cores of inventory centralization games abstract consider a set of n stores with single item and single period demands assume an option of centralized ordering and inventory with holding and penalty costs only in this case a cooperative inventory centralization game defines allocations of the cost we examine the conditions under which such an inventory centralization game has a nonempty core we prove the existence of nonempty core for demands with symmetric distributions and the existence of nonempty core for joint multivariate normal demand distribution we establish the equivalency of four different nonempty core conditions for the newsboy problem and demonstrate their efficacy for discrete independent and identically distributed iid demands journal of economic literature classification numbers c44 c62 c71

credit market constraints consumption smoothing and the accumulation of durable production assets in low income countries investments in bullocks in india in this paper we formulate and estimate a finite horizon structural dynamic model of agricultural investment behavior that incorporates the major features of low income agricultural environments income uncertainty constraints on borrowing and rental markets and the use of investment assets to generate income and smooth consumption the model is fit to longitudinal indian household data on farm profits bullock stocks and pump sets the estimated structural parameters are used to assess the effects on the life cycle accumulation of bullocks agricultural profits and welfare associated with complete markets and bullock liquidity and with second best policies that provide assured sources of income to farmers and weather insurance

non existence of market clearing wages when the output market is imperfectly competitive abstract in a sector in which oligopolistic firms face a sector specific labour supply constraint there may be no market clearing wage instead at some wages there can be two equilibria one with involuntary unemployment and one with unfilled vacancies

equilibria and efficiency in the fixprice setting abstract the aim of this paper is to study efficiency under fixed price constraints and to define an equilibrium concept that extends to some degree the standard welfare analysis of general equilibrium theory this paper contains a description of the fixprice setting a study of the set of relatively pareto efficient allocations a definition of coupon equilibria the proof of their existence and an investigation into the structure of the set of coupon equilibria and of the set of economies admitting efficient coupon equilibria

the effects of selling packaged goods on inventory decisions in this paper we study within a newsboy type modeling framework the common business practice of retail firms to sell products not only as independent items but also as part of multiproduct packets packaged goods our emphasis is on understanding the effects of such practices on the inventory decisions of the firm we provide insights on the resulting level of suboptimality when inventory decisions are made with demand information only on the independent items and without accounting for the demand substitution structure induced between independent items and packaged goods our stylized model studies an environment with two products that are not direct substitutes for each other sold either independently or as part of a packet that contains one unit of each we provide necessary and sufficient optimality conditions for this model and suggest an efficient numerical search for obtaining the optimal stocking levels an extensive computational study allowed us to provide insights on the nature of the optimal stocking policies the suboptimality of independent newsboy policies the effects of demand correlation among individual products and multiproduct packets and the determining role of induced substitution structure among products during stockout occasions on the profitability of the inventory system

climate change policy what do the models tell us very little a plethora of integrated assessment models iams have been constructed and used to estimate the social cost of carbon scc and evaluate alternative abatement policies these models have crucial flaws that make them close to useless as tools for policy analysis certain inputs e g the discount rate are arbitrary but have huge effects on the scc estimates the models produce the models descriptions of the impact of climate change are completely ad hoc with no theoretical or empirical foundation and the models can tell us nothing about the most important driver of the scc the possibility of a catastrophic climate outcome iam based analyses of climate policy create a perception of knowledge and precision but that perception is illusory and misleading jel c51 q54 q58

the newsvendor game has a nonempty core we settle an open conjecture regarding the newsvendor game we prove that its core is always non empty for all possible joint distributions of the random demands we give sufficient conditions under which the core is a singleton or it contains non negative elements

on monopolistic competition and involuntary unemployment in a simple temporary general equilibrium model it is shown that if the number of firms is small imperfect price competition in the markets for goods may be responsible for the existence of unemployment at any given positive wage in our examples involving two firms facing their true demand curves total monopolistic labor demand remains bounded as the wage rate goes to zero and unemployment prevails for a sufficiently large inelastic labor supply in the competitive case total labor demand would go to infinity and intersect labor supply at a positive wage

pricing and the news vendor problem a review with extensions in the newsvendor problem a decision maker facing random demand for a perishable product decides how much of it to stock for a single selling period this simple problem with its intuitively appealing solution is a crucial building block of stochastic inventory theory which comprises a vast literature focusing on operational efficiency typically in this literature market parameters such as demand and selling price are exogenous however incorporating these factors into the mode l can provide an excellent vehicle for examining how operational problems interact with marketing issues to influence decision making at the firm level in this paper we examine an extension of the newsvendor problem in which stocking quantity and selling price are set simultaneously we provide a comprehensive review that synthesizes existing results for the single period problem and develop additional results to enrich the existing knowledge base we also review and develop insight into a dynamic inventory extension of this problem and motivate the applicability of such models

the economics of poverty traps and persistent poverty an asset based approach abstract longitudinal data on household living standards open the way to a deeper analysis of the nature and extent of poverty while a number of studies have exploited this type of data to distinguish transitory from more chronic forms of income or expenditure poverty this paper develops an asset based approach to poverty analysis that makes it possible to distinguish deep rooted persistent structural poverty from poverty that passes naturally with time due to systemic growth processes drawing on the economic theory of poverty traps and bifurcated accumulation strategies this paper briefly discusses some feasible estimation strategies for empirically identifying poverty traps and long term persistent structural poverty as well as relevant extensions of the popular foster greer thorbecke class of poverty measures the paper closes with reflections on how asset based poverty can be used to underwrite the design of persistent poverty reduction strategies

the competitive newsboy we consider a competitive version of the classical newsboy problem in which a firm must choose an inventory or production level for a perishable good with random demand and the optimal solution is a fractile of the demand distribution and investigate the impact of competition upon industry inventory a splitting rule specifies how initial industry demand is allocated among competing firms and how any excess demand is allocated among firms with remaining inventory we examine the relation between equilibrium inventory levels and the splitting rule and provide conditions under which there is a unique equilibrium our most general result is that if all excess demand is reallocated i e there is perfect substitutability then competition never leads to a decrease in industry inventory

some economics of global warming the greenhouse effect itself is simple enough to understand and is not in any real dispute what is in dispute is its magnitude over the coming century its translation into changes in climates around the globe and the impacts of those climate changes on human welfare and the natural environment these are beyond the professional understanding of any single person the sciences involved are too numerous and diverse demography economics biology and the technology sciences are needed to project emissions atmospheric chemistry oceanography biology and meteorology are needed to translate emissions into climates biology agronomy health sciences economics sociology and glaciology are needed to identify and assess impacts on human societies and natural ecosystems and those are not all there are expert judgments on large pieces of the subject but no single person clothed in this panoply of disciplines has shown up or is likely to this article makes an attempt to forecast the economic and social consequences of global warming due to anthropogenic greenhouse gases and attempting to prevent it

welfare dynamics in rural kenya and madagascar this paper presents comparative qualitative and quantitative evidence from rural kenya and madagascar in an attempt to untangle the causality behind persistent poverty we find striking differences in welfare dynamics depending on whether one uses total income including stochastic terms and inevitable measurement error or the predictable structural component of income based on a household s asset holdings our results suggest the existence of multiple dynamic asset and structural income equilibria consistent with the poverty traps hypothesis furthermore we find supporting evidence of locally increasing returns to assets and of risk management behaviour consistent with poor households defence of a critical asset threshold through asset smoothing

involuntary unemplyment in imperfectly competitive general equilibrium models this paper is about involuntary unemployment in general equilibrium models with imperfect competition it surveys papers written after the seminal work of d aspremont dos santos ferreira and gerard varet 1984 this unemployment is called involuntary because it exists at any wage it results from imperfect competition in the product markets more specifically from firms excessive market power these papers have focussed their attention on the conditions required for involuntary unemployment in our presentation we characterise this form of unemployment through three elements consumers preferences price expectations and ford effects each element is important because it influences the demand for the good and hence its price elasticity the latter being central in the definition of firms market power jel classification d43 e24

business cycle comovement in the g 7 common shocks or common transmission mechanisms what are the sources of macroeconomic comovement among g 7 countries two main candidate explanations may be singled out common shocks and common transmission mechanisms in the article it is shown that they are complementary rather than alternative explanations by means of a large scale factor vector autoregressive fvar model allowing for full economic and statistical identification of all global and idiosyncratic shocks it is found that both common disturbances and common transmission mechanisms of global and country specific shocks account for business cycle comovement in the g 7 countries moreover spillover effects of foreign idiosyncratic disturbances seem to be a less important factor than the common transmission of global or domestic shocks in the determination of international macro economic comovements

inventory centralization games with price dependent demand and quantity discount consider a distribution system consisting of a set of retailers facing a single period price dependent demand of a single product by taking advantage of the risk pooling effect and the quantity volume discount provided by suppliers or third party carriers the retailers may place joint orders and keep inventory at central warehouses before demand realization and allocate inventory among themselves after demand realization to reduce their operating costs under rather general assumptions we prove that there is a stable allocation of profits among the retailers in the sense that the resulting inventory centralization game has a nonempty core we also show how to compute an allocation in the core

the impossibility of involuntary unemployment in an overlapping generations model with rational expectations abstract if there is unemployment no matter how low the wage rate becomes one speaks of involuntary unemployment this phenomenon has been shown to arise in a variety of temporary or atemporal macro models with imperfect competition in the goods markets in this paper we investigate whether the phenomenon of involuntary unemployment arises in a hartian overlapping generations model with rational expectations it does not neither in the short nor in the long run

risk crop choice and savings evidence from tanzania rural households engaged in agricultural activities face considerable risks in their income process these income risks are especially important if they result in consumption fluctuations this is likely if insurance and credit markets are absent one possible strategy for household is to take up low risk activities even if they imply lower returns such response cannot be viewed independently from the other options available to households to reduce consumption fluctuations this paper focuses on the importance of liquid asset formation for risk taking behaviour by households an intertemporal model of consumption under liquidity constraints is developed in which households can choose between income activities with different returns and riskiness it shows that if liquid asset holdings are large providing a buffer for consumption shortfalls then households will be more willing to take up high risk activities evidence based on survey data from shinyanga district tanzania is presented consistent with this prediction this abstract was borrowed from another version of this item

the welfare effects of crop biodiversity as an adaptation to climate shocks in kenya abstract this paper investigates the effects of crop biodiversity on farm income and production risk using a large panel dataset of rural households in kenya we consider three different metrics of in situ on farm crop diversification richness evenness and concentration we apply a partial moments based model to test the effects of each strategy on welfare defined as expected crop income variability variance and downside risk skewness our comprehensive econometric approach differentiates climatic shocks weather and climate change the results suggest that the benefits from greater diversification in terms of enhanced land productivity and lower production costs could surpass the foregone benefit from greater efficiency associated with more concentrated production systems crop richness and evenness each reduce exposure to crop income risk especially for more vulnerable farmers who produce below the expected revenue threshold farmers who rely on greater crop specialization on the contrary are more exposed to crop income risk

consumption versus asset smoothing testing the implications of poverty trap theory in burkina faso abstract despite solid theoretical foundations for the notion that poor borrowing constrained households will intertemporally manage assets to smooth consumption the consumption smoothing hypothesis has not always withstood empirical scrutiny this paper reassesses the intertemporal asset management problem with a poverty trap model and shows that we would expect to see asset smoothing not consumption smoothing in the neighborhood of critical asset levels at which optimal accumulation behavior bifurcates we then employ threshold estimation techniques to empirically confirm the co existence of consumption and asset smoothing regimes using a household panel data set from west africa households above the estimated threshold almost completely insulate their consumption from weather shocks whereas those below the threshold do not these results not only indirectly provide evidence of the existence of poverty traps but also speak to the level and incidence of the costs of uninsured risk

large newsvendor games we consider a game called newsvendor game where several retailers who face a random demand can pool their resources and build a centralized inventory that stocks a single item on their behalf profits have to be allocated in a way that is advantageous to all the retailers a game in characteristic form is obtained by assigning to each coalition its optimal expected profit we consider newsvendor games with possibly an infinite number of newsvendors we prove in great generality results about balancedness of the game and we show that in a game with a continuum of players under a nonatomic condition on the demand the core is a singleton for a particular class of demands we show how the core shrinks to a singleton when the number of players increases

the economics of poverty traps and persistent poverty empirical and policy implications the moral and economic imperatives to intervene in poverty traps motivate the identification of poverty traps and their structural causes so as to inform the design of appropriate policy responses however empirical identification remains challenging because of poverty traps complexity after reviewing mechanisms that can generate poverty traps we focus on one multiple financial market failures emphasising its heretofore underappreciated testable implications including specific behaviours that are rational only in the presence of a poverty trap we therefore recommend tests for these behaviours rather than more econometrically challenged efforts to directly test for poverty traps in estimated asset dynamics

income smoothing and consumption smoothing one way that risk averse households protect consumption levels is to borrow and use insurance mechanisms another way common in low income economies is to diversify economic activities and make conservative production and employment choices households thus tend toward limiting exposure only to shocks that can be handled with available credit and insurance typically both types of mechanisms are studied independently but much more can be learned by studying them together first we obtain a more complete picture of risks costs and insurance possibilities second it opens the way to considering biases in standard tests of credit and insurance

a three person game theory model arising in stochastic inventory control theory abstract in this paper we build a game theory model for a single period inventory problem where each of three retailers tries to determine his optimal order quantity their products are substitutable and have random demands therefore multiple direction demand transfers occur when one or more retailers are sold out it is shown that by using nash equilibrium optimal decision exists for each retailer when they work independently the optimal order quantity in this case is larger than that under the newsboy problem model this is because substitution can be a source of sales and hence a justification for inventory in situations where some retailer may act irrationally to inflict a damage on the others the defensive strategy for the latter is to totally ignore the existence of the irrational player we also study the cooperation of retailers by switching excess inventory to those who have excess demand both when side payments are and are not allowed if side payments are not allowed secure nash strategies always exist for each retailer and cooperation will reduce inventory the latter is especially true when the depreciation of value of the item and or inventory carrying cost are large we give conditions for cooperation in both cases and show that although all player cooperation is often feasible it may not always be obtainable even if side payments are allowed

the structure of economic modeling of the potential impacts of climate change grafting gross underestimation of risk onto already narrow science models scientists describe the scale of the risks from unmanaged climate change as potentially immense however the scientific models because they omit key factors that are hard to capture precisely appear to substantially underestimate these risks many economic models add further gross underassessment of risk because the assumptions built into the economic modeling on growth damages and risks come close to assuming directly that the impacts and costs will be modest and close to excluding the possibility of catastrophic outcomes a new generation of models is needed in all three of climate science impact and economics with a still stronger focus on lives and livelihoods including the risks of large scale migration and conflicts

the euro changeover and its effects on price transparency and inflation despite the expectations of economists that the euro changeover would have no effect on prices european consumers perceived the opposite to shed some light on this puzzle we develop a model of imperfect information in which cheaper goods experience higher price growth after the changeover retailers aware of consumers difficulties in adopting the new currency use currency changeovers to increase profits by increasing prices the lower the price transparency after the changeover the higher the euro related inflation using data on inflation eurostat and price levels economist intelligence unit we show that although the euro changeover did not significantly increase inflation it nevertheless had a distortionary effect on prices after the changeover cheaper goods had higher inflation and this effect was stronger in countries in which people found dealing with the new currency problematic

rational fix price dynamics abstract we study a macroeconomic model where stabilization problems arise as the result of a dynamic game of income distribution between capitalists and workers the two agents control the supply sides of the goods and labor markets respectively using price changes as strategic variables and a static fix price model with money labor and one macro commodity to correctly predict the behaviour of the economy at each instant of time the resulting medium run price dynamics is consistent with major stylized facts on business cycles it accounts for an empirical regularity that has been left unexplained by other models and suggests a new relationship between the functional income distribution and the economy s sensitivity to shocks

consumption insurance an evaluation of risk bearing systems in low income economies the hypothesis of full risk sharing can be taken to data from low income countries and evaluate formal and informal financial systems in many contexts idiosyncratic risks are high so credit insurance arrangements could be beneficial statistical tests reveal that households in southern india take advantage of these possibilities villages in cote d ivoire and countries in thailand do not do as well the paper includes an empirical description of the devices used to smooth consumption and a theoretical discussion of private information and incentives on ideal operating systems the full information and mechanism design frameworks provide benchmarks for policy analysis

undominated prices in the three good model abstract any movement away from walrasian prices will make somebody worse off we ask which other prices share this property the paper characterizes the set of such prices called undominated prices for the three good economy output labor and a nonproduced good that is now well known from the work of barro grossman benassy and malinvaud we consider two groups of consumers workers and shareholders we show that under some conditions there exist prices and wages that generate unemployment and are undominated this requires that a workers be poorly endowed with the nonproduced good b there be little substitution in consumption between the produced and the nonproduced good and c the market for the produced good be balanced i e prices equal marginal costs

what do we learn from the weather the new climate economy literature a rapidly growing body of research applies panel methods to examine how temperature precipitation and windstorms influence economic outcomes these studies focus on changes in weather realizations over time within a given spatial area and demonstrate impacts on agricultural output industrial output labor productivity energy demand health conflict and economic growth among other outcomes by harnessing exogenous variation over time within a given spatial unit these studies help credibly identify i the breadth of channels linking weather and the economy ii heterogeneous treatment effects across different types of locations and iii nonlinear effects of weather variables this paper reviews the new literature with two purposes first we summarize recent work providing a guide to its methodologies datasets and findings second we consider applications of the new literature including insights for the damage function within models that seek to assess the potential economic effects of future climate change jel c51 d72 o13 q51 q54

undominated wage rates in a unionized overlapping generations economy abstract an overlapping generations macro model where consumers are divided into workers and capitalists is analysed in each period the wage rate is negotiated between an employers union and a trade union other prices adjust competitively the solution concept used is cooperative the wage rate chosen by unions should be undominated i e there must not exist another wage rate leading to higher utilities for both workers and capitalists the resulting one period equilibria relative pareto optima rpo and also stationary equilibria stationary relative pareto optima srpo are analysed results are that full employment s rpo always exist and in some economies unemployment s rpo also exist sufficient conditions for the latter to be the case are stated and the existence of economies fulfilling these conditions is demonstrated

temperature changes household consumption and internal migration evidence from tanzania large rural urban wage gaps observed in many developing countries are suggestive of barriers to migration that keep potential migrants in rural areas using long panel data spanning nearly two decades i study the extent to which migration rates are constrained by liquidity constraints in rural tanzania the analysis begins by quantifying the impact of weather variation on household welfare the results show how household consumption co moves with temperature rendering households vulnerable to local weather events these temperature induced income shocks are then found to inhibit long term migration among men thus preventing them from tapping into the opportunities brought about by geographical mobility

oligarchic versus democratic societies this paper develops a model to analyze economic performance under different political regimes an oligarchic society where political power is in the hands of major producers protects their property rights but also tends to erect significant entry barriers against new entrepreneurs democracy where political power is more widely diffused imposes redistributive taxes on producers but tends to avoid entry barriers when taxes in democracy are high and the distortions caused by entry barriers are low an oligarchic society achieves greater efficiency because comparative advantage in entrepreneurship shifts away from the incumbents the inefficiency created by entry barriers in oligarchy deteriorates over time the typical pattern is one of rise and decline of oligarchic societies an oligarchic society may first become richer but later fall behind a similar democratic society i also discuss how democracies may be better able to take advantage of new technologies how within elite conflict in oligarchies might cause a transition to democracy and how the unequal distribution of income may keep inefficient oligarchic institutions in place jel p16 o10

handbook of game theory with economic applications volume 3 this is the second of three volumes surveying the state of the art in game theory and its applications to many and varied fields in particular to economics the chapters in the present volume are contributed by outstanding authorities and provide comprehensive coverage and precise statements of the main results in each area the applications include empirical evidence the following topics are covered communication and correlated equilibria coalitional games and coalition structures utility and subjective probability common knowledge bargaining zero sum games differential games and applications of game theory to signalling moral hazard search evolutionary biology international relations voting procedures social choice public economics politics and cost allocation this handbook will be of interest to scholars in economics political science psychology mathematics and biology handbook of game theory with economic applications vol i

cooperation between multiple news vendors with transshipments we study a situation with n retailers each of them facing a news vendor problem i e selling to customers over a finite period of time product with a short life cycle such as fashion groups of retailers might improve their expected joint profit by coordinating their orders followed by transshipments after demand realization is known we analyze these situations by defining a cooperative game called a general news vendor game for such a situation with n retailers we concentrate on whether it makes sense to cooperate by studying properties of general news vendor games our main result states that general news vendor games have non empty cores

growth and risk methodology and micro evidence how exposure to risk affects economic growth is a key issue in development this article quantifies both the ex ante and ex post effects of risk using long running panel data for rural households in zimbabwe it proposes a simulation based econometric methodology to estimate the structural form of a micro model of household investment decisions under risk the key finding is that risk substantially reduces growth in this particular setting the mean capital stock in the sample is in expectation 46 percent lower than in the absence of risk about two thirds of the impact of risk is due to the ex ante effect that is the behavioral response to risk which is usually not taken into account in policy design these results suggest that policy interventions that reduce exposure to shocks or that help households manage risk could be much more effective than is commonly thought

resilience thresholds to temperature anomalies a long run test for rural tanzania abstract the existence of thresholds constitutes an important frontier topic for resilience analysis and measurement this paper contributes to the literature by identifying critical resilience thresholds below which rural tanzanian households are unable to absorb the negative effects of temperature anomalies on long run growth to make up for the lack of long micro panels we generate a synthetic panel covering the time span 2000 2013 we show that 25 47 of households in our sample lie below the estimated thresholds the evidence of resilience driven regime shifts and non linear dynamics has important implications for adaptation to climate change in developing countries and is of significant interest for policy interventions

the time series properties of aggregate consumption implications for the costs of fluctuations the properties of the stochastic process followed by aggregate consumption affect the estimates of the costs of fluctuations this paper pursues two approaches to modeling consumption dynamics and measuring how much society dislikes fluctuations one statistical and one economic the statistical approach estimates the properties of consumption and calculates the costs of having consumption fluctuating around its mean growth the paper finds that persistence is a crucial determinant of the costs and that the high persistence in the data severely distorts conventional measures it shows how to compute valid estimates and confidence intervals the economic approach uses a calibrated model of optimal consumption and measures the costs of eliminating income shocks this uncovers a further cost of uncertainty through its impact on precautionary savings and investment the two approaches lead to costs of fluctuations that are higher than the common wisdom between 0 5 and 5 of per capita consumption jel e32 e21 e60

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

adverse selection and entrepreneurship in a model of development this paper presents a theory in which talented entrepreneurs are identified as the key agents driving the process of development and modernisation entrepreneurial skills are private information which prevents full risk sharing development into a modern industrial economy might fail to take place since potentially talented entrepreneurs may refrain from taking on the entrepreneurial risks as a way to avoid income shocks an interesting feature of the model is the fact that the informational asymmetries are endogenous to the process of development as they are related to the heterogeneity in entrepreneurial skills required in the manufacturing activities

voluntary and efficient allocations are walrasian let f be a private ownership economy call an allocation w voluntary for a price vector p if no agent can benefit by trading less at p we prove that under differentiability and interiority if w is voluntary and pareto efficient it is a competitive equilibrium for w perhaps surprisingly production economies where some agents receive profit income require a stronger voluntariness condition than the one sufficient for exchange economies the stronger condition singles out a commodity as a medium of exchange

there may be unemployment when the labour market is competitive and the output market is not is unemployment always caused by union power or more generally downwards rigidity of wages the influential article by hart i 982 says yes there cannot be unemployment unless labour unions prevent wages from falling the more recent papers by d aspremont et al i 984 i989 a b and by dehez i 985 say no unemployment may occur when the labour market is perfectly competitive and the output market is not all this work assumes a fixed labour supply but the more recent models significantly depart from hart s formulation in other respects 2 one may ask which answer is the robust one this paper shows that hart s answer is based on a facilitating assumption on marginal revenue i replace it by a more realistic hypothesis and replicate hart s existence and comparative statics results except that now unemployment may occur when the labour market is perfectly competitive and the output market is not more precisely there can be unemployment at any nonnegative wage and perfect competition in the labour market may generate zero wages and unemployment labour becoming a free good in excess supply a useful costless resource is then wasted away and thus a gross form of inefficiency occurs in hart i982 on the contrary perfect competition in the labour market necessarily yields full employment and pareto efficiency labour does not often become a free good in excess supply in modern industrial economies but this possibility may help explain why labour markets have become noncompetitive wages are positive at an overall walrasian equilibrium but imagine that the output markets become oligopolistic and as a result the perfectly competitive wage drops to zero workers are now severely exploited in the sense of joan robinson i933 ch 25 and pigou i920 because the real wage is lower than the physical marginal product of labour unionisation can then be seen as providing countervailing power in

how responsive is body weight to transitory income changes evidence from rural tanzania we use time series of rainfall to estimate the response of body weight to transitory changes in household income in rural tanzania we find that the response of body weight to income changes is positive on average but that the impact is highest for female children and lower for adults for female children a ten percent increase in household income implies an increase in body weight by about 0 4 kg in contrast the body weight of adolescents and young adults is virtually invariant to income changes

on the efficiency of fixed price equilibrium abstract we study the efficiency properties of k equilibrium a species of fixed price equilibrium in particular we examine the interrelations among k equilibria and two of its properties order and voluntariness we also consider several alternative concepts of optimality

a model of imperfect competition with keynesian features the recent literature on the reappraisal of keynes has viewed keynesian equilibria as arising when prices are fixed and effective demands and supplies are equilibrated through the adjustment of quantities one problem with this approach is that it lacks a theory of price determination in particular of why prices are fixed in the present paper we show that a number of keynesian features arise in a model in which prices are fully flexible but where agents have some monopoly power one advantage of this approach is that it provides a theory of the determination of both prices and quantities

fixprice analysis in productive economies abstract the paper compares the definitions of fixprice equilibrium for productive convex economies due to dreze benassy and malinvaud younes it turns out that dreze s resp malinvaud younes notion is the strictest resp least strict one the three notions are however equivalent under smoothness and absence of intermediate goods they are in particular equivalent for the familiar fixprice model with three goods money labor and output studied among others by barro grossman benassy and malinvaud

vulnerability seasonality and poverty in ethiopia most studies examining the dynamics of welfare have found large fluctuations in consumption over relatively short periods suggesting substantial short run movements in and out of poverty the consequence is that cross section poverty research may not be able to identify the poor in this study we explore this short run variability further we use a data set on a panel of 1450 households in different communities in rural ethiopia surveyed thrice over 18 months on average year to year poverty is very similar however we find high variability in consumption and poverty over the seasons and year by year econometric analysis suggests that consumption is affected by idiosyncratic and common shocks including rainfall and household specific crop failure while households respond to seasonal incentives related to changing labour demand and prices the results imply that a larger number of households are vulnerable to shocks than implied by the standard poverty statistics while some of the non poor in the

monopolistic equilibrium and involuntary unemployment abstract this note provides a simple example of an economy in which involuntary unemployment may be the consequence of monopolistic behavior on the product market

geographic poverty traps a micro model of consumption growth in rural china how important are neighbourhood endowments of physical and human capital in explaining diverging fortunes over time for otherwise identical households in a developing rural economy to answer this question we develop an estimable micro model of consumption growth allowing for constraints on factor mobility and externalities whereby geographic capital can influence the productivity of a household s own capital our statistical test has considerable power in detecting geographic effects given that we control for latent heterogeneity in measured consumption growth rates at the micro level we find robust evidence of geographic poverty traps in farm household panel data from post reform rural china our results strengthen the equity and efficiency case for public investment in lagging poor areas in this setting copyright 2002 john wiley sons ltd

temperature shocks short term growth and poverty thresholds evidence from rural tanzania using the lsms isa tanzania national panel survey by the world bank we study the relationship between rural household consumption growth and temperature shocks over the period 2008 2013 temperature shocks have a negative and significant impact on household growth only if their initial consumption lies below a critical threshold as such temperature shocks slow income convergence among households agricultural yields and labour productivity are the main transmission channels these findings support the schelling conjecture economic development would allow poor farming households to cope with climate change and closing the yield gap and modernizing agriculture is crucial for adaptation to the negative impacts of global warming

on modeling and interpreting the economics of catastrophic climate change with climate change as prototype example this paper analyzes the implications of structural uncertainty for the economics of low probability high impact catastrophes even when updated by bayesian learning uncertain structural parameters induce a critical tail fattening of posterior predictive distributions such fattened tails have strong im plications for situations like climate change where a catastrophe is theoretically possible because prior knowledge cannot place sufficiently narrow bounds on overall damages this paper shows that the economic consequences of fat tailed structural uncertainty along with unsureness about high temperature damages can readily outweigh the effects of discounting in climate change policy analysis

consumption risk technology adoption and poverty traps evidence from ethiopia much has been written on the determinants of input and technology adoption in agriculture with issues such as input availability knowledge and education risk preferences profitability and credit constraints receiving much attention this paper focuses on a factor that has been less well documented the differential ability of households to take on risky production technologies for fear of the welfare consequences if shocks result in poor harvests building on an explicit model this is explored in panel data for ethiopia historical rainfall distributions are used to identify the counterfactual consumption risk controlling for unobserved household and time varying village characteristics it emerges that not just ex ante credit constraints but also the possibly low consumption outcomes when harvests fail discourage the application of fertilizer the lack of insurance causes inefficiency in production choices