indeterminacy of stationary equilibrium in stochastic overlapping generations models abstract in this paper we consider the local uniqueness properties of stationary rational expectations equilibria ree in a stochastic overlapping generations olg model it is known that in non stochastic olg models steady state equilibria are locally isolated although there may exist indeterminate non stationary perfect foresight equilibria we show by construction that in the stochastic model even stationary equilibrium may be indeterminate we also show that this result is robust in the sense that there exists a non empty open set of economies for which the result is true

taxing food and beverages theory evidence and policy we developed a theoretical framework to examine the effect of a change in sales or excise tax on food and beverage demand after considering that consumers may have imperfect tax knowledge are sometimes inattentive to sales tax may not be informed of a sales tax change and pay no sales tax on eligible food or beverages if using food stamps we conducted simulations to assess how much the sales tax elasticity of demand should be adjusted downward from the price elasticity of demand and quantified the advantage of using an excise tax as an anti obesity policy copyright 2013 oxford university press

slow boom sudden crash abstract many asset markets exhibit slow booms and sudden crashes this pattern is explained by an endogenous flow of information in the model agents undertake more economic activity in good times than in bad economic activity generates public information about the state of the economy if the economic state changes when times are good and information is abundant asset prices adjust quickly and a sudden crash occurs when times are bad scarce information and high uncertainty slow agents reactions as the economy improves a gradual boom ensues data from u s and emerging credit markets support the theory

the danish tax on saturated fat short run effects on consumption substitution patterns and consumer prices of fats abstract denmark introduced a tax on saturated fat in food products with effect from october 2011 the objective of this paper is to make an effect assessment of this tax for some of the product categories most significantly affected by the new tax namely fats such as butter butter blends margarine and oils this assessment is done by conducting an econometric analysis on weekly food purchase data from a large household panel dataset gfk panel services denmark spanning the period from january 2008 until july 2012 the econometric analysis suggest that the introduction of the tax on saturated fat in food products has had some effects on the market for the considered products in that the level of consumption of fats dropped by 10 15 furthermore the analysis points at shifts in demand from high price supermarkets towards low price discount stores at least for some types of oils and fats a shift that seems to have been utilised by discount chains to raise the prices of butter and margarine by more than the pure tax increase due to the relatively short data period with the tax being active interpretation of these findings from a long run perspective should be done with considerable care it is thus recommended to repeat and broaden the analysis at a later stage when data are available for a longer period after the introduction of the fat tax

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

a macroeconomic model with a financial sector this paper studies a macroeconomic model in which financial experts borrow from less productive agents we pursue four sets of results i the economy is prone to instability and occasionally enters volatile episodes as volatility spikes agents precautionary motive increases depressing prices even further log linear approximations fail to capture these non linear effects that can cause economies to be significantly depressed for long periods of time ii endogenous risk during volatile episodes increases asset price correlations iii financial experts impose a negative externality on each other and on the labor sector by not maintaining adequate capital cushion and funding structure iv while risk sharing within the financial sector through securitization and derivatives contracts reduces many inefficiencies it can also amlify systemic risks

the allocation of aggregate risk secondary market trades and financial boom bust cycles the financial crisis of 2007 08 started with the collapse of the market for collateralized debt obligations backed by subprime mortgages in this paper we present a mechanism aimed at explaining how a freeze in a secondary debt market can be amplified and propagated to the real economy and thereby cause a recession moreover we show why such a process is likely to be especially strong after a prolonged expansion based on the growth of consumer credit and endogenously low risk premia hence our model offers a new perspective on the links between the real and financial sectors and we show how it can help make sense of several macro economic features of the 2001 09 period the key elements of the model are heterogeneity across agents in terms of risk tolerance a financial sector that allocates systematic risk efficiently across agents and real decisions that depend on the price of risk

habit formation and demand for sugar sweetened beverages using scanner data we estimated demand for nine nonalcoholic beverages under habit formation we found strong evidence for habit formation although demand for sugar sweetened beverages by low income households is less elastic to own price changes compared with high income households there is evidence that high income households consider beverages to be more substitutable than low income households do a half cent per ounce tax on store purchased sugar sweetened beverages will result in a moderate reduction in consumption of sugar sweetened beverages for both income strata because of habit formation long run national tax revenue from a sugar sweetened beverage tax is about 15 to 20 lower than short run revenue

financial intermediation business failures and real business cycles in this paper a general equilibrium business cycle model is construct ed that when subjected to real disturbances mimics observed qualita tive comovements among real output money business failures risk pr emia intermediary loans and prices in contrast monetary disturban ces generate cycles that have several inconsistencies with empirical evidence thus providing support for real business cycle theory at th e expense of monetary theories of the business cycle financial inter mediation arises endogenously in the model and intermediation matters for business cycle behavior a credit supply mechanism acts in tande m with an intertemporal substitution effect in propagating stochastic disturbances copyright 1987 by university of chicago press

viewpoint can u s local soda taxes continue to spread abstract taxes to reduce the consumption of sugar sweetened beverages ssbs such as soda drinks have been endorsed by the world health organization and are now in place in france hungary and mexico and scheduled for portugal south africa and great britain such taxes have so far been impossible to enact in the united states at the state or federal level but since 2014 seven local jurisdictions have put them in place three necessary conditions for local political enactment emerge from this recent experience democratic party dominance external financial support for pro tax advocates and a political message appropriate to the process public health for ballot issues budget revenue for city council votes roughly 40 percent of americans live within local jurisdictions where the democratic party dominates so room exists for local ssb taxes to continue spreading

sunspot like effects of random endowments abstract random endowments can affect economic outcomes in two ways directly by affecting resources and indirectly by endogenously affecting expectations this second effect which we call a sunspot like effect allows prices to overreact to movements in fundamentals we prove that sunspot equilibria can be viewed as the limiting case of markets overreacting to small shocks to fundamentals two examples illustrate the theorem and show that sunspot like effects can be present even with significant shocks to fundamentals

economics an emerging small world we study the evolution of social distance among economists over the period 1970 2000 while the number of economists has more than doubled the distance between them which was already small has declined significantly the key to understanding the short average distances is the observation that economics is spanned by a collection of interlinked stars a star is an economist who writes with many other economists most of whom have few coauthors and generally do not write with each other

soft drink prices sales body mass index and diabetes evidence from a panel of low middle and high income countries we take advantage of four different cross country datasets containing data on 78 countries for the period 1999 2014 in order to assess the relationship of carbonated soft drinks sales as well as their prices with body mass index bmi overweight obesity and diabetes using an ecological study design and multivariate regression longitudinal estimation approaches we find that carbonated soft drink sales were significantly positively related to bmi overweight and obesity but only in the low and lower middle income countries this finding was robust to a number of sensitivity and falsification checks in this sub sample an increase in per capita soft drink sales by 1 litre per year was related to an increase of bmi by about 0 009 kg m2 p 0 1 this is a small effect implying that halving annual consumption per capita in this group of countries would result in a drop of bmi by only about 0 03 kg m2 although soft drink prices were negatively related to weight related outcomes in the sample of higher middle income and high income countries this finding was not robust to falsification checks the results thus suggest that sales restrictions to steer consumers away from soft drinks could indeed have a beneficial health effects in poorer countries although the effect magnitude appears to be very small however given potential limitations of using ecological research design results from individual level studies would be required to further ascertain the role of soft drink sales and prices in obesity and diabetes

the impact of a soda tax on prices evidence from french micro data abstractbased on an original data set of more than 500 000 non alcoholic beverage price records we evaluate the impact on consumer prices of the soda tax an excise on drinks with added sugar or sweetener introduced in france in january 2012 we adopt a difference in differences approach and find that the tax was gradually passed through to the prices of the taxed beverages after 6 months of its introduction it was fully shifted to soda prices and almost fully shifted to the prices of fruit drinks while the pass through for flavoured waters was incomplete we also find that the pass through was heterogeneous across brands and retail groups

soda wars the effect of a soda tax election on university beverage sales author s taylor rlc kaplan s villas boas sb jung k abstract 2019 western economic association international we examine how soda sales changed due to the campaign attention and election outcome of a local excise tax on sugar sweetened beverages using panel data of beverage sales from university retailers in berkeley california we estimate that soda purchases relative to control beverages significantly dropped immediately after the election months before the tax was implemented in the city of berkeley or on campus supplemental scanner data from off campus retailers reveal this result is not unique to the university setting our findings suggest soda tax media coverage and election outcomes can have larger effects on purchasing behavior than the tax itself jel d12 h20 c23 i38 q18

demand elasticities for fresh fruit at the retail level the obesity epidemic in the us and elsewhere has re doubled efforts to understand determinants of the quality of consumers diets part of the discussion has centered on the potential of fat taxes and or the subsidization of the purchase of fresh fruits and vegetables to coax consumers to better diets whether this discussion has merit or not fundamental to the debate are the demand elasticities of the commodities involved this study employs weekly data from several retail stores on fruit prices and sales to estimate elasticities of individual fruits estimates show consumers are more responsive to price than has been found previously

the effects of a fat tax on french households purchases a nutritional approach this article assesses the effects of a fat tax on the nutrients purchased by french households across different income groups this is done by making a preliminary estimation of price elasticities using a complete demand system on household scanner data and by calculating nutrient elasticities using estimated price elasticities we find that a fat tax has small and ambiguous effects on nutrients purchased by french households and a slight effect on body weight in the short run with a greater effect in the long run such a tax generates substantial tax revenue but is highly regressive

the credit crisis conjectures about causes and remedies what caused the financial crisis that is sweeping across the world what keeps asset prices and lending depressed what can be done to remedy matters while it is too early to arrive at definite answers to these questions it is certainly time to offer informed conjectures and these are the focus of this paper this abstract was borrowed from another version of this item

viewpoint on the generalizability of lab behaviour to the field abstract we can think of no question more fundamental to experimental economics than understanding whether and under what circumstances laboratory results generalize to naturally occurring environments in this paper we extend levitt and list 2006 to the class of games in which financial payoffs and doing the right thing are not necessarily in conflict we argue that behaviour is crucially linked to not only the preferences of people but also the properties of the situation by doing so we are able to provide a road map of the psychological and economic properties of people and situations that might interfere with generalizability of laboratory result from a broad class of games

viewpoint soda taxes four questions economists need to address abstract the popularity of soda taxes as a public health policy has grown rapidly in the last few years while the evidence that the tax works in reducing the purchases of soda is emerging there are a number of questions that are yet to be answered before the broader effectiveness of this measure can be determined beyond health effects there is more specifically a need to better understand the economic mechanisms of change redistributive effects as well as causal and spillover effects in food systems and economy more broadly

aftermarket power and foremarket competition i revisit the issue of aftermarkets by developing an infinite period model with overlapping consumers if the aftermarket is characterized by constant returns to scale then social surplus and consumer surplus are invariant with respect to aftermarket power under increasing returns to scale however greater aftermarket power leads to greater concentration in the foremarket higher barriers to entry higher social surplus and possibly higher consumer surplus

the strength of direct ties evidence from the electronic game industry abstract we analyze the economic effects of a developer s connectedness in the electronic game industry knowledge spillovers between developers are likely to be of special relevance in this knowledge intensive and regionally concentrated industry we calculate social network measures for a developer s connectedness to other developers at multiple points in time in a regression in which we exploit within career variation in social network measures we find that the number of direct ties a developer has to other developers has a strong effect on both a game s revenues and critics scores the quality of indirect ties makes no additional contribution to the game s success

who pays cigarette taxes the impact of consumer price search abstract we conduct an empirical study of the impact of consumer price search on the shifting of cigarette excise taxes to consumer prices we use novel data on the prices that smokers report paying and document substantial price dispersion we find that cigarette taxes are shifted at lower rates to carton buyers and especially smokers who buy cartons of cigarettes in a state other than their state of residence we also find evidence that taxes are shifted at somewhat lower rates to the prices paid by heavier smokers and at somewhat higher rates to the prices paid by smokers of light cigarettes

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

by ounce or by calorie the differential effects of alternative sugar sweetened beverage tax strategies the obesity epidemic and excessive consumption of sugar sweetened beverages have led to proposals of economics based interventions to promote healthy eating in the united states targeted food and beverage taxes and subsidies are prominent examples of such potential intervention strategies this paper examines the differential effects of taxing sugar sweetened beverages by calories and by ounces on beverage demand to properly measure the extent of substitution and complementarity between beverage products we developed a fully modified distance metric model of differentiated product demand that endogenizes the cross price effects we illustrated the proposed methodology in a linear approximate almost ideal demand system although other flexible demand systems can also be used in the empirical application using supermarket scanner data the product level demand model consists of 178 beverage products with combined market share of over 90 the novel demand model outperformed the conventional distance metric model in non nested model comparison tests and in terms of the economic significance of model predictions in the fully modified model a calorie based beverage tax was estimated to cost 1 40 less in compensating variation than an ounce based tax per 3 500 beverage calories reduced this difference in welfare cost estimates between two tax strategies is more than three times as much as the difference estimated by the conventional distance metric model if applied to products purchased from all sources a 0 04 cent per kcal tax on sugar sweetened beverages is predicted to reduce annual per capita beverage intake by 5 800 kcal

designing a tax to discourage unhealthy food and beverage purchases the case of chile the global shift towards diets high in sugar sweetened beverages ssbs and energy dense ultra processed foods is linked to higher prevalence of obesity diabetes and most other noncommunicable diseases ncds causing significant health costs chile has the highest ssb consumption in the world very high junk food intake and very rapid increases in these poor components of the diet plus obesity prevalence this study s purpose is to compare the effect of different tax schemes for ssbs and ultra processed foods on nutrient availability utilizing price elasticities which are estimated from a quadratic almost ideal demand system model using the 2011 2012 income and expenditure survey we take into account the high proportion of households not purchasing various food and beverage groups censored nature of data the food groups considered were sweets and desserts salty snacks and chips meat products and fats fruits vegetables and seafood cereals and cereal products ssb ready to drink ssb from concentrate plain water coffee and tea and milk which together represent 90 of food expenditures the simulated taxes were 1 40 price tax on ssbs 22 above the current tax level 2 a 5 cents per gram of sugar tax on products with added sugar and 3 30 price tax on all foods 27 above current tax levels and beverages 12 above the current tax level exceeding thresholds on sodium saturated fat and added sugar and for which marketing is restricted based on a chilean law effective june 16 2016 unhealthy foods are price elastic 1 99 for salty snacks and chips 1 06 for ssbs ready to drink and 1 27 for ssbs from concentrate meaning that the change in consumption is proportionally larger with respect to a change in price results are robust to different model specification and consistent among different socioeconomic sub populations overall the tax on marketing controlled foods and beverages is associated with the largest reduction in household purchases of sodium added sugar saturated fat and calorie purchases chile is unique in currently having instituted a small current ssb tax as well as marketing controls and front of package labeling of unhealthy foods and beverages the design of a larger more comprehensive tax to enhance the overall effect of these policies on healthier diets is a next critical step this study shows that a large tax on the same foods and beverages already delineated as unhealthy by the marketing controls and front of pack labeling should prove to be more effective for promoting a healthier diet

determining the impact of food price and income changes on body weight we develop a theoretical model to identify conditions under which price and income changes are most likely to change weight although it is intuitive that raising the price of high calorie food will decrease consumption of such goods it is not clear that such an outcome will actually reduce weight our empirical analysis demonstrates a case where a tax on food away from home a food intake category blamed for much of the rise in obesity could lead to an increase in body weight a finding which emphasizes the need to employ economic modeling when developing public policy to reduce obesity

the effects of soft drink taxes on child and adolescent consumption and weight outcomes abstract childhood and adolescent obesity is associated with serious adverse lifetime health consequences and its prevalence has increased rapidly soft drink consumption has also expanded rapidly so much so that soft drinks are currently the largest single contributors to energy intake in this paper we investigate the potential for soft drink taxes to combat rising levels of child and adolescent obesity through a reduction in consumption our results based on state soft drink sales and excise tax information between 1989 and 2006 and the national health examination and nutrition survey suggest that soft drink taxation as currently practiced in the united states leads to a moderate reduction in soft drink consumption by children and adolescents however we show that this reduction in soda consumption is completely offset by increases in consumption of other high calorie drinks

rollover risk and market freezes the debt capacity of an asset is the maximum amount that can be borrowed using the asset as collateral we model a sudden collapse in the debt capacity of good collateral we assume short term debt that must be frequently rolled over a small transaction cost of selling collateral in the event of default and a small probability of meeting a buy to hold investor we then show that a small change in the asset s fundamental value can be associated with a catastrophic drop in the debt capacity the kind of market freeze observed during the crisis of 2007 to 2008 one of the many striking features of the crisis of 2007 to 2008 was the sudden freeze in the market for the rollover of short term debt from an in stitutional perspective the inability to borrow overnight against high quality but long term assets was a market failure that effectively led to the demise of a substantial part of investment banking in the united states more broadly it led to the collapse in the united states the united kingdom and other countries of banks and other financial institutions that had relied on signifi cant maturity mismatch between assets and liabilities and in particular on the rollover of short term wholesale debt in the asset backed commercial paper abcp and overnight sale and repurchase repo markets in this paper we are interested in developing a model of a sudden collapse in the ability to borrow short term against long lived assets in the absence of obvious problems of asymmetric information or fears about the value of col lateral we refer to this phenomenon as a market freeze more precisely a market freeze occurs when the debt capacity the maximum amount of collat eralized borrowing that can be supported by an asset is a small fraction of the fundamental value the economic value measured by the net present value npv of the stream of future returns an extreme form of a market freeze occurs when the fundamental value is close to the maximum possible value of the asset whereas the debt capacity is close to the minimum possible value of the asset

what do we learn about consumer demand patterns from micro data the aim of this paper is to assess the importance of using micro level data in the econometric analysis of consumer demand to do this we utilize a time series of repeated cross sections covering some 4 000 households in each of 15 years employing a number of different aggregation procedures we conclude that aggregate data alone are unlikely to produce reliable estimates of structural price and income coefficients however once certain aggregation factors as well as trend and seasonal components are included an aggregate model is not necessarily outperformed across all demand equations in terms of forecasting ability jel d12 c52 c31 the purpose of this paper is to develop a complete consumer demand system based on a time series of individual household data and to use it to measure the biases introduced into the study of consumer de mand behavior when aggregate data are used in place of the appropriate microeco nomic data we assess the suitability of ag gregate data through the impact on income and price elasticities and by evaluating the ability of both micro and aggregate based models to forecast aggregate consumer de mand the biases introduced by the use of aggregate data depend upon the way that household characteristics interact with in come and price effects and on departures of demand systems from linearity we explore the structure of microeconomic demand sys tems and the role of household characteris tics in the behavior of consumer demand both for the light this may shed on the pattern of future demands and for the im plications this behavior has for issues of aggregation consumer demand patterns typically found in micro data sets vary considerably across households with different household characteristics and with different levels of income we model this variability by making intercept and slope parameters in the budget share equations of our demand sys tem depend on household characteristics and by allowing for nonlinear total log expenditure terms in fact in theory consistent demand systems it is total ex penditure rather than disposable income that is allocated across goods we find that this general framework leads to a well specified data coherent demand system which is a quadratic extension of the popu lar almost ideal model of angus s deaton and john muellbauer 1980 the micro level estimates are shown to be sensitive to the treatment of endogeneity of total expen diture and to the specification of interaction terms with household characteristics in ad dition this specification is also shown to possess many attractive features for the evaluation of aggregate models

the impacts of inclusive and exclusive taxes on healthy eating an experimental study abstract based on a laboratory experiment conducted with 131 adults non students subjects we empirically examine the differential impacts of an inclusive and exclusive tax on changing consumers eating behavior we compare the caloric and nutrient content of the meals selected by the subjects using a difference in difference regression model to determine the efficacy of the policy treatments the results indicate that an inclusive tax has a significantly stronger effect on reducing the consumption of total calories calories from fat and the intake of carbohydrates cholesterol sugar and sodium compared with an exclusive tax