generalized samuelson conditions and welfare theorems for nonsmooth economies abstract we give intuitive samuelson conditions for a very general class of economies smoothness and monotonicity are not required we provide necessary and sufficient conditions for all pareto efficient allocations including those on the boundary we prove that if all agents have a cheaper point the supporting prices fully decentralize the allocation we also show first and second welfare theorems as corollaries to the characterization of efficient allocations

optimal regulation under fixed rules for income distribution abstract it is by now well known that if arbitrary lump sum transfers are feasible then the optimal regulation of firms involves marginal cost pricing here we consider optimal regulation in an economy in which lump sum taxation is possible but the income distribution is in some sense fixed we show that under certain conditions production efficiency and marginal cost pricing are desirable in general however this need not be the case in an economy with increasing returns it is possible that the second best utility possibility frontier is strictly dominated by the pareto frontier and none of the marginal cost pricing equilibria lie on the second best frontier

an extension of the second welfare theorem to economies with nonconvexities and public goods in this paper we report a generalization of the results of foley and guesnerie on the second welfare theorem to economies with arbitrary nonconvex production sets the nature of marginal cost prices in such economies is clarified through the use of the clarke tangent cones

consumer demand and the life cycle allocation of household expenditures the purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle using micro data in doing so the authors are able to identify important effects of demographics labor market status and other household characteristics on the intertemporal allocation of expenditure they test the validity of the life cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income

how responsible is a region for its carbon emissions an empirical general equilibrium analysis targets for co2 reduction tend to be set in terms of the amount of pollution generated within the borders of a given region or nation that is under a production accounting principle however in recent years there has been increased public and policy interest in the notion of a carbon footprint or the amount of pollution generated globally to serve final consumption demand within a region or nation that is switching focus to a consumption accounting principle however this paper argues that a potential issue arising from the increasing focus on consumption based carbon footprint type measures is that while regional co2 generation embodied in export production is attributed outside of the region i e to the carbon footprints of other regions nations regional consumers are likely to benefit from such production moreover where there is a geographical and supply chain gap between producers and final consumers it may be difficult to identify precisely whose carbon footprint emissions should be allocated to

how does globalisation affect regional inequality within a developing country evidence from china developing countries are increasingly concerned about effects of globalisation on regional inequality this paper develops an empirical method for decomposing the contributions of two major driving forces of globalisation foreign trade and foreign direct investment fdi on regional inequality and applies it to china even after controlling for many other factors globalisation is still found to be an important factor contributing to the widening regional inequality the paper ends by investigating the role of factor market segmentations in aggravating the distributional effect of changing regional comparative advantages in the process of globalisation

existence of marginal cost pricing equilibria in economies with several nonconvex firms this paper considers a general equilibrium model of an economy where some firms may exhibit increasing returns to scale or more general types of nonconvexities the firms are instructed to follow the standard marginal cost pricing rule or to fulfill the first order necessary conditions for profit maximization a general existence theorem of equilibria is proved in the case of an arbitrary number of firms no assumption is made to imply the aggregate productive efficiency of equilibria a condition that must be excluded in the nonconvex case the failure of the competitive mechanism in the presence of increasing returns to scale has been recognized since marshall 1920 and the search for alternative mechanisms has resulted in the so called theory of marginal cost pricing this theory was developed by allais 1953 hotelling 1938 lange 1936 lerner 1936 pigou 1932 to remain in the thirties and forties but has a long history dating back to the discussion on public utility pricing by dupuit 1844 it states that an optimum of welfare corresponds to the sale of everything at marginal cost hotelling 1938 this statement of the second welfare theorem has since been formulated at a high level of generality starting with the work by guesnerie 1975 and more recently by bonnisseau and cornet 1988b cornet 1986 1988a b c khan and vohra 1987 1988 quinzii 1986 none of these papers however is concerned with the existence of equilibria this has been considered in the past ten years by beato 1979 1982 beato and mas colell 1985 brown and heal 1982 brown et al 1986 cornet 1982 dierker guesnerie and neuefeind 1985 mantel 1979 and more recently by bonnisseau bonnisseau cornet kamiya and vohra in the special issue of the journal of mathematical economics 1988 on general equilibrium theory and increasing returns the purpose of this paper is to provide a general existence theorem for an economy with an arbitrary number of convex and nonconvex producers which may exhibit increasing returns to scale or even more general types of nonconvexities in our model a the consumers maximize their preferences subject to their budget constraints b the convex producers maximize their profits while the nonconvex producers are instructed to follow the marginal pricing rule i e they

income inequality within and across counties in rural china 1988 and 1995 abstract using household data from samples covering 18 provinces in 1988 and 1995 income inequality within and between counties in rural china is assessed the approach enables us to aggregate average income and income inequality to the levels of provinces and the three regions comprising eastern central and western china most of income inequality in rural china in 1995 was found to be spatial and the uneven development of mean income across counties stood for most but not all of the rapid increase in income inequality mean income of the three regions diverged most forcefully

unequal economic development in china spatial disparities and regional policy reconsideration 1985 1995 zhao x b and tong s p 2000 unequal economic development in china spatial disparities and regional policy reconsideration 1985 1995 reg studies 34 549 561 almost two decades into the implementation of deng xiaoping s get rich first policy and coastal development strategy income inequality and an imbalance in regional development have emerged as two of the most disturbing factors affecting contemporary china this paper examines regional disparities in contemporary china and their changing trends and magnitude based on a time series analysis of data sets for income and production across china for the last 10 years this paper focuses on the examination of gini coefficients and coefficients of variation for two key economic indicators gdp per capita and household income per capita at four levels of geographical aggregation provincial regional urban and rural given that chinese policy makers appear to have been strongly influenced by the two western theories of regional development w

ioffe s normal cone and the foundations of welfare economics abstract we announce an example of an economy with an infinite dimensional commodity space for which the extension of the second fundamental theorem of welfare economics is valid if marginal rates of substitution are formalized in terms of either the clarke normal cone or the ioffe normal cone but in which the former is strictly contained in the latter this is in direct contradiction to the finite dimensional situation

rural urban disparity and sectoral labour allocation in china this study examines china s rural urban segmentation and its causes in the context of economic reforms household survey and aggregate data indicate a v shaped process in which rural urban consumption and income differentials decreased between 1978 and 1985 but then have continually increased to historically high levels this sectoral division is consistent with production function estimates based on provincial data that reveal higher labour productivity in urban state owned industries than in rural industries and agriculture to explain the v shaped change we argue that the precedent of successful rural reforms raised farmers relative earnings but the remaining obstacles to an efficient sectoral allocation of labour have prevented china from eliminating dualism recent financial policies consisting of urban price subsidies and increased investment credits have also had influential distribution effects that are biased against the rural sector

are there dynamic gains from a poor area development program poor area development programs in which the government transfers extra resources to unusually poor areas have been widely used to fight poverty there has been some research on such programs but little is known about their impact on household living standards over time the authors address the issue for a sizable poor area development program in rural china china s program had a significant impact on rural living standards in the targeted areas of the sample the consumption growth model suggests that households living in the targeted areas had a higher rate of consumption growth than one would have otherwise expected nonetheless the authors found that while the gains in growth were enough to prevent an absolute decline in average living standards they were not enough to reverse the strong underlying divergent tendencies in the rural economy

economic growth inequality and well being in advanced industrial societies rising levels of inequality have contributed strongly to the observed gap that has emerged between per capita income and the index of sustainable economic welfare isew which in its current versions is known as the genuine progress indicator gpi yet the isew gpi approach to measuring the social costs of inequality has been criticized as ad hoc the present paper reviews the literature on this topic and efforts to resolve it based on the construction of indicators grounded in a a classical utilitarian ethical framework and b empirical evidence on the relationship between income and well being in the united states after tax income per capita grew at an annual rate of 1 7 between 1979 and 2011 a growth rate of 1 2 per year arises when income is adjusted to account for the social costs of inequality the most common adjustment used in isew gpi studies yields a similar growth rate despite much smaller subtractions from baseline income

the index of sustainable economic welfare isew as an alternative to gdp in measuring economic welfare the results of the austrian revised isew calculation 1955 1992 abstract although the inadequacy of gdp to measure economic welfare is widely accepted theoretically it is still used as the key indicator for economic policy this article s aim therefore is to give some empirical evidence to the theoretical critique economic welfare or at least its change over time is estimated by the index of sustainable economic welfare isew which takes account of gdp unpaid household labor social costs environmental damage and income distribution the concept of the isew which was originally developed by herman daly and john cobb is entirely reformulated with special regard to questions of inner consistency and clarity in structure as an illustration the methods of the calculation in the austria case study and its results are presented the main result is that gdp and economic welfare as measured by the isew differ significantly up until the 1970s gdp only slightly overestimated the growth of economic welfare but since then it has been completely misleading while gdp continues to rise sustainable economic welfare has been stagnating since the middle of the 1980s the main causes have been growing future welfare reductions increasing income inequality and a stagnation in the value of unpaid household labor as gdp neglects those aspects it systematically misinterprets economic welfare however the isew does not intend to simply replace gdp as a unique welfare measure but should form part of a more holistic social reporting system

the genuine progress indicator methodological developments and results from australia abstract this paper is a contribution to the continuing development of the methods and results for the index of sustainable economic welfare also known as the genuine progress indicator gpi it attempts a more systematic approach to some of the components of the gpi it includes a more careful specification of types of capital and more plausible methods of estimating the costs of depletion of non renewable resources and environmental damage due to ozone depletion in addition the paper attempts a more comprehensive treatment of the value of time including the costs of unemployment and overwork results of the gpi calculations for australia over the period 1950 1996 are presented and analysed

economic openness and green gdp since the early 1990s there have been several attempts to develop national income accounting systems which recognize the negative impacts of environmental degradation and income inequalities on economic welfare collectively these bgreenq gross domestic product gdp studies have generated a wealth of new time series data sets which can be used to reexamine the links between gdp and a host of factors commonly included in traditional economic growth models in this paper we develop models of green gdp growth and the gap between traditional and green gdp by using a panel data set from eight countries spanning 30 50 years in both the growth and gap models the effects of economic openness are tested we find strong and robust results suggesting a negative nonlinear correlation between openness and green gdp growth and a positive nonlinear correlation between openness and growth of the gap between traditional and green gdp while green gdp accounting systems are still in their infancy our paper nonetheless implies that once these more comprehensive measures are fully developed empirical models which explore factors contributing to the growth of economic welfare over time should be reexamined d 2005 elsevier b v all rights reserved

reducing inequalities toward the development of a market for income inequality abstract the objective of this study is to propose the development of a market for income inequality by specifying a firm s contribution to income inequality and outlining a simple model to find the equilibrium price for a given target of income inequality reduction the paper reviews the concepts of firm heterogeneity and externalities in relation to income inequality it then proposes a model by establishing income inequality reduction targets for a population of firms presenting a marginal income inequality reduction cost curve and matching demand and supply to derive the equilibrium price and ends by simulating a market for income inequality reduction using data from a sample of fifteen firms this paper shifts the focus of income inequality research and policy to the firm and proposes a market based mechanism for firms to reduce income inequality

on income convergence among china hong kong and macau hong kong and macau were reunited with china in the late 1990s as two special administrative regions sars over the last half century they were china s good examples of economic development windows of openness and investors owing to historical reasons china lagged far behind hong kong and macau in terms of per capita incomes however rapid economic growth in china over the last three decades must have brought about a significant convergence of the three economies china s economic success has benefited from the integration of its two sars and the coastal provinces especially guangdong in terms of technological spillover massive investment and trade the economic trickledown direct investment and trade must have been important drivers of economic integration and income convergence this paper aims to analyse the trend and studies the determinants of income convergence between china and its two sars both parametric and non parametric techniques are employed to quantify the pace of convergence on per capita incomes in hong kong macau and the chinese provinces over a period of more than 40 years we find no evidence of convergence in the pre reform period but strong evidence of both absolute and conditional convergence in the post reform period over the reform period the pace of convergence is less than 1 per cent per annum without controlling for trade and more than 2 per cent conditional on trade

forecasting regional income inequality in china abstract in this study the mathematical models with gini coefficients and variation coefficients are used to study the time series properties of china s regional income differences the result shows that from 1952 to 1978 the differences increase from 1978 to the beginning of 1990s decrease and from the beginning of 1990s to 1995 increase a little in addition the multi level autoregressive models with time varying parameters are used to predict the differences of china s regional per capita income from 1996 to 2000 the per capita income levels of various regions in china have also been forecasted by using adaptive control algorithms to depict an acceptable level of income inequality for policy making

on the inefficiency of two part tariffs the partial equilibrium literature on two part tariffs suggests that if a commodity is produced under increasing returns efficiency can be achieved through marginal cost pricing and a suitable choice of entry fees fixed charge which may vary from consumer to consumer we show that this partial equilibrium intuition cannot be extended beyond some special cases even with a consumer specific fixed charge it is possible that none of the equilibria yield pareto efficiency furthermore it may be impossible to achieve pareto efficiency through any specification of taxes which are levied solely to cover losses hotelling 1939 and lerner 1944 among others see for example the surveys by ruggles 1949 1950 argued that firms operating under increasing returns to scale should be regulated to equate their marginal cost to the price of the output and the resulting losses financed through lump sum taxes being concerned primarily with efficiency issues the proponents of the marginal cost pricing principle did not advocate any particular distribution of the lump sum taxes among the consumers after the ensuing debate see for example ruggles 1950 there seems to have been a general agreement that marginal cost pricing is necessary for efficiency while admitting this coase 1946 presented an illuminating analysis of the drawbacks of what he called the hotelling lerner solution and also proposed an alternative solution it will be useful to begin by briefly recalling coase s criticism of the hotelling lerner solution apart from the practical problem of collecting lump sum taxes he emphasized two distinct drawbacks of the hotelling lerner scheme he claimed that this solution would not necessarily guarantee efficiency in the sense that it might lead to a marginal cost pricing equilibrium in which a positive amount of the commodity was produced whereas it would be better not to produce the commodity at all this can be restated simply as the argument that in the presence of non convexities marginal conditions need not guarantee global optimality there may be several marginal cost pricing equilibria some efficient and some inefficient as such this phenomenon can hardly be ruled out coase s second objection to the hotelling lerner solution was that it could effectively alter the income distribution if for instance a lump sum tax was imposed on all the consumers but only some of them consumed the commodity produced by the firm operating under increasing returns to scale then there would effectively be a redistribution in favour of those who consumed this subsidized commodity it was natural to keep the issue of efficiency separate from that of equity and coase argued that the hotelling lerner solution

inequality as a cause of environmental degradation abstract this paper advances two hypotheses first the extent of an environmentally degrading economic activity is a function of the balance of power between the winners who derive net benefits from the activity and the losers who bear net costs second greater inequalities of power and wealth lead all else equal to more environmental degradation

political equilibrium income distribution and growth this paper analyzes the impact of income distribution on growth when investment in human capital is the source of growth and individuals vote over the degree of redistribution in the economy the model has three main features first very different patterns of income distribution are conducive to high growth at different levels of per capita income second growth is associated with an externality whereby investment in human capital by one group increases the productivity of other groups thus potentially enabling them to invest in human capital third the initial pattern of income distribution and the resulting political equilibrium are crucial in determining whether the transmission of this externality is promoted in which case growth is enhanced or prevented in which case growth is stopped using a non overlapping generations model with voting i derive several empirical implications in particular the model implies an inverted u relation between levels of inequality and levels of income in cross sections but not necessarily in time series a result that seems consistent with a number of empirical studies

an index of sustainable economic welfare isew for chile abstract chile has experienced a period of strong economic growth the gross domestic product gdp has doubled in the past 12 years however income inequality remains relatively the same as in the 1960s the economic growth is primarily attributed to the exports of natural resources which accounts for 80 of total exports however the gdp fails to account for the loss of natural capital and non marketed services the objective of this paper is to more clearly indicate the status of the chilean economy in terms of welfare using the index of sustainable economic welfare isew designed by daly and cobb 1989 the isew provides corrections to the gdp that includes income inequalities household labor and damage to natural capital this index has been applied in several case studies for developed countries in general the results show that isew runs parallel with gdp until the 1970s when a decline in welfare occurs due to a loss in natural capital this study is the first attempt to utilize the isew for the purpose of analyzing whether or not similar trends exist for chile a developing country the isew for chile grew at a much slower annual rate over the past 30 years compared with gdp 0 16 vs 2 9 the chilean isew parallels the gdp until the 1980s a decline in the isew then occurs showing that chile is not on a sustainable path and that there is a strong link between economic growth and the depletion of natural resources

power distribution the environment and public health a state level analysis abstract this paper examines relationships among power distribution the environment and public health by means of a cross sectional analysis of the 50 us states a measure of inter state variations in power distribution is derived from data on voter participation tax fairness medicaid access and educational attainment we develop and estimate a recursive model linking the distribution of power to environmental policy environmental stress and public health the results support the hypothesis that greater power inequality leads to weaker environmental policies which in turn lead to greater environmental degradation and to adverse public health outcomes

the population problem theory and evidence this study is concerned with the relationships among population growth poverty and environmental degradation with particular focus on the situation in developing countries the author rejects the concept of a general theory of fertility behavior in favor of an interpretation of these relationships which might be applicable to certain situations in the poorest parts of the indian subcontinent and sub saharan africa such situations include unacceptable risks of maternal death for poor illiterate women and a condemnation to extreme poverty in conditions of the deterioration of local resources and of the environment the author concludes that population growth rates are too high in certain specific areas and that an appropriate policy reaction to such conditions would be to try to change the options that men and women face so that their reasoned choice would be to lower their fertility

consumption sustainable welfare and human needs with reference to uk expenditure patterns between 1954 and 1994 abstract this paper explores the complex relationship between economic consumption and human welfare or well being conventional economics suggests that increasing levels of economic consumption lead to increasing levels of well being however this view has been criticised on both environmental and social grounds on the one hand the material impacts of increasing consumption are environmentally unsustainable on the other hand material consumption can conflict with crucial social and psychological components of human welfare this paper develops a perspective on human welfare which is based on max neef s characterisation of human needs it discusses the implications of this alternative perspective for the conventional viewpoint and illustrates the importance of it with reference to patterns of consumer expenditure in the uk over the last 40 years the authors suggest that from this perspective modern societies may be seriously adrift in their pursuit of human well being however they also point out that addressing this situation provides far more opportunity for ecologically sustainable development than is generally recognised

net national product as an indicator of sustainability net national product nnp can potentially serve several objectives among others to measure value added and to be an indicator of welfare in the aftermath of the world commission on environment and development however it also seems important to investigate whether the concept of nnp can serve as an indicator of sustainability my point of departure following hicks 1946 ch 14 is therefore to require that nnp should measure what can be consumed in the present period without reducing future consumption possibilities and in line with this to argue that the nnp should equal the maximum per capita consumption level that can be sustained if sufficiently many facilitating assumptions are made then a concept of nnp that serves as an exact indicator of sustainability can easily be constructed for instance for a closed economy with a constant population a stationary technology and with only one capital good it follows that the present does not reduce future consumption possibilities if and only if it does not decrease the stock of the single capital good hence under the assumption that the one capital good k is identical to the one consumption good x nnp defined as y x k measures the maximal sustainable consumption at time t because then x y is equivalent to k the purpose of this note is to establish that with multiple capital goods it is not in general possible to construct an exact indicator of sustainability on the

australia s genuine progress indicator revisited 1962 2013 abstract the genuine progress indicator gpi has been proposed as an alternative to gdp as an indicator of national progress gpi includes 26 components that adjust gdp for inequality include household and volunteer work and subtract a number of social and environmental costs best seen as negatives the gpi has been estimated for over 20 countries and many states and territories this paper updates australia s gpi to determine whether australia as a nation has progressed overall since the 1960s and compares two alternative approaches that differ in some important details we find that despite these differing approaches we find that gpi remained largely stagnant from the 1960s through to the 1990s and only at the turn of the century has gpi started to increase despite increasing negative environmental costs while gpi is well placed to serve as an improved australian and global measure of national progress further work is needed to measure national well being and support its integration into political decision making and to include the full range of subjective and objective indicators ultimately this paper argues that while gpi is well placed to serve as a new australian and global measure of well being we stress the need for an alternative indicator like gpi to supplement gdp and to better inform policy decisions

intra generational equity and sustainable welfare a time series analysis for the uk and sweden this paper discusses the importance of intra generational equity to sustainable development it outlines a number of methodologies for measuring income inequality in the economy and presents several possible ways of incorporating the impact of distributional effects into measures of welfare in the economy the authors highlight in particular an index developed by atkinson atkinson a b 1970 distributive politics and economic growth q j econ may 465 490 based on the social welfare model this method possesses two main advantages over other methods firstly it is expressed directly in terms of social well being secondly value judgements incorporated into the measure are made explicit through the parameter o which expresses society s degree of aversion to income inequality the paper calculates the value of the atkinson index for two case study countries sweden and the uk between 1950 and 1996 for a central estimate of o0 8 the results show that the welfare loss due to inequalities in the distribution of income varied between 5 and 10 for sweden and between 6 and 14 for the uk with the higher values coming towards the end of the period the paper explores the sensitivity of these results to changes in the value of o for the case of the uk and discusses the relevance of the work to the measurement of sustainable welfare 2000 elsevier science b v all rights reserved

allocation distribution and scale towards an economics that is efficient just and sustainable abstract the practical policy of issuing tradeable permits for depletion and pollution requires for its implementation the clear separation of the three basic economic goals of efficient allocation equitable distribution and sustainable scale economic theory needs to catch up with policy in recognizing that scale issues cannot be reduced to either allocation or distribution

measuring resource inequalities the concepts and methodology for an area based gini coefficient abstract although inequalities in income and expenditure are relatively well researched comparatively little attention has been paid to date to inequalities in resource use this is clearly a shortcoming when it comes to developing informed policies for sustainable consumption and social justice this paper describes an indicator of inequality in resource use called the ar gini the ar gini is an area based measure of resource inequality that estimates inequalities between neighbourhoods with regard to the consumption of specific consumer goods it is also capable of estimating inequalities in the emissions resulting from resource use such as carbon dioxide emissions from energy use and solid waste arisings from material resource use the indicator is designed to be used as a basis for broadening the discussion concerning food deserts to inequalities in other types of resource use by estimating the ar gini for a wide range of goods and services we aim to enhance our understanding of resource inequalities and their drivers identify which resources have highest inequalities and to explore trends in inequalities the paper describes the concepts underlying the construction of the ar gini and its methodology its use is illustrated by pilot applications specifically men s and boys clothing carpets refrigerators freezers and clothes washer driers the results illustrate that different levels of inequality are associated with different commodities the paper concludes with a brief discussion of some possible policy implications of the ar gini

distribution of ecological entitlements implications for economic security and population movement abstract the concept of economic and environmental security is explored in a broad sense as a series of necessary entitlements to forest and other resources traditional measures of inequality such as the gini coefficient or the atkinson index of inequality which rely on measures of the distribution of formal cash income or wealth are regarded as flawed to the extent that they do not adequately reflect the value and distribution of access to non marketed goods and services an ecologically sensitive atkinson or gini index is proposed as a more relevant measure of inequality and of economic and environmental security to improve security policies must attempt to improve the value of these indices an empirical example is provided based on household survey data for 357 households in 24 villages in a rainforest zone of cameroon analyses of data relating to forest use incomes and demographics provides insights into the distribution of ecological entitlements across various income groups and into the impacts of these entitlements on economic and environmental security through measures related to population migration the empirical analysis demonstrates a number of important conclusions a use of ecologically adjusted indices provides a more complete picture of inequality inequality in the forest zone is less pervasive than traditional measures would have us believe b traditional forest entitlements contribute positively to reducing inequality and improving security and c income support programs targeted to conventional cash crops cocoa and coffee increase inequality and reduce security the analyses also demonstrate that when other economic factors have been taken into account population movement can be a useful indicator of environmental security an analysis of migration demographic and income patterns suggests that low population movement in this zone can be construed as an indicator of higher environmental security the analysis also provides direct evidence that a decline in ecological entitlements increases the probability of migration out of an area

sharing resources the global distribution of the ecological footprint abstract this paper examines how the human demand on bioproductive lands as measured by the ecological footprint is distributed across the globe using methods commonly used to measure the distribution of income measuring the distribution of natural resource use will be necessary to achieve an economy that is sustainable just and efficient currently different nations place different demands on the environment i e the ecological footprint is not evenly distributed across the globe calculation of the gini coefficient for total ecological footprint and its components explains the sources of inequality in overall resource use calculation of the atkinson index shows how inequality in the ecological footprint is related to the inequality of income and environmental intensity

is perfect price discrimination really efficient welfare and existence in general equilibrium we examine the welfare properties of surplus maximization by embedding a perfectly discriminating monopoly in an otherwise standard arrow debreu economy although we discover an inefficient equilibrium we validate partial equilibrium intuition by showing i that equilibria are efficient provided that the monopoly goods are costly and ii that a natural monopoly can typically use personalized two part tariffs in these equilibria however we find that pareto optima are sometimes incompatible with surplus maximization even when transfer payments are used we provide insight into the source of this difficulty and give some instructive examples of economies where a second welfare theorem holds

between ostrom and nordhaus the research landscape of sustainability economics abstract we survey the emerging research area of sustainability economics through a quantitative full text analysis of peer reviewed journal publications from 1987 to 2013 to identify relevant contributions we draw on existing definitions of sustainability economics for a keyword based identification strategy a combined focus on a the human nature relationship b the long term uncertain future c normative orientation towards sustainability and d economic analysis our analysis of a random subsample of 343 relevant papers reveals that i sustainability economics is a rapidly developing research area ii while theoretical contributions shaped the area in earlier years applied work now constitutes the largest share of contributions iii the research landscape can be clustered into eleven research clusters these range from participatory governance of social ecological systems associated with the work of elinor ostrom to questions of intertemporal allocation and distribution applied to climate economics associated with the work of william nordhaus iv the research area is broad in scope and heterogeneous and there is relatively little interaction between important clusters v relevant contributions are published in more than 100 journals ten journals publish half of all contributions led by ecological economics and 40 appear in non economics journals underscoring the importance of interdisciplinary dialogue

existence of lindahl equilibria in economies with nonconvex production sets abstract in this article we establish the existence of lindahl equilibria in an economy with public goods which may exhibit increasing returns to scale or more general types of nonconvexities in the production sector this result generalizes several previous results in the literature we give a simple proof by using an auxiliary economy with an enlarged space of goods

public investment and regional inequality in rural china this paper develops a method for decomposing the contributions of various types of public investment to regional inequality and applies the method to rural china public investments are found to have contributed to production growth in both the agricultural and rural non agricultural sectors but their contributions to regional inequality have differed by type of investment and the region in which they are made all types of investment in the least developed western region reduce regional inequality whereas additional investments in the coastal and central regions worsen regional inequality investments in rural education and agricultural r d in the western region have the largest and most favorable impacts on reducing regional inequality

poverty income distribution and policy making this paper deals with the key distributional issues arising from the regulation of the environment and the management of natural resources the paper is divided into a section dealing with poverty and a section dealing with broader income distribution effects although there is much discussion of the linkages of poverty to environmental degradation empirical studies establishing these linkages are few the relationship is critically dependent on the institutional structures in the countries concerned and how they respond to changing environmental pressures on the broader distributional impacts the papers focusses on the analysis of ganiers and losers from environmental regulations the analysis is complex because the direct incidence is not the same as the final incidence much of the work has looked only at the former in addition the political economy of regulation needs to pay greater attention to impacts on key and vulnerable groups more so than can be done by looking at broad income bands

evolutionary psychology in ecological economics consilience consumption and contentment abstract this paper makes the case that if ecological economics seeks consilience with biology it must acquaint itself with evolutionary theories about social development and human behaviour the author reviews some of the literature in this area particular attention is paid to the newly emerging discipline of evolutionary psychology which sets out a neo darwinian view of human nature in which individual and social behaviour is dominated by the evolutionary strategies of the selfish gene the paper discusses the relevance of this perspective for two specific problem areas in ecological economics the first of these is the question of consumption and consumer behaviour the second is the problem of mismatch between the pursuit of economic growth and social well being or contentment these examples illustrate that evolutionary psychology may sometimes provide a natural ally for ecological economics in particular pointing up certain failures of conventional economics on the other hand it also offers harsh lessons concerning the difficulty of changing evolved behaviour patterns the paper suggests three possible avenues of response by ecological economists to the insights of evolutionary psychology

marginal cost pricing under bounded marginal returns most of the available results on the existence of marginal cost pricing equilibrium are unsatisfactory in that they make a survival assumption that is stated as a condition on the production equilibria of the economy the primary objective of this paper is to provide a relatively elementary existence result that replaces such an assumption with one on the primitive data of the economy the author s main assumption is that no firm faces unbounded increasing returns in the sense that if it uses some input then the rate at which this input can be substituted into an output is finite copyright 1992 by the econometric society

beyond gdp measuring and achieving global genuine progress article i nfo while global gross domestic product gdp has increased more than three fold since 1950 economic wel fare as estimated by the genuine progress indicator gpi has actually decreased since 1978 we synthesized estimates of gpi over the 1950 2003 time period for 17 countries for which gpi has been estimated these 17 countries contain 53 of the global population and 59 of the global gdp we compared gpi with gross domestic product gdp human development index hdi ecological footprint biocapacity gini coefficient and life satisfaction scores results show a significant variation among these countries but some major trends we also estimated a global gpi capita over the 1950 2003 period global gpi capita peaked in 1978 about the same time that global ecological footprint exceeded global biocapacity life satisfaction in almost all countries has also not improved significantly since 1975 globally gpi capita does not increase beyond a gdp capita of around 7000 capita if we distributed income more equitably around the planet the current world gdp 67 trillion yr could support 9 6 billion people at 7000 capita while gpi is not the perfect economic welfare indicator it is a far better approximation than gdp development policies need to shift to better account for real welfare and not merely gdp growth

income inequality in the people s republic of china trends determinants and proposed remedies the issue of income inequality in the people s republic of china prc has attracted world wide attention leading to a sizable literature this paper attempts to provide a nonexhaustive literature review of the prc s inequality trends and determinants and suggested government interventions it discusses profiles of income inequality along three dimensions interhousehold disparity regional divides and urban rural gaps this is followed by an exploration of the driving forces behind rising inequality including the notorious hukou system policy biases location or geographic factors globalization and education finally the paper summarizes and proposes government interventions for containing or reducing income inequality in the prc important areas for future research are also suggested in the final section of the paper

externalities and fundamental nonconvexities a reconciliation of approaches to general equilibrium externality modeling and implications for decentralization abstract starrett 1972 33 and boyd and conley 1997 7 approaches to externality modeling are unified by distinguishing between producible and nonproducible public commodities nonconvexities are associated with detrimental producible public commodities but not with nonproducible public commodities in boyd and conley 1997 7 disposability properties costly or costless imply that producible public commodities are either by products e g pollution or joint products e g national defense markets fail for both beneficial and detrimental by products nonconvexities imply that price based equilibria e g pigovian tax equilibrium may not be pareto efficient foley s 1967 1970 17 18 public competitive equilibrium combines price and quantity signals with a unanimity criterion and restores the equivalence between equilibrium and efficiency

cost minimization and regulation in general equilibrium an example abstract we present a general equilibrium example in which cost minimizing behavior prevents the economy from reaching the pareto optimal allocation in the example a firm with non convex technology can use two different inputs to produce a single output pareto optimality requires that the firm use the more costly input and it is therefore impossible to achieve the optimum when the firm minimizes costs

what difference do polarisation measures make an application to china in recent years there has been much discussion of the difference between inequality and polarisation the vast literature on inequality is held to miss out key features of distributional change which are better described as changes in polarisation axioms have been proposed which capture some of these differences and measures of polarisation as distinct from inequality have been suggested the theoretical distinctions proposed in this literature are indeed interesting but do the newly proposed measures of polarisation give different results in comparing societies over time we address these questions for china where dramatic increases in inequality and polarisation have been much discussed in the literature we find that contrary to theoretical expectation the new measures of polarisation do not generate very different results from the standard measures of inequality the paper ends by considering a different approach to polarisation which might better conform to the policy concerns expressed in t

measuring fossil resource inequality a case study for the uk between 1968 and 2000 this paper quantifies fossil resource inequalities amongst income quintiles in the uk between 1968 and 2000 it calculates a resource based gini coefficient using an input output based resource allocation model the results show that the gini coefficient for total fossil resource consumption grew by 24 over the time period by comparison the gini coefficient for overall household expenditure rose by only 13 the increase in resource inequality was prompted by the rising demand by high income quintiles for goods and services such as fuel and light heating and lighting the home car use private transportation recreation travel and other services the analysis shows further that the gini coefficient for direct fossil resources fuel and light and car use was lower and rose less steeply than the gini coefficient for fossil resources embodied in other goods and services indirect fossil resource requirements investigation into the drivers behind direct and indirect resource inequalities suggests a number of policy conclusions firstly it is clear that policy initiatives to reduce fossil resource requirements and the associated climate change impacts must pay careful attention to distributional differences additionally increased attention needs to be paid to the inequalities associated with indirect fossil resources consumption as well as the more visible direct resource inequalities

regional inequalities economic growth and liberalisation a study of the indian economy in this article we examine the pattern of regional inequalities in india during 1970 92 trend analysis shows that inter state inequality is rising in india in almost every sphere of economic activity particularly in the unorganised industry

developing approaches to measuring and monitoring sustainable development in wales a review munday m and roberts a 2006 developing approaches to measuring and monitoring sustainable development in wales a review regional studies 40 534 535 under the 1998 government of wales act the welsh assembly government committed to the promotion of sustainable development in the exercise of its functions the paper examines a selection of approaches that are being explored in wales to monitor and measure progress towards sustainable development objectives these approaches are the ecological footprint the index of sustainable economic welfare the environmental satellite account and environmental input output tables the paper shows that in wales there are problems with each of the approaches outlined but that development of an environmental satellite account could be useful with this approach linked to the other approaches reviewed and with the satellite account enabling environmental factors to be connected more readily to conventional regional accounting aggregates the findings are expecte

five capital impact assessment appraisal framework based on theory of sustainable well being abstract this paper sets out to formulate an appraisal approach in context with sustainable development in conventional project appraisal such as energy undertakings most emphasis is placed on financial flows and rate of return on infrastructure investments although current greenhouse gas emissions are estimated to pose large costs on future generations these emissions are generally not estimated as part of the investment cost other public goods may also be omitted because their value is not recognized we review conventional cost benefit assessment and propose a new broader evaluation this new evaluation approach is based on the theory that five capital value types support long term well being rather than economic growth alone the theory states that humans depend on the size of stocks and flows from natural manufactured human social and financial capital we describe the five capitals to illustrate the value categories and outline an approach to evaluate all these in the context of energy development

responsibility for regional waste generation a single region extended input output analysis for wales this paper uses a regional input output framework and data derived on waste generation by industry to examine different aspects of regional waste accountability in addition to estimating a series of industry output waste coefficients the paper considers a series of methods for waste attribution from production and consumption perspectives in particular it considers a method that permits a greater focus on regional private and public final consumption as the main exogenous driver of waste generation in doing so it uses a domestic technology assumption to consider a regional waste footprint where local consumption requirements are assumed to be met using production technologies over which regional authorities are likely to have more control

the inequality adjusted human development index a constructive proposal abstract this paper proposes a method to incorporate a concern for distributional inequalities of income education and longevity into the framework of the human development index hdi as it is presently designed by the united nations development programme the paper constructs gini coefficients for a set of 20 developing countries measuring inequalities in annual income educational attainment and life span attainment these calculations are combined with data from the hdi to produce an inequality adjusted human development index iahdi the implications of this proposed index for evaluating and promoting development are considered

economic growth quality environmental sustainability and social welfare in china provincial assessment based on genuine progress indicator gpi abstract in order to devise scientific and sustainable development strategy it is vital to assess the quality of economic growth as a useful complement to traditional economic indicators gpi s most reputed virtue is its great improvement in evaluating environmental and social costs in this paper we estimate the gpi for all 31 provinces in mainland china from 1997 to 2016 gpi estimation is highly sensitive to income inequality climate change damage and depletion of non renewables we address contestable methodological assumptions associated with the three items which have been usually ignored in empirical studies we use the atkinson index in place of the gini index as a measure of income inequality we avoid the problematic duplicated counting of climate change damage and the unjustified cost escalation factor in depletion of non renewables our results show that first gpi per capita has recently declined in some provinces unveiling a threat to social welfare and sustainability second the relative threshold effect the progress of social welfare promotion is slower than the expansion of economic scale has been found in many provinces third resource consumption and environmental pollution especially water pollution and carbon emissions would generate substantial welfare losses

on the existence of lindahl hotelling equilibria abstract we consider an economy characterized by the simultaneous presence of public goods and many increasing returns to scale firms we formalize a notion of equilibrium termed a lindahl hotelling equilibrium in which producer prices are marginal cost prices and the public goods are financed through lindahl prices sufficient conditions are provided for such an equilibrium to exist

urban rural gap and poverty traps in china a prefecture level analysis urban rural gap and regional inequality are long standing problems in china and result in considerable number of studies this article examines the dynamic behaviours of incomes for both urban and

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

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

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

does slow growth lead to rising inequality some theoretical reflections and numerical simulations this paper explores the hypothesis most notably made by french economist thomas piketty that slow growth rates lead to rising inequality if true this hypothesis would pose serious challenges to achieving prosperity without growth or meeting the ambitions of those who call for an intentional slowing down of growth on ecological grounds it would also create problems of social justice in the context of a secular stagnation the paper describes a closed demand driven stock flow consistent model of savings inequality and growth in a macroeconomic framework sigma with exogenous growth and savings rates sigma is used to examine the evolution of inequality in the context of declining economic growth contrary to the general hypothesis we find that inequality does not necessarily increase as growth slows down in fact there are certain conditions under which inequality can be reduced significantly or even eliminated entirely as growth declines the paper discusses the implications of this finding for questions of employment government fiscal policy and the politics of de growth

national wealth and net national product solow 1986 established that corresponding to constant consumption programs with essential exhaustible resource stocks there was a capital value that was remaining constant he thus obtained a hick s type of result namely that current consumption left capital intact solow was using weitzman 1976 as a point of departure it turns out that there is a quite general solow type of result namely that nnp t is interest on the value of accumulated capital v t where v t can include diminutions in natural resource stocks and the interest rate is the social discount rate a weitzman 1976 result is that nnp t is interest on capital where capital is discounted future optimal consumption the interest rate being the discount rate there is then an attractive duality here forward views of capital discounted future optimal consumption programs at date t coincide with backward views of capital current value of accumulated stocks at date t first we observe the weitzman result as the solved bellman equation in dynamic programming this leads directly to the result that nnp t is interest on the value of accumulated capital next we re work the derivations with an essential exhaustible resource and then with endogenously produced knowledge

interprovincial disparities in china output and consumption 1952 1987 the flood of economic information from china in recent years has permitted reassessment of the chinese model of development and the extent to which china s own development experience has conformed to it the prevailing consensus of the 1970s concerning the substance of the model itself typically characterized in terms of the chinese leadership s objectives and priorities and its strategy for pursuing them has stood up quite well the same cannot be said about past appraisals of the extent to which china s economic reality has been reshaped to accord with the model s prescriptions one of the most widely remarked elements of the chinese model is the high priority assigned to regional objectives and more specifically to balance in the distribution of productive capacity and equity in the distribution of income and hence consumption during the maoist era i e prior to 1979 the central government pursued regional objectives through such measures as interregional transfers of investment resources effected via the planning system subsidization of health and education expenditures in poor regions and attempts to maintain a safety net of state relief effected largely via control of grain surpluses in short there is little doubt that prior to 1979 the chinese leadership placed an unusually high value on the spread of modern growth and the improvements in welfare associated with it and persistently acted to limit the emergence or widening of interregional disparities although china s post mao leaders have shown greater concern with efficiency and with the potential trade offs between efficiency and such goals as balance and equity their continuation of many redistributive policies indicates that they have not abandoned regional objectives but how successful has china been in achieving these objectives

on the methodology of isew gpi and related measures some constructive suggestions and some doubt on the threshold hypothesis existing country studies of the index of sustainable economic welfare isew the genuine progress indicator gpi and related measures while sharing the same basic methodological approach differ with respect to the valuation of important items this paper provides a critical but constructive discussion of the various methods used for the valuation of non renewable resource depletion and long term environmental damage and for the weighting of consumption expenditures for income inequalities several recommendations are given on how to improve the methodology for future updates of existing studies or for the construction of new measures sensitivity analysis shows that if these recommendations are followed for the valuation of resource depletion and long term environmental damage then the so called threshold hypothesis which seems to have gained empirical support from all studies undertaken so far fails to materialise this suggests that as far as factors related to the environment are concerned the widening gap between isew and gpi on the one hand and gross national product gnp on the other might be an artefact of highly contestable methodological assumptions 2000 elsevier science b v all rights reserved

existence of competitive equilibrium under financial constraints and increasing returns abstract this paper studies a factor cost in advance model with increasing returns in production in the model both partial equilibrium and general equilibrium may exist since working capital of firms limit their input demand we provide a sufficient condition for the existence of partial equilibrium of a firm operating on a non convex choice set furthermore we establish the existence and uniqueness of competitive equilibrium in the special case of logarithmic utility

a numerical simulation analysis of hukou labour mobility restrictions in china abstract we use numerical simulation methods to analyze the hukou system of permanent registration in china which many believe has supported growing relative inequality over the last 20 years by restraining labour migration both between the countryside and urban areas and between regions and cities our aim is to inject economic modelling into the debate on sources of inequality in china which thus far has been largely statistical we first use a model with homogeneous labour in which wage inequality across various geographical divides in china is supported solely by quantity based migration restrictions urban rural areas rich poor regions eastern central and western non coastal zones eastern and central western development zones eastern central western zones more disaggregated 6 regional classifications and an all 31 provincial classification we calibrate this model to base case data and when we remove migration restrictions all wage and most income inequality disappears results from this model structure points to a significant role for hukou restrictions in supporting inequality in china we then present a further model extension in which urban house price rises retard rural urban migration the impacts of removing hukou restrictions on migration are smaller but are still significant finally we modify the model to capture labour productivity differences across regions calibrating the modified model to estimates of both national and regional gini coefficients removal of migration barriers is again inequality improving but less so

the existence of marginal cost pricing equilibria with increasing returns the competitive mechanism fails in economies with nonconvex technologies competitive equilibria do not exist in general and pareto optima are no longer equilibria the search for alternative mechanisms in economies with increasing returns was developed and resulted in the principle of marginal cost pricing modern economic theory has returned to the foundations of marginal cost pricing theory in a general equilibrium framework the existence of equilibria with marginal cost pricing in economies with increasing returns and a more general type of nonconvexities is analyzed in this paper the case of differentiable economies where all production sets are limited by smooth surfaces is developed the principles of the proof are also extended to the nondifferentiable case

economic reform and interprovincial inequalities in china abstract this note is an attempt to explore two issues 1 the trend of interprovincial inequality in the post 1978 reform era in china and 2 the factors behind the dynamics of interprovincial inequality using recently released provincial gross domestic product gdp data we have shown that interprovincial inequality decreased in the fast half of the 1980s but started to increase in the second half of the 1980s to understand the impact of sectoral reforms on interprovincial inequality the overall inequality in provincial per capita gdp is decomposed into the contributions by the primary secondary and tertiary sectors it seems that the trend of interprovincial inequality has been largely induced by the reforms of the industrial sector which make up a large share of the secondary sector in addition national income data from the socialist national accounting system are used to identify the impact of interprovincial resource flows on interprovincial inequalities the findings seem to suggest a relative decline in the role of redistributive budgetary transfers