aggregate scale economies market integration and optimal welfare state policy abstract using a two sector two country model with aggregate scale economies and unionisation we show that optimal welfare state policy entails positive levels of unemployment benefits under free trade and capital mobility in this setting economic integration does not reduce the revenue raising capacity of governments and thus does not lead to a race to the bottom in social standards instead trade and capital flows interact with welfare state policies in increasing welfare even when each government acts independently non cooperatively in determining its optimal welfare payment cooperation is shown to improve upon non cooperative outcomes by raising both the generosity of the welfare state and aggregate welfare

macroeconomic implications of production bunching factor demand linkages abstract existing empirical evidence suggests that output is more variable than consumption so that production smoothing is not apparently present in this paper we investigate some macroeconomic implications of the proposition that the empirical evidence reflects the presence of some firms in the economy that produce with nonconvex technologies overall when activities are sufficiently complementary and inventory holding is sufficiently costly nonconvexities at the firm level can generate a pattern of output and sales such that the variance of output exceeds that of sales at an aggregate level in this way nonconvexities at the individual firm level may have macroeconomic consequences

imperfect competition and the keynesian cross abstract this paper presents a simple general equilibrium model in which the only non walrasian feature is imperfect competition in the goods market the model is shown to exhibit various keynesian characteristics in particular as competition in the goods market becomes less perfect the fiscal policy multipliers approach the values implied by the textbook keynesian cross

no price like home global house prices 1870 2012 how have house prices evolved in the long run this paper presents annual house price indices for 14 advanced economies since 1870 based on extensive data collection we are able to show for the first time that house prices in most industrial economies stayed constant in real terms from the 19th to the mid 20th century but rose sharply in recent decades land prices not construction costs hold the key to understanding the trajectory of house prices in the long run residential land prices have surged in the second half of the 20th century but did not increase meaningfully before we argue that before world war ii dramatic reductions in transport costs expanded the supply of land and suppressed land prices since the mid 20th century comparably large land augmenting reductions in transport costs no longer occurred increased regulations on land use further inhibited the utilization of additional land while rising expenditure shares for housing services increased demand

globalization labor markets and policy backlash in the past the late nineteenth and twentieth centuries have many things in common both periods recorded fast growth convergence and labor market integration between oecd members both periods witnessed intense debate about who gained and who lost from globalization furthermore the earlier period saw a retreat from global liberalism long before the interwar deglobalization disaster did globalization of that time plant seeds of its own destruction are there lessons for the present

imperfect competition expectations and the multiple effects of monetary growth in a monetary overlapping generations model with an imperfectly competitive labor market in which output is below its full employment level it is shown that different backward looking rules for forecasting inflation lead to different steady states despite yielding no forecast errors in the steady state and in many cases none in the short or medium run either higher monetary growth raises output in some steady states in others has no effect and in others lowers it this contrasts with ad hoc or competitive macromodels where the absence of forecast errors in the steady state usually defines it and its properties uniquely copyright 1992 by royal economic society

trade and factor movements with three factors and two goods abstract with three factors and two goods there are two extreme and one middle factor regardless of technical complementaries in the individual production functions the extreme factors must be enemies and the middle factor the other factor s friend with constant product prices

on the existence of conjectural equilibria with a priori chosen rationing patterns hahn s model of conjectural equilibrium hahn 1978 is investigated a proof of existence of non walrasian conjectural equilibrium for a regular economy is given the method used enables one to choose a priori and within a large class the rationing pattern to emerge in equilibrium for instance an equilibrium with a rationing pattern of general supply rationing is thereby shown to exist also it is possible to select a priori one commodity money which is never rationed these results are valid for the fix price model as well the method of our proof is basically a generalization of gale s method gale 1978

a classical model of the class struggle a game theoretic approach the class struggle is formalized as a differential game in a strictly supply side model an approach that synthesizes the models of lancaster and goodwin four different steady state equilibria are derived each corresponding to different assumptions about the degree to which each class is organized to promote its own interests in particular the goodwin growth cycle is shown to emerge from a world characterized by unorganized capitalists and workers in which individuals ignore the effects of their own actions on economywide variables more relevant for discussion of modern capitalism are the hierarchical equilibria especially the codetermination equilibrium in which the existence of a full employment equilibrium turns out to be problematic finally comparative statics results suggest that the incentives for technological change differ widely among the four regimes

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

unions oligopoly and the natural range of employment a simple two sector general equilibrium macromodel is presented wi th oligopolistic price determination in the product market and a unionized labor market in the first stage unions set the nominal wage and in the second stage firms choose outputs given wages by altering the balance of fiscal policy between the two sectors the government can achieve a continuum of aggregate employment levels the natural range of employment a unique natural rate will occur only i f one requires fiscal policy to be the same in both sectors this indicates that the natural rate property of some single or representative sect or macromodels is a special case

economic growth and conflict over the distribution of income abstract a thorough analysis of economic growth inflation and fluctuations resulting from the class struggle is presented the paper begins with the formulation of an extended predator prey model and pays attention to population growth technical progress differential saving consumption out of wealth trade union activity inflation labour hoarding affluence and the inherent contradictions of capitalism the paper proceeds with a neo classical reformulation to allow for smooth substitution possibilities in production and for time taken to recruit and fire labour an alternative extension of the model based on maximising the reduction in unit costs subject to kaldor s technical progress function is also provided

strategic complementarity in business formation aggregate fluctuations and sunspot equilibria the extent to which changes in beliefs can be important factors in initiating economic fluctuations has been a prominent area of investigation for macroeconomists the notion that beliefs about the future influence current decisions is a property of almost all dynamic economic systems the more challenging task is identifying economic environments in which changes in beliefs alone influence current choices in such a way that the variations in beliefs are self fulfilling because the resulting fluctuations arise in the absence of variations in fundamental variables such as preferences and technology they are often termed sunspot equilibria apart from suggesting that instability of expectations may be a distinct source of cyclical volatility sunspot equilibria may also explain why apparently small disturbances in fundamentals lead to large change in macroeconomic aggregates in this study we demonstrate the possibility of sunspot equilibria in an overlappinggenerations economy characterized by a plausible form of strategic complementarity as more agents enter as producers in any particular sector of the economy they create an incentive for agents to enter as producers into other sectors as well 2 the basis for this

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

sources of convergence in the late nineteenth century abstract this paper investigates convergence for a group of seven countries during the period 1870 1914 a standard empirical growth model which includes physical and human capital accumulation proves unsatisfactory in this setting an alternative neoclassical open economy factor accumulation model is proposed which admits capital and labor migration and may be extended to include a moving frontier the model explains the observed convergence pattern in the sample and suggests that factor accumulation patterns were the prime sources of labor productivity convergence from 1870 to 1914

factor price convergence in the late nineteenth century the authors examine a dramatic historical episode of factor price convergence in the late nineteenth century their focus is convergence between old world and new and the analysis centers on land and labor wage rental ratios boomed in the old world and collapsed in the new moving the resource rich labor scarce new world closer to the resource scarce labor abundant old world the authors use econometrics and simulations to identify proconvergence forces which include commodity price convergence factor accumulation and factor saving biases the results confirm that open economy characteristics and international market integration are important sources of convergence copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

government policy real wage resistance and the resolution of conflict a theory of bargaining with k players is proposed to reconcile the multitude of conflicting interests in an econometric model this nash strategy corresponds to a non zero sum differential dynamic game and is established either by rational anticipation of finite conflict or pre play round table discussion the theory is illustrated with an analysis of conflict between government trade unions and entrepreneurs all results are calculated from a large scale multisectoral dynamic model of the u k economy developed by the cambridge growth project

das human kapital a theory of the demise of the class structure this paper suggests that the demise of the capitalists workers class structure was a socio economic transformation orchestrated by the capitalists in reaction to the increasing importance of human capital in sustaining their profit rates physical capital accumulation in the process of industrialization enhanced the importance of human capital in production and generated incentives for capitalists to support the provision of public education for the masses triggering the demise of the existing class structure the implications of the theory are consistent with the voting patterns on england s education reform of 1902

stabilisation policy targets and unemployment in imperfectly competitive economies this paper argues that the rate of equilibrium unemployment depends on the objectives of the central bank in a model where the central bank uses monetary policy to stabilise the economy we show that unemployment and inflation will be lower with an inflation target than with targets for output money or nominal gdp the intuition for this is that the elasticities of demand in both the product and the labour markets are greater when there is an inflation target we show that this leads to a lower mark up of price over marginal cost and makes wages more sensitive to unemployment

contracts and externalities how things fall apart a single principal interacts with several agents offering them contracts the crucial assumption of this paper is that the outside option payoffs of the agents depend positively on how many uncontracted or free agents there are we study how such a principal unwelcome though he may be approaches the problem of contract provision to agents when coordination failure among the latter group is explicitly ruled out two variants are considered when the principal cannot re approach agents there is a unique equilibrium in which contract provision is split up into two phases in phase 1 simultaneousoffers at good though varying terms are made to a number of agents in phase 2 offers must be made sequentially and their values are discontinuously lower they are close to the very lowest of all the outside options when the principal can repeatedly approach the same agent there is a multiplicity of equilibria in some of these the agents have the power to force delay they can hold off the principal s overtures temporarily but they must succumb in finite time in both models despite beingable to coordinate their actions agents cannot resist an invasion by the principal and hold to their best payoff it is in this sense that things eventually fall apart

numerical simulation on property tax reform evidence from china this article analyses the property tax reform in china in a computable general equilibrium model that recognizes the interaction between and among housing markets in different provinces and macroec

tariffs and growth in the late 19th century the paper estimates the correlation between tariffs and economic growth in the late 19th century in the context of three types of growth equation unconditional convergence equations conditional convergence equations and factor accumulation models it does so for a panel of ten countries between 1875 and 1914 tariffs were positively correlated with growth in these countries during this period economic theory is ambiguous as regards the relationship between trade policy and growth the growth literature of the past decade has produced an impressive array of models in which protection can either increase or reduce long run growth rates grossman and helpman 1991 rivera batiz and romer 1991 stokey 1991 young 1991 such theoretical ambiguity invites empirical research while new growth theory is ambiguous on the subject the new empirical growth literature has produced a consensus that free trade is positively associated with growth based on evidence from the late 20th century but see rodrlguez and rodrik 1999 for a sceptical review of the literature the clear

institutions property taxation and local government finance in china china s rapid urbanisation has prompted its government to explore new sustainable sources of public revenue to finance the continued demand for urban infrastructure and services property tax advocates have sought to take advantage of the real estate booms that have occurred since economic liberalisation by actively campaigning for a real property levy as an appropriate policy choice against this background this study evaluates the prospect of implementing market value based property tax reforms in mainland china based on the new institutional economics perspective it posits property tax as an institutional arrangement which requires complementary mechanisms in land registration property appraisal tax administration social security and dispute resolution property tax reforms would not only necessitate technical changes but would also have extensive social political and legal repercussions for chinese society

market power and inflation market power exercised by firms has become central to macroeconomics recent theoretical work highlights the importance of the relation between market power and inflation we examine this relation for individual firms in eleven u s industries our econometric framework exploits restrictions from dynamic theory and information from financial markets to generate quantitative evidence on the responsiveness of market power to inflation we find that inflation usually has a positive effect on market power this relation is heterogeneous across the eleven industries and statistically significant positive relations are concentrated in industries with little market power

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

unemployment and the efficiency wage hypothesis there has been much recent discussion of the reasons why prices in certain markets and in particular in labour markets may not adjust to eliminate excess supply the absence of speedy adjustment of prices is an essential feature of the recent models of disequilibrium macroeconomics but for the most part no explanation for this absence is provided from within those models one explanation that has been around in the literature for some time and has been receiving increasing attention recently is the efficiency wage hypothesis initially applied to developing economies see leibenstein i957 it has more recently been adapted to developed economies by weiss i 980 and used in the context of a keynesian macroeconomic model by hart i 980 similar concepts have been applied to the credit market by stiglitz and weiss i98i the purpose of the present paper is to explore further the conditions under which the notion of an efficiency wage is applicable and can provide an explanation of involuntary unemployment the essential feature of the efficiency wage hypothesis is that the productivity of a firm s employees increases as their wage is increased at least over an economically relevant part of its range if the wage paid by the firm is denoted by w the number of employees by l and the productivity of each employee by p w where p w o then the effective labour force of the firm e can be represented by

money supply variability in a macro model of monopolistic competition the effects of changes in money supply variability are examined for a macro model of monopolistic competition increases in money supply variability raise demand uncertainty causing individual firms to produce more for inventory in addition expected profits decrease inducing a number of firms to leave the economy aggregate income then falls in spite of an increase in firm level production the result on aggregate income is standard but the results on inventories and the number of firms in the economy distinguish this monopolistic macro model empirically from conventional macro models when changes in money supply variability occur

measuring protection a cautionary tale abstract this paper comments on a theoretically based index of protection recently developed by anderson and neary the index must be calculated within the context of a specific cge model anderson and neary propose a generic model and have found that the index is robust to changes in the elasticities embedded within that model is the index also robust to changes in the specification of the model the paper identifies one historical instance where the index is extremely sensitive to the specification of the model s demand side there are important methodological lessons to be learnt from this example

equilibrium selection in imperfectly competitive economies with multiple equilibria this paper investigates the selection of an equilibrium in an economy with multiple pareto ranked nash equilibria a history dependent selection criterion is proposed which induces correlated behavior in equilibrium even though agents are playing one shot games and disturbances are not correlated over time the model economy may experience prolonged periods in which a low productivity technology is in use and then as a consequence of a large real disturbance may switch to an alternative equilibrium in which a high productivity technology is utilized thus the model qualitatively matches observations of serially correlated movements in output and employment and generates procyclical productivity though there are no exogenous technology shocks copyright 1994 by royal economic society

growth cycles with induced technical change this paper concerns itself with two related topics the relative shares of workers and capitalists in the national income and the labour augmenting bias of technical change both have been dealt with in contrasting fashion in two seminal papers on distribution theory kennedy i964 attempts to explain the then observed constancy of relative shares with the help of the now famous invention possibility frontier however the wage and profit rates are exogeneous to his model goodwin i967 on the other hand presents a model of cycles in growth rates in which the share of labour the wage rate and the profit rate are endogenously determined however unlike the kennedy analysis technical change is assumed to be constant and exogeneously given given that these pioneering works have addressed themselves to important questions it seems a worthwhile task to build a model in which the shares of labour and capital the wage rate the profit rate and technical change are all endogenously determined the perspective we have chosen here introduces the key element of kennedy s perception induced technical change into the goodwin scheme and the consequences of so doing are traced out in the following terse account there are two classes in the economy workers and capitalists only one good q t is produced and it can be either consumed or invested capital stock k t is homogeneous and for simplicity also assumed to be non depreciating the capital output ratio at time t is denoted by o t labour i t is also homogeneous and its productivity at time t a t q t l t improves at the rate ac t labour s share in the national income denoted by u t is

multiplicity of cournot equilibria and involuntary unemployment abstract in an overlapping generations model with cournot competition on the goods market it is shown that a continuum of stationary states and perfect foresight trajectories exists with unemployment at arbitrary low wages decisive for this is the influence that different forecast functions have on the objective demand curve even though they are consistent with perfect foresight with an example it is shown that simple adaptive and constant memory forecast rules generate such unemployment equilibria the corresponding temporary equilibrium dynamics may display stable unemployment and unstable full employment equilibria journal of economic literatureclassification numbers d43 d51 e24

the microfoundations project in general equilibrium theory the author 1 argues that the long lived microfoundations project based on general equilibrium models has come to an end and 2 shows that non walrasian models intended to provide microfoundations for macroeconomics are inadequate the arguments are derived from the sonnenschein mantel debreu smd demonstration of the arbitrariness of aggregate excess demands in general equilibrium models of the walrasian arrow debreu mckenzie type the issues raised have significance for the proper method of modeling macroeconomic phenomena for instance the smd results have led a growing number of general equilibrium theorists to make assumptions concerning macroeconomic structure in order to analyze other regularities at the macro level these points validate the position that systematic macroeconomic phenomena are intrinsically macroeconomic copyright 1994 by oxford university press

microeconomic uncertainty and macroeconomic indeterminacy we propose a stylized intertemporal macroeconomic model wherein the combination of decentralized trading and microeconomic uncertainty taking the form of privately observed and uninsured idiosyncratic shocks creates an information problem between agents and generates indeterminacy of the macroeconomic equilibrium for a given value of the economic fundamentals the economy admits a continuum of equilibria that can be indexed by the sales expectations of firms at the time of investment the walrasian equilibrium is one of these possible equilibria but it is reached only if firms are optimistic enough with a weaker degree of optimism equilibrium output employment and real wages will be lower than in the walrasian equilibrium moreover the range of possible equilibria will depend positively on the wage elasticity of the labour supply and on the magnitude of the information problem between buyers and sellers in our case the variance of the idiosyncratic shocks stochastic simulations performed on a calibrated version of the model show that pure demand expectation shocks may generate business cycle statistics that are not inconsistent with the observed ones 2006 elsevier b v all rights reserved

imperfect competition and the suboptimality of rational expectations abstract this paper investigates whether nonrational expectations can lead to outcomes which other things being equal pareto dominate rational expectations outcomes in order to carry out this investigation we construct an intertemporal micro based macroeconomic model with the two following strong points a it accommodates both rational and non rational expectations b both prices and quantities are determined by optimizing agents in particular prices are determined by explicit price setters using objective demand curves in this model the first theorem of welfare holds so that the walrasian equilibrium with rational expectations cannot be pareto dominated this conclusion is extremely fragile however and we show that as soon as some degree of imperfect competition is present rational expectations are suboptimal in the sense that they are dominated by irrational expectations

endogenous imperfectly competitive business cycles abstract we investigate how imperfect competition affects the occurrence and the properties of endogenous rational expectations business cycles in an overlapping generations model with constant returns to scale in production the model has explicit product and labor markets all characterized by monopolistic competition an implicit assumption of barriers to entry justifies that the number of firms is fixed even when positive profits occur it turns out that both market power of firms on the product markets and market power of unions on the labor markets make the occurrence of cycles more likely in particular imperfect competition on the product markets and the positive profits associated with it may have the effect that there is a cycle even if the labor supply curve is increasing in the real wage rate for competitive cycles is required not only a decreasing labor supply curve but a wage elasticity below 1 2 at stationary equilibrium market power on the labor markets may have the effect that imperfectly competitive cycles are in accordance with certain empirical regularities some well known some reported in the paper concerning fluctuations in output and involuntary unemployment since involuntary unemployment does not occur under perfect competition such regularities are incompatible with competitive cycles

optimal fiscal policy in open economies with labour market distortions abstract we set up a general equilibrium model with unemployment owing to distortions in the labour market it is shown that a public expansion financed by a distortionary income tax may give rise to a decrease in unemployment even if public goods are pure waste such an expansion may give rise to an increase in welfare if it is associated with a decrease in unemployment since part of the gain from a fiscal expansion is achieved at the expense of welfare in other countries non cooperative policies tend to be too expansionary

why people pay taxes the case of the development levy in tanzania abstract this paper examines factors determining tax compliance behavior in local authorities in tanzania the case study is the poll tax locally named development levy the study finds support for the hypothesis that tax compliance is positively related to factors such as ability to pay the perceived probability of being prosecuted and the number of tax evaders known personally by the respondent oppressive tax enforcement harassment of taxpayers and discontent with public service delivery seem to increase tax resistance and may explain widespread tax evasion

a century of missing trade in contemporary data the measured factor content of trade is far smaller than its predicted magnitude in the pure heckscher ohlin vanek framework the so called missing trade mystery authors wonder if this problem has been there from the beginning that is authors ask if the heckscher ohlin theory was so much at odds with reality at its time of conception authors apply contemporary tests to historical data focusing on the major trading zone that inspired the factor abundance theory the old and new worlds of the pre 1914 greater atlantic economy this places autor s analysis in a very different context than contemporary studies an era with lower trade barriers higher transport costs a more skewed global distribution of the relevant factors especially land and comparably large productivity divergence these conditions might seem more favorable to the theory but the results are still very poor

comparative advantage in uk manufacturing trade 1910 1935 this paper uses a maintained hypothesis of comparative advantage based on relative factor endowments to investigate uk manufacturing trade prior to world war ii the results from several independent tests indicate that britain exported goods intensive in the use of unskilled labour and had a comparative disadvantage in goods intensive in the use of human capital right up to the mid 1930s this is consistent with the views of contemporaries but somewhat at odds with recent optimistic assessments of structural change in pre war britain this abstract was borrowed from another version of this item

free trade and factor price polarization abstract factor price equalization between trading partners is perhaps the best known implication of the heckscher ohlin samuelson model of production and trade it has long been known that with more primary factors than goods this result is not necessary recent studies have investigated effects of changing prices on factor payments in the three factor two good trade model this short note emphasizes that when such an economy moves from autarky to free trade payment to a relatively cheap factor may fall polarizing factor prices conditions favoring this outcome are examined

a simple macroeconomic model with monopolistic firms this paper presents a simple macroeconomic model in which firms outputs are imperfect substitutes and explores the macroeconomic implications of monopolistic competition the model is classical in some respects but keynesian in others multiple or unstable equilibria are not unlikely permanent price controls will in principle be desirable since they allow a permanent and efficient increase in aggregate output small costs of price adjustment may induce large deviations of output from the natural rate fiscal policy will generally affect aggregate output but the sign and magnitude of the government expenditure multiplier cannot be determined a priori

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

market potential and the rise of us productivity leadership abstract today s globalization driven by lower barriers to trade has increased market potential for many nations and led to gains in gdp per capita we test whether this was true in the first wave of globalization by constructing market potential measures for a sample of 27 countries in 1900 and 1910 based on a general equilibrium model of production and trade cross sectional estimates suggest that market potential was an economically significant determinant of gdp per capita at this time to assess welfare effects we then study the general equilibrium impact of raising market potential by eliminating international borders in a quantitative counterfactual calculation for 1900 there are significant gains in real income per capita for all nations we use us per capita output as a benchmark since it attained leadership in this variable from the late 19th century and the literature frequently attributes this to its relatively large domestic market a market unconstrained by trade costs associated with international borders because market potential was already near that of the us the largest european countries do not entirely close their per capita income gaps with the us after removing all border barriers to trade within europe or even globally on the other hand many small european countries could have done so

why real wages do not fall when there is unemployment abstract erroneous anticipations of fiscal policy results in involuntary unemployment if mutually agreeable unemployment may be eradicated by recontracting the real wage and employment level however if labor demand is inelastic unit elastic or within a bounded elastic range unemployment persists

imperfect competition and crowding out abstract this paper applies the central feature of imperfect competition in the goods market to examine the validity of the standard belief in international macroeconomics namely that policy effects in a small open economy are less effective than in a closed economy it is shown that the profit margin in imperfect competition and marginal propensity to leisure are the key factors in determining whether this standard belief is valid

imperfect competition and fixprice equilibria when goods are gross substitutes it is possible in principle that the price quantity pair generated by a model of imperfect competition may satisfy the conditions voluntary trading and absence of frictions for a fixprice equilibrium it is shown that imperfect competitors will typically satisfy voluntary trading provided that appropriate gross substitute assumptions are satisfied hence such assumptions are seen to ensure that the solutions of some well known imperfectly competitive general equilibrium models are indeed fixprice equilibria thus bringing together two important traditions in theoretical microeconomics copyright 1991 by the editors of the scandinavian journal of economics

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

global trade and the maritime transport revolution abstract what is the role of transport improvements in globalization we argue that the nineteenth century is the ideal testing ground maritime freight rates fell on average by 50 while global trade increased 400 from 1870 to 1913 we estimate the first indices of bilateral freight rates and directly incorporate these into a standard gravity model we also take the endogeneity of bilateral trade and freight rates seriously and propose an instrumental variables approach the results are striking we find no evidence that the maritime transport revolution was the primary driver of the late nineteenth century global trade boom

the persistence of power despite the changing meaning of homeownership an age period cohort analysis of urban housing tenure in china 1989 2011 using nine successive waves of the china health and nutrition survey chns data set this study employs hierarchical age period cohort logistic models hapc to analyse temporal patterns of urban homeownership from 1989 to 2011 with the changing meaning of homeownership due to housing reforms the strong period increases in homeownership track policy changes and the most dramatic increase occurs mainly in the era of housing privatisation rather than housing commodification the temporal analyses also offer insights into housing stratification from redistribution to markets the positive effect of education on homeownership is explained by period increases in homeownership whereas working in state sectors has persistently attached to preferred housing tenure choice before and after the housing reforms moreover the significant cohort effect lends support to strengthened temporal inequalities in the reform era these findings not only provide a dynamic understanding of housing stratification in post so

globalisation history and development a tale of two centuries this paper situates globalisation in historical perspective to analyse its implications for development it sketches a picture of globalisation during the late nineteenth and twentieth centuries a comparison of these two epochs reveals striking parallels unexpected similarities and important differences it shows that globalisation did not lead to rapid growth and economic convergence in the world either then or now indeed growth slowed down and income levels diverged while the gap between the industrialised and developing countries widened in both epochs the story of globalisation it turns out does not conform to the fairy tale about convergence and development

building talented worker housing in shenzhen china to sustain place competitiveness in china economic reforms over the last three decades have transformed its urban governments so that economic growth takes priority over other policy goals the purpose of this paper is to explore how talented worker housing policies have emerged within one of china s first class cities namely shenzhen to address its affordability problems but also to enhance local economic competitiveness whilst shenzhen is heading in the direction of an international entrepreneurial city focusing in particular on high value added industry it needs to attract and retain professional skilled workers to sustain this growth trajectory drawing on the concept of urban entrepreneurialism the paper examines how talented worker housing policies and procedures have been initiated and implemented in shenzhen in relation to its economic development strategy and affordable housing programme the paper suggests that not only is policy delivery proving problematic but affordability problems remain insurmountable thus potentially limiting the effectiveness of this particular urban entrepreneurial strategy in supporting place competitiveness

unemployment and macroeconomics this paper discusses some issues in the theory of unemployment proposes a framework for the analysis of unemployment and applies the framework to the analysis of the rise in unemployment in britain after 1979 the framework is based on bilateral monopoly in the labor market and the explanation for the rise in unemployment in britain rests primarily with a demand side shock which caused the rise in 1980 81 and supply side persistence which has kept unemployment up since then copyright 1989 by the london school of economics and political science

the origins of american industrial success 1879 1940 the united states became the world s preeminent manufacturing nation at the turn of the twentieth century this study considers the bases for this success by examining the factor content of trade in manufactured goods surprisingly the most distinctive characteristic of u s manufacturing exports was intensity in nonreproducible natural resources furthermnore this relative intensity was increasing between 1880 and 1920 the study then asks whether resource abundance reflected geological endowment or greater exploitation of geological potential it was mainly the latter jel 042 recent thinking about american economic performance has been marked by alarm over the country s loss of its competitive edge most of this discussion is not rooted in an understanding of the historical origins of the economic leadership now thought to be in jeopardy modern economists tend to assume that the american advantage has been technological and

the elementary economics of social dilemmas a social dilemma is in essence a prisoners dilemma in a continuous strategy space i discuss a number of social dilemmas that have caught my attention offer an elementary diagrammatic synthesis of them and discuss some of the economic insights that the diagrams capture including incentives for pre commitment finally i model pre commitment via delegation and link results to the literature on the evolution of preferences l economie elementaire des dilemmes sociaux un dilemme social est essentiellement un dilemme du prisonnier dans un espace continu de strategie l auteur discute d un certain nombre de dilemmes sociaux qui ont retenu son attention il en propose une synthese graphique elementaire et discute certaines des suggestions economiques qui decoulent de ces diagrammes comme par exemple les incitations a se pre engager finalement l auteur construit un modele de pre engagement par delegation et relie ses resultats a la litterature sur l evolution des references

complementarity in a simple general equilibrium production model a simple three factor two good general equilibrium model allowing complementarity in production is examined conclusions of general equilibrium economics with two factors must be reinterpreted and qualified when complementarity is possible sign patterns of how changing factor endowments affect outputs and how changing prices affect factor payments are uncovered for a small open economy results should prove valuable to a wide range of economists interested in extending general equilibrium analysis to include complementary factors of production

has nafta increased labor market integration between the united states and mexico this article analyzes three criteria for labor market integration between mexico and the united states u s before and since the north american free trade agreement nafta the responsiveness of mexican wages to us wage shocks the speed at which relative wages return to a long run differential and changes in the rate of convergence of absolute wages tests for increased integration using these three criteria generate mixed results which are then explored by directly incorporating trade foreign direct investment fdi and migration the results suggest that trade and fdi did in fact positively contribute to integration but that the increase in border enforcement depressed mexican wages masking the positive benefits