign goods can be studied independently of each other to relax these assumptions the paper assembles a simultaneous model explaining bilateral u s import volume and prices spending behaves according to the rotterdam model which by design embodies all the properties of utility maximization and does not treat trade elasticities as autonomous parameters pricing behaves according to the pricing to market hypothesis which recognizes exporters incentives to discriminate across export markets parameter estimation relies on the full information maximum likelihood fiml approach and uses bilateral price data for 1965 1987 according to the evidence treating trade elasticities as autonomous parameters and ignoring the statistical implications of simultaneity and optimization biases the structural estimates and undermines our effectiveness in addressing questions relevant to economic interactions among nations

socially optimal social security and education subsidization in a dynastic model with human capital externalities fertility and endogenous growth abstract this paper considers socially optimal government policies in a dynastic family model with physical capital human capital endogenous fertility and positive spillovers from average human capital such spillovers reduce human capital investment but raise fertility from their social optimum we first characterize the social optimum with a non convex feasible set due to the quantity quality tradeoff concerning children we then show that social security and education subsidization together financed by labor income taxes can fully eliminate the efficiency losses of the spillovers and achieve the social optimum under plausible conditions however none of the policies can do so alone

a model of longevity fertility and growth abstract economic and demographic outcomes are determined jointly in a dynamic general equilibrium model of longevity fertility and growth reproductive agents in overlapping generations mature safely through two periods of life and face an endogenous probability of surviving for a third period given this probability each agent maximises her expected lifetime utility by choosing consumption and the number of children child bearing is costly in the sense that time must be spent on child rearing activities rather than on production or education the model produces multiple development regimes which yield different predictions about life expectancy fertility timing of births and educational investment depending on initial conditions these predictions accord strongly with the empirical evidence on demography and development

on the structural stability of trade equations the case of japan abstract this study examines the stability of japanese trade equations over the period 1976 1993 it finds evidence of parameter nondashconstancy in equations for both total and bilateral us japan trade in most of the equations the instability can be traced to changes in specific parameter estimates in the mid 1980s in these cases failure to account for the parameter changes leads to an underestimation of actual trade flows that in some instances is significant by implication standard trade equations estimated from historical data may not be applicable to the analysis of japanese trade in the late 1980s and beyond

the baby boom and baby bust what caused the baby boom and can it be explained within the context of the secular decline in fertility that has occurred over the last 200 years the hypothesis is that a the secular decline in fertility is due to the relentless rise in real wages that increased the opportunity cost of having children b the baby boom is explained by an atypical burst of technological progress in the household sector that occurred in the middle of the last century this lowered the cost of having children a model is developed in an attempt to account quantitatively for both the baby boom and bust

fertility choice land and the malthusian hypothesis in a standard overlapping generations growth model with a fixed amount of land and endogenous fertility the competitive economy converges to a steady state with a zero population growth rate and positive consumption per capita the malthusian hypothesis is interpreted as a positive statement about the relationship between population growth and consumption per capita when production exhibits diminishing returns to labor and there is a fixed amount of land essential for production even when individuals care only about the number of their children and not about their children s welfare the equilibrium is such that they eventually would choose to have only one child for each adult hence if malthus s positive check on population is the result of the response of optimizing agents to competitively determined prices malthus s pessimistic conjecture is not necessarily true even though his other assumptions hold from authors

evidence on the demographic transition abstract this paper finds that fertility responds to productivity differently depending on the economy s stage of development at low levels of development productivity increases will increase fertility while at the more advanced stages of development productivity increases lower fertility during the process there may be important interaction effects between productivity and education demand increases in secondary education demand generate fertility declines regardless of the stage of development

multiple bgps in a growth model with habit persistence this paper establishes multiple balanced growth paths in an otherwise standard competitive growth model without externality or distortions and with households preference dependent upon how his her consumption compares to a habit stock formed by his her own past consumption the key feature in our model is that consumption forms habits in combination with existing habits this model establishes multiple equilibria because habit persistence induces an internal intertemporal complementarity effect among consumption flows with current consumption reinforcing future consumption as a result there exist two balanced growth paths with one path exhibiting low consumption and habits and high economic growth and the other path exhibiting high consumption and habits and low growth that is not necessarily a development trap both steady states are saddles but global indeterminacy arises where a high balanced growth path co exists with a low balanced growth path where the two equilibrium paths cannot be pareto ranked and history need not matter for the selection of the equilibrium path

parameter instability in aggregate us import demand functions abstract the paper examines parameter stability in aggregate us import demand functions for the time period 1972 1990 we identify in particular whether parameter stability depends upon the definitions used to represent the dependent and independent variables significant instability is found for 1974 75 in all models tested for the 1975 1990 period parameter stability depends on the definition of the relative price term employed in the model equations which exclude computer imports tend to have fewer stability problems than non oil import demand models we also find that the most stable models generate the best out of sample forecasts

an intergenerational model of population growth the problem of population growth has been only partially formulated in an intertemporal context therefore a link between population theory and economic growth theory is still missing this paper attempts to provide such a link by analyzing an intergenerational model of optimum population growth the model accommodates the idea that decisions on increases in population should consider the new population s quality of life this concept is elaborated upon in a static framework by gary becker and gregg lewis dennis de tray and robert willis other literature on population growth such as harold votey disregards this consideration altogether 2 more explicitly this paper assumes that the utility of each generation is a function of the level of its consumption and the number and utility of the newly born people we are thus led to consider the utility of an infinite number of generations this model differs from paul samuelson s intergenerational model of pure consumption in which the utility of each generation depends only on that generation s own consumption recently philip neher 1971 analyzed a model of fertility in primitive economies it is based on the assumption that parents use children as investments to insure future consumption needs neher s analysis focuses entirely on the pension motive for having children 3 our model assumes that fertility is determined so as to balance the parents welfare derived from additional children against that derived from the children s quality of life we first outline a general model of optimum population growth in order to discuss explicitly various economic aspects of population we use a simple case in the analysis section i sets up the basic model

critical survey endogenous growth theory a critical assessment a critical assessment is made of endogenous growth theory from the perspective of recent developments within economics as a discipline these include its increasing mathematical formalisation its focus upon microfoundations the casual use of econometrics to test models and the incorporation of factors that have traditionally been outside mainstream economics it is found that the theory focuses upon market imperfections and technological progress in a variety of ways and reconstructs their impact upon the macroeconomy as a growth rather than as a level effect whilst the growth rate is endogenised this leads to the problem of multiple equilibria and extremely complex dynamics the generalisation from exogenous growth theory is however associated with even more extreme assumptions and analytical distance from the socioeconomic processes of growth itself copyright 2000 by oxford university press

different approaches of modelling reaction lags how do chilean manufacturing exports react to movements of the real exchange rate this study examines the relationship between export supply and the real exchange rate using annual chilean data for the period 1960 1996 the hypotheses to be tested are first that the real exchange rate does matter for the supply of exports contrary to studies relying on quarterly data and second that the impact of a real depreciation only ceases to be positive and significant after about two three years four different distributed lag models were considered as potentially adequate and useful to depict the impact of the real exchange rate over time even though all four models assumed different underlying lag structures they all point to the importance of maintaining a competitive real exchange rate over time the transfer function model is particularly well suited in shaping any lag structure in that it is not presumptive in form

more on marriage fertility and the distribution of income according to pareto 1896 the distribution of income depends on the nature of the people comprising a society on the organization of the latter and also in part on chance in the model developed here the nature of the people is captured by attitudes toward marriage divorce fertility and children singles search for mates in a marriage market married agents bargain about work and the quantity and quality of children they can divorce social policies such as child support requirements reflect the organization of the society finally chance is modeled by randomness in income marriage opportunities and marital bliss

is the ipo pricing process efficient this paper investigates underwriters treatment of public information throughout the ipo pricing process two key findings emerge first public information is not fully incorporated into the initial price range while the economic magnitude of the bias is small it is puzzling because it is not clear who benefits from it further it indicates that the filing range midpoint is not an unbiased predictor of the offer price as prior literature has assumed second while public information is similarly not fully incorporated into the final offer price the small economic significance of this relation indicates that the ipo pricing process is almost efficient

the problem of population and growth a review of the literature from malthus to contemporary models of endogenous population and endogenous growth abstract this paper deals with the evolution of the literature on the problem of population and growth from the classical period to the recent literature on endogenous growth and development the problem concerns two distinct issues 1 how to explain the observed covariation of the levels and rates of growth of per capita income and population size over time and space and 2 how to improve the human condition represented by these variables through an accommodating social policy the evolution of the literature we survey is reflected by the progressive treatment of key variables as endogenous rather than exogenous to the growth process it is also reflected by a shift from the historical concern about population explosion and its implications for growth to the more recent concern about the association between growth and population implosion in many developed countries

fertility choice and economic growth theory and evidence this proposed theoretical model is based on new models of barro and becker and becker murphy and tamura and explains the interaction of family decisions about fertility and the macroeconomy in a growth situation the proposed model captures a dynamic interaction between labor leisure and fertility choice and a structural fertility preference shock endogenous factor are consumption labor leisure and fertility while exogenous factors are production and utility parameters the aim was to develop a general equilibrium model which expresses short and long term dynamics to test the impact of economic disturbances on fertility and to explain the us baby boom and subsequent fertility patterns savings in capital accumulation and in labor supply were expected to have ambiguous effects while improved productivity was expected to increase steady state consumption the methodology a structural vector auto regression var model was developed by blanchard and quah and ihmed ickes wang and yoo structural impacts include disturbances in employment fertility theoretical preference shift and output long term restrictions are based on theory rather than on ad hoc causal orderings sims method or current responses bernanke method the structural var model is estimated using the logged differences of labor fertility rate and output the empirical results are based on analysis of us data 1949 88 on fertility weekly hours worked and real gross national product the model revealed that fertility choice should not be considered exogenous to the labor market or to economic growth variance of the forecast error for the fertility rate was significantly explained by employment shocks the effect was reduced fertility and increased labor force effort output responses to fertility and technology shocks were similar to those reported by shapiro and watson in the variance decomposition analysis output shocks explained about 33 of output variance fertility shocks explained about 33 of labor growth and 25 of output growth after the first year with a lag of one year about 37 of fertility variance was explained by employment shocks concluding remarks underscore the importance of knowing which shock initiated the motion and causal ordering

can government enforcement permanently alter fertility the case of china i introduction in developing countries per capita output growth objectives are often stymied by high birth rates 1 traditional values ignorance of birth control technology and labor intensive farming are all factors which contribute to high fertility rates for those reasons many developing countries experiencing high birth rates adopt population control policies while most programs combine educational efforts with some form of persuasion many also provide strong economic disincentives to high fertility 2 of particular interest from this vantage point is the experience of the people s republic of china which stands alone in its use of quotas on child bearing decisions 3 china s population control policy began with a massive campaign in 1953 reversing an earlier pro natalist stance however that campaign was curtailed by the political turmoil arising from the great leap forward and the cultural revolution population control programs resumed in 1970 with the issuance and enforcement of three reproductive norms late marriage longer spacing between births and fewer children in 1979 the authorities went even further allowing each household to have only one child interest in china s experience arises not only from the severity of the restrictions but also due to the government s ability to enforce them the feasibility of enforcing these restrictions is a result of the deep penetration of the communist party into most aspects of an individual s life including its control over housing employment and salaries 4 however despite the government s extensive involvement in birth planning those who study chinese demography have debated the extent to which government policies are responsible for the large fertility decline in the 1970s 5 this paper uses recent advances in economic theory and econometrics to quantitatively assess the main sources of fertility fluctuations in china specifically we employ a model with endogenous fertility choice which modifies the framework of razin and ben zion 1975 and barro and becker 1989 6 in contrast to other papers we focus on the relationship between government enforcement of population control policies and fertility outcomes we also allow the fertility rate to be affected by 1 household preferences including alterations in taste as well as in education health care and the changing role of women and 2 production technology which mostly captures changes in agricultural output or income we perform simple comparative static analysis to examine long cycles in fertility and output and characterize the transitional dynamics which govern short cycles easterlin 1968 and lee and loschky 1987 provide nice discussions of long fertility cycles the long run steady state predictions will be used to identify the empirical structural vector autoregression var system as well as interpret the underlying structural disturbances additionally the transitional dynamics results can be compared to the estimated dynamic structure finally we employ a structural var as in blanchard and quah 1989 and ahmed ickes wang and yoo 1993 to econometrically disentangle the relative contributions of policy and economic development factors to changes in fertility growth the structural disturbances include a change in the government s enforcement power a technological advance in agricultural production and a preference shift toward a higher fertility rate all of which are capable of generating both short and long cycles in fertility and output we find that government enforcement power has a significant negative effect on fertility accounting for about one third of the variance of the forecast error for fertility growth after the first year an expansion in agricultural output on the other hand yields a short run positive impact on fertility growth and is responsible for almost one fifth of fertility growth variations furthermore while theoretically all shocks have the potential to generate long cycles only preference shifts have statistically significant long run effects

productive consumption and population dynamics in an endogenous growth model demographic trends and human development aid in developing economies abstract we find that by endogenizing the population growth rate a growth model under the productive consumption hypothesis is more tractable than models in previous studies and has interesting implications for population dynamics in the zero saving phase multiple saddle point stable steady states may exist and the population growth rate may rise or decline along a transition path in the positive saving phase such a steady state may exist uniquely and the population growth rate may decline with phase switching the population growth rate may follow an inverted u shaped curve human development aid may help an economy escape from an underdevelopment trap

bookbuilding how informative is the order book we examine the institutional bids submitted under the bookbuilding procedure for a sample of international equity issues we find that information in bids which include a limit price especially those of large and frequent bidders affects the issue price oversubscription has a smaller but significant effect for ipos public information affects the issue price to the extent that it is reflected in the bids oversubscription and demand elasticity are positively correlated with the first day aftermarket return and demand elasticity is negatively correlated with aftermarket volatility our results support the view that bookbuilding is designed to extract information from investors

entertaining malthus bread circuses and economic growth we augment a simple malthusian model by allowing agents to consume something besides food whereas food in our case bread is both enjoyable and necessary for survival the other good circuses is pure entertainment it has absolutely no impact on survival but does enhance the quality of life with this very simple modification we show that whereas food supply may remain at subsistence technological change will have a great impact on the consumption of everything else most strikingly though the population remains bound by a malthusian constraint sustained improvements to living standards can no longer be ruled out we also argue that our model better fits the known historical facts the widely held belief that growth prior to the industrial revolution was flat is based largely on historical measures of food production although food supply throughout history may have been and for most individuals still is at or near subsistence levels technological advancements have brought greater convenience and comfort to wealthy and poor alike a possibility that malthus himself conceded in his later and often ignored work therefore our model not only describes historical growth patterns and demographic transitions better than traditional malthusian models but is also more in line with malthus later thinking jel classification numbers b10 i31 j1 n1 o30

peasants procreation and pensions producers and consumers durable goods yielding a stream of benefits which are compared with a stream of costs births occur if the present value of the benefits exceeds the present value of the costs the theory has been used by malthusians to rationalize the casual observation that population growth rates increase during the early stages of economic development and then perhaps fall later on as

capital accumulation income distribution and endogenous fertility in an overlapping generations general equilibrium model abstract this paper studies the intertemporal relationships among population growth income distribution inter generational social mobility skill composition of the labor force and household income in an overlapping generations general equilibrium model that aggregates household decisions regarding fertility savings and investment in human capital of children it shows that as a consequence of endogenous fertility the equilibrium path attains steady state from the second generation income tax transfer child taxation and social security taxation policies that can be devised to affect these variables are also analyzed the model provides a structural explanation for the inverse household income child quantity and negative child quality quantity relationships that are observed in developing countries it also shows that group interests may hinder the emergence of perfect capital markets with private initiatives

non convexities in continuous time investment theory that non convex preferences or technologies cause problems for economic theory is well known in recent years there have been numerous contributions to the nonconvexity problem in the context of models with a finite dimensional commodity space in the capital theory context non convexities have received explicit treatment in a few papers in two distinguishable ways the problem is cast either in a discrete time framework aoki 1971 rothschild 1971 or in a continuous time framework in which there are implicitly unbounded economies of scale in investment the latter formulation leads to jumps in the state variable or lumpy investment the standard problem treated is one of decreasing costs in the installation of new capacity contributions include chenery 1952 dixit mirrlees and stern 1975 hartwick 1976 manne 1967 srinivasan 1967 starrett 1978 and weitzman 1970 these types of analysis unfortunately ignore some of the most interesting problems associated with non convexities in investment theory in a discrete time framework the important distinction between stocks and flows is blurred while the capacity installation problem by admitting unbounded scale economies excludes the smoothing of state variables that follows by allowing for eventually increasing costs of adjustment in this paper we undertake a systematic examination of non convexities or sometimes non concavities in the context of a classic problem in continuous time investment theory the optimal accumulation of capital by a firm maximizing its present value over an infinite horizon while the results obtained are specific to this particular model we feel that they can be qualitatively extended to any capital theory problem which can be cast in a continuous time optimal control theory framework there are various sorts of non2 convexities which can arise in these problems first there can be either stock or flow non convexities that is non convexities which are introduced into the net benefit function the measure of the flow of benefits at each moment through changes in the capital stock state variable on the one hand or changes in the flow of investment control variable on the other if the benefit and transition functions are not concave in both these variables then necessary conditions are no longer sufficient for optimality and conventional marginal analysis fails non convexities can also be introduced into the value functional which has a stock dimension in order to examine these different sorts of non convexity problems we shall now present the basic economic problem a firm is faced with the problem of maximizing the present value of discounted cash flow over an infinite horizon hence it chooses an investment programme i t to maximize 00

bilateral trade elasticities this paper estimates income and price elasticities for bilateral world trade in addition to testing the properties of the error terms the dynamic specification and the assumption of parameter constancy the analysis presents the first application of the bank spectrum estimator to bilateral trade flows for all countries the paper finds that bilateral trade elasticities exhibit enough of a dispersion to suggest that the direction of trade is sensitive to changes in income and prices using the bilateral elasticities as raw data the analysis obtains the associated multilateral estimates and finds that they are both consistent with the literature and suitable to addressing questions involving multilateral trade but the evidence also reveals that sole reliance on multilateral elasticities conceals valuable information for both policy applications and empirical analyses of international trade copyright 1990 by mit press

health spending savings and fertility in a lifecycle dynastic model with longevity externalities we investigate health spending savings fertility and policy implications in a lifecycle dynastic model with longevity externalities in annuity returns we show that such externalities engender not only excessive health spending but also under saving and excessive fertility social security and health subsidization increase health spending and savings but reduce fertility from laissez faire levels a publicly funded universal health system under labour income taxation raises fertility taxing health spending or using social security and public health together can obtain socially optimal health spending savings longevity and fertility numerical results based on us observations suggest substantial variations among these cases especially in old age health spending

population growth and economic growth a reconsideration abstract in an endogenous growth model endogenous fertility a neo malthusian relation emerges only when all exogenous variables are controlled for this suggests that conflicting findings in the literature may originate from heterogeneity in unobserved variables in cross country panel data sets

public information ipo price formation and long run returns japanese evidence the price formation process of jasdaq ipos is more transparent than in the united states the transparency facilitates analysis of important issues in the ipo literature why offer prices only partially adjust to public information and adjust more fully to negative information and why adjustments are related to initial returns the evidence indicates that early price information conveys the underwriter s commitment to compensate investors for acquiring and or disclosing information offer prices reflect pre ipo market values of public companies and implicit agreements between underwriters and issuers that originate well before the offering underadjustment of offer prices is substantially reversed in the aftermarket copyright c 2009 the american finance association

why don t issuers get upset about leaving money on the table in ipos one of the puzzles regarding initial public offerings ipos is that issuers rarely get upset about leaving substantial amounts of money on the table defined as the number of shares sold times the difference between the first day closing market price and the offer price the average ipo leaves 9 1 million on the table this number is approximately twice as large as the fees paid to investment bankers and represents a substantial indirect cost to the issuing firm we present a prospect theory model that focuses on the covariance of the money left on the table and wealth changes our reasoning also provides an explanation for a second puzzling pattern much more money is left on the table following recent market rises than after market falls this results in an explanation of hot issue markets we also offer a new explanation for why ipos are underpriced copyright 2002 oxford university press

economic geography fertility and migration abstract this paper analyzes the relationship among economic geography fertility and migration the empirical evidence presented reveals that persistent regional variations in fertility exist within a country and that regional total fertility rates are negatively related to regional population density a two period overlapping generations model of endogenous fertility incorporating n regions agglomeration economies and congestion diseconomies is constructed to explain this negative relationship while agglomeration economies have both positive income and negative substitution effects on fertility congestion diseconomies have a negative income effect on it combined with the mobility of people interaction among these effects generates the negative relationship as a steady state equilibrium outcome it is also shown that net migration from regions with lower population density to regions with higher population density occurs in an equilibrium which in turn maintains the regional variations in fertility

the pay as you go pension system as fertility insurance and an enforcement device a paygo system may serve as insurance against not having children and as an enforcement device for ungrateful children who are unwilling to pay their parents a pension in fact the latter was bismarck s historic motive for introducing this system it is true that the paygo system reduces the investment in human capital but if it is run on a sufficiently small scale it may nevertheless bring about a welfare improvement if on the other hand the scale of the system is so large that parents bequeath some of their pensions to their children it is overdrawn and creates unnecessarily strong disincentives for human capital investment

population and the environment a parable of firewood and other tales the author analyzes the relationship between population and the environment with a focus on the role which environmental degradation and natural resources depletion may play in producing the population pressure which lies behind such degradation and depletion especially in developing countries the principal conclusion of this analysis is that the possibilities for a stable equilibrium between human population and its environment are quite limited i show that parental altruism toward their children can only make matters worse if socially unchecked by leading to an increase of the birthrate in every environmental state in comparison with that which would occur in its absence excerpt

the u s demographic transition between 1800 and 1940 the u s went through a dramatic demographic transition in 1800 the average woman had 7 children and 94 percent of the population lived in rural areas by 1940 the average woman birthed just 2 kids and only 43 percent of populace lived in the country the question is what accounted for this shift in the demographic landscape the answer given here is that technological progress in agriculture and manufacturing explains these facts

the brain drain and the world distribution of income abstract skilled emigration or brain drain from developing to developed countries is becoming the dominant pattern of international migration today such migration is likely to affect the world distribution of income both directly through the mobility of people and indirectly as the prospect of migration affects the rate of return to education in both the sending and receiving economies this migration pattern will therefore affect human capital accumulation and fertility decisions in both the sending and receiving economies this paper analyzes these effects in a dynamic two country model of the world economy where agents in both countries make optimal fertility and human capital decisions the implications of the analysis for the world distribution of income are derived in the light of recent empirical findings of the brain drain literature the analysis shows that the current trend towards predominantly skilled emigration from poor to rich countries may in the long run increase inequality in the world distribution of income as relatively poor countries grow large in terms of population in the short run however it is possible for world inequality to fall due to rises in gdp per capita in large developing economies with sufficiently low skilled emigration rates

social norms fertility and economic development abstract this paper presents an overlapping generations model with endogenous fertility and human capital accumulation within such a framework it shows how the presence of family size norms can lead to multiple equilibria it can thus potentially explain different development patterns without recourse to increasing returns and differences in initial conditions furthermore it derives sufficient conditions under which different equilibria can be pareto ranked finally it shows that the main results hold also in the case where there exists parental altruism

costs of adjustment and the spatial pattern of a growing open city this paper investigates the effect of costs of adjustment on the dynamic characteristics of intra urban resource allocation the analysis is concentrated on the development pattern of an open city within a system of many cities both in steady state and in variable state economies competitive equilibrium of the urban system as a whole is also discussed and compared to pareto optimum allocation some of the results that characterize the resource allocation under static analysis are reestablished for the dynamic case as well but others that follow from comparative statics are shown to be incorrect under the dynamic analysis

endogenous fertility multiple growth paths and economic convergence abstract this paper extends the cass koopmans optimal growth model to allow for endogenous fertility choice it is shown that if agents choose their fertility rate then the net rate of return on capital marginal product of capital minus the population growth rate may not be monotonically decreasing in capital in this case multiple steady states and growth paths may emerge which can explain the persistent differentials in income between poor and rich countries as well as the existence of development miracles and disasters the paper provides also empirical evidence which supports the existence of multiple convergence groups and is consistent with the theoretical model

an empirical examination of the structural stability of disaggregated u s import demand we present three related types of evidence on u s import demand first aggregate import demand is reestimated for comparison with previous research second we provide updated estimates of import demand for five economic classes crude foods crude materials manufactured foods semi manufactures and finished manufactures finally each of these import demand functions is tested for any evidence of structural instability and in those cases where instability is detected the demand equations are reestimated along the lines suggested by the stability tests copyright 1989 by mit press

population growth and human capital investments theory and evidence this paper presents evidence from empirical studies that test hypotheses derived from models of household behavior pertaining to the interrelationships among population growth human capital and economic development these studies have exploited quasi natural experiments embodied in the cross area variability in the wage rates of children in a number of low income countries the intercouple variation in the biological propensity to conceive and the geographically selective introduction of new high yielding seed varieties in india in the period 1961 71 the different varieties of evidence support the hypotheses that alterations in the returns to human capital associated with exogenous technical change lead simultaneously to increases in human capital investments and to reductions in fertility and that the costliness of fertility control is a significant but modest factor in inhibiting human capital investments

social security and endogenous fertility pensions and child allowances as siamese twins abstract this paper analyses public pensions and child support in a model with endogenous fertility we show that the individual fertility choice may not coincide with the social optimum due to the existence of external effects of children on society as a whole the market outcome without government intervention is efficient however as the externalities exactly cancel out in that case if the government wants to redistribute towards the old it cannot replicate the command optimum by merely applying lump sum transfers but rather needs a child allowance scheme to effectively alter the number of offspring finally we analyse whether a pareto improving social security reform is possible it is shown that merely reducing the payg scheme cannot be pareto improving but the introduction of a child allowance scheme can be

social security intergenerational transfers and endogenous growth in this paper the effects of social security in a simple model of endogenous growth with alternative motives of having children are analyzed it shows how the effects of social security depend on the size of the social security tax the motive to have children and the pattern of intergenerational transfers the pattern of intergenerational transfers itself however is shown to change with the social security tax rate when the social security tax is not too high social security increases per capita income growth and tends to enhance welfare

contraception and development a unified growth theory this study investigates the interaction of the use of modern contraceptives fertility education and long run growth it develops an economic model that takes into account that sexual intercourse is utility enhancing and that birth control by modern contraceptives is more efficient but more costly than traditional methods the study shows how a traditional economy in which modern contraceptives are not used gradually converges toward a high growth regime in which modern contraceptives are used lower prices or higher efficacy of contraceptives are conducive to an earlier onset of the fertility transition and a quicker takeoff to modern growth