bluuebunny/crossref_metadata_2025 huggingface dataset:
Production and Reproduction
Authors: Folbre Nancy
Published: October 2023

Fear of contraception offered vivid illustration of the gendered double standard of self-interest. More profound evidence of the effect of patriarchal ideology on classical political economy lay in oversimplification of the relationship between production and reproduction. The two mechanisms emphasized by Malthus in his analysis of population growth—level of wages and age at marriage—represented a small subset of the factors affecting fertility decisions. Particularly significant were changes in the contribution of women and children to family income in the course of early capitalist development. None of the classical political economists recognized these changes, although they impinged directly on important policy issues, such as regulation of factory employment and reform of the poor laws.
Equal Opportunities
Authors: Folbre Nancy
Published: October 2023

The early French socialists, like their counterparts in Britain, clung to family values even as they rejected patriarchal norms. Prosper Enfantin—who called himself Father—published the announcement above in Black’s Morning Chronicle in April 1832, hoping to recruit English-speakers to his cause. Critiques of individualism flew back and forth across the channel. Anna Wheeler served as an important go-between and John Stuart Mill an occasional translator. The French socialists put greater emphasis than their British counterparts on the simple principle of equal opportunity. They imagined grand communitarian schemes with an exuberance that Americans found particularly attractive.
The Sacred Sphere
Authors: Folbre Nancy
Published: October 2023

Socialism and feminism were creative responses to destabilization of the traditional patriarchal order, but they were not particularly popular ones. Most people found it easier to reiterate the traditional moral division of labor and to condemn the indulgence of greed and lust everywhere except the masculine marketplace. Queen Victoria, who ruled the British Empire from 1837 to 1901, assumed a traditionally male prerogative but also encouraged the notion that women and men were essentially different. Victorian values encouraged separate spheres for men and women that reflected contrasts between selfishness and altruism, the market and the family. This social cosmology offered men the possibility of inhabiting both worlds, buying their cake and having it homemade for them, too. It created a sacred space in which traditional moral values remained exempt from the demands of economic rationality.
Beyond Economic Man
Authors: Folbre Nancy
Published: October 2023

At the 1990 meetings of the American Economics Association a group of dissident women formed a network that evolved into the International Association for Feminist Economics (IAFFE). European members organized a meeting in Amsterdam with the title “Out of the Margin” challenging the economic profession’s tendency to marginalize women and resist challenges to mainstream approaches. The title of an important collection of feminist economic essays published in 1993 also conveyed a message: Beyond Economic Man.
What is Money?
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

The definition of ‘money’ is a natural starting point for any comprehensive monograph or textbook on monetary theory and monetary policy. Unfortunately, although a myriad of books and articles have been written on these issues, the definition of money can still be regarded as an almost unresolved issue: If a principal purpose of definition is to bring ‘peace at mind’... monetary economics has failed us.
The Money Supply Process: Starting Point of the Transmission Process
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

The money supply process deals with the interface between the central bank and the commercial banks. At this point the indirect and complex processes of monetary policy transmission always start independently of the theories on the subsequent stages of this process, which are discussed in Chapter 4. It is, therefore, of crucial importance that the right starting point is chosen.
Monetary Policy Transmission
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

With the description of the money supply process, we have already made the first steps into the difficult area of monetary policy transmission. In this chapter the subsequent stages will be discussed. The main objective of all theories on monetary transmission is the analysis and description of the long, indirect, and complex relationship between monetary policy actions of a central bank (e.g. an increase in the repo rate) and their effect on the final targets of macroeconomic policy (e.g. the price level).
The Institutional Framework of Monetary Policy II: The Design of the Central Bank Legislation
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

The central bank constitution determines the incentive structure of central bankers. Given the long lags of monetary policy, it is important that the central bank constitution guarantees a long-term horizon of the central bank management. Such a ‘conservatism’ is generated by insulating monetary policy from the political process and by long terms of office for the members of a central bank’s decision making body.
The Conduct of Monetary Policy by the World’s Major Central Banks
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

It explains how central bankers in the world’s most important central banks have been able to reach the main targets of monetary policy. After the discussion of ‘simple rules’ in the last chapter, it is especially interesting to analyse the policy frameworks that were used by decision-makers in Germany Japan, the United Kingdom, and the United States.
Seigniorage and Inflation Tax
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

The concept of seigniorage plays an important role in monetary theory and policy. Although there are different definitions of seigniorage, they all try to capture the revenue that accrues to a government from the fact that it owns a national central bank.
Monetary Policy Strategies in an Open Economy
Authors: Bofinger Peter , Reischle Julian , Schachter Andrea
Published: October 2023

In Part II monetary policy was presented from the perspective of a closed economy. This final part of the book will show that in general it is useful for large currency areas (e.g. the United States, the euro area, Japan) to adopt such a closed-economy perspective for their overall monetary policy strategy. This implies above all that the short-term interest rate is determined only by domestic considerations, e.g. according to a Taylor rule. However, as the example of Japan has shown (Section 9.5), even for such large currency areas it is neither necessary nor advisable to adopt a policy of‘benign neglect’ vis-d-vis the exchange rate.
Plan and Market in China’s Agricultural Commerce
Authors: Sicular Terry
Published: October 2023

The change in leadership following the death of Mao Zedong brought with it a shift in accepted views about the role of markets in a socialist system. For much of the previous three decades, Chinese leaders believed that markets should play a minimal role. Instead, output should revert to the state, which would then arrange for its distribution. Domestic commercial policies reflected this view. A large proportion of trade was carried out through state channels in accordance with economic plans. Quotas governed the procurement of agricultural and industrial goods, and rationing or direct allocation governed their distribution. Procurement and distribution prices were set by the state.
The Nature of the Township-Village Enterprise
Authors: Chang Chun , “Wang Yijiang
Published: October 2023

In the past 15 years, the total output of the township-village enterprises (TVEs) in China has grown at an average rate of 30 per cent per annum. In 1993 TVEs produced about 40 per cent of the nation’s total industrial product and provided employment to 112 million people. Questions have been raised regarding the nature of township-village enterprises: Are they private firms or state-owned enterprises disguised under nominal collective ownership? How do they differ from producer cooperatives? What explains their ownership structure?
Public versus Private Ownership of Firms: evidence from rural China
Authors: Jin Hehui , Qjan Yingyi
Published: October 2023

In studying economies in transition from planned to market, no single issue has received more attention from economists and policymakers than the one of property rights and ownership of firms. In Eastern Europe and the former Soviet Union, one observes mass privatisation of old state-owned enterprises (SOEs) and the emergence of new private (including newly privatised) enterprises. In China, old SOEs also declined even without privatisation, and new private enterprises flourish. However, there is a puzzle concerning China’s successful Township-Village Enterprises (TVEs).
Towards a Labour Market in China
Authors: Knight john , Song Lina
Published: October 2023

In a sense, China does not yet have a ‘labour market’. The Chinese labour system, set up in the 1950s and based on the Soviet model, is characterised by state direction of labour, immobility, lack of incentives, overstaffing, and underemployment. On the other hand, it has avoided open unemployment and serious urban-isation problems, it has provided employees with security, and it has achieved egalitarian objectives. The Chinese government has begun a process of reform designed to improve the mobility, flexibility, incentives, and efficiency of labour. By comparison with other market reforms in China, however, labour market reform is tardy and limited.
Income and Inequality in China: composition, distribution and growth of household income, 1988 to 1995
Authors: Khan Azizur R ahman , Riskin Carl
Published: October 2023

The first comprehensive effort to estimate household income and its distribution in China according to standard international definitions was made for the year 1988 by an international group of economists working with members of the host institution, the Economics Institute of the Chinese Academy of Social Sciences (CASS). The sample survey designed by this team produced estimates of household income that were substantially different from those of the State Statistical Bureau (SSB), based on its annual surveys, with different implications for both the average standard of living and the degree of inequality of income distribution. The study found that per capita household income was both substantially higher and more unequally distributed than suggested by the SSB estimates. It also provided insights into sources of inequality in China that were unobtainable from the published official data on income and its distribution.
China’s WTO Membership: what’s at stake?
Authors: Ytmg Yongzheng
Published: October 2023

It is nearly ten years since China launched its campaign to enter the GATT/WTO. Although significant progress has been made, there are still key issues dividing China and its major developed economy trading partners. The sticking point is whether China should join the WTO as a developing or developed economy. China insists that its low per capita income warrants developing economy status, while developed economies, especially the United States, argue that China’s huge size means that it is not an ordinary developing economy, and that it should take the responsibility of a developed economy in its commitments to trade liberalisation. The impasse on this issue has stalled membership negotiations in the WTO.
China’s Integration into the World Economy
Authors: Garnaut Ross , Huang Yiping
Published: October 2023

China has roughly quadrupled its annual output of goods and services since 1978. Real growth has averaged 9 per cent, and foreign trade has grown substantially more rapidly (Figure 1). The accommodation of sustained, rapid, internationally oriented growth in China is one of the greatest challenges facing the world economy over the next decade. Success will increase the gains from trade, while failure will lead to corrosion of the open international system.
Rapid Economic Growth and Its Effects
Authors: Ishi Hiromitsu
Published: October 2023

Contrary to the gloomy prospects immediately following the end of the Second World War, the Japanese economy started its genuine economic growth from 1955, based upon a number of major socioeconomic reforms during the occupation period. In fact, it continued its rapid surge of economic growth until the early 1970s, with one of the highest rates compared to many of the advanced countries in the world. This growth pattern, which lasted for about two decades, attracted worldwide attention because it was practically unparalleled in history (see, for instance, Boltho 1975).
Structural Changes Towards a New Dimension
Authors: Ishi Hiromitsu
Published: October 2023

The Japanese economy, with its high rates of growth and overall stability, has attracted worldwide attention in the post-war period. In fact, Japan successfully caught up with the West by 1970 due to a sustained surge of rapid economic growth. It is, however, widely acknowledged that a new era has emerged for Japan since the early 1970s, particularly in the context of international relations.
How Financial Resources were Generated in a Growing Economy
Authors: Ishi Hiromitsu
Published: October 2023

One of the most remarkable features about Japan, seen from the rest of the world, was the unstoppable phenomenon of its rapid economic growth. This was true at least until the beginning of the 1990s. Obviously, the fiscal performance or behaviour of the government must have been substantially affected by this post-war economic growth. In general, government fiscal activity interacts with the workings of the economy in many ways; that is to say, fiscal policy changes influence the growth performance of the economy while at the same time fiscal performance tends to be determined by a nation’s economic growth.
Ageing and the Social Security System
Authors: Ishi Hiromitsu
Published: October 2023

The ageing structure of Japan’s population is moving sharply towards an aged society—one where the ratio of elderly people to non-elderly people is rising. No doubt, the process of societal ageing now under way will continue in the twenty-first century, and furthermore the speed of population ageing is considered to be faster in Japan than in any other developed country. Such a rapid ageing phenomenon must impose economic costs. In particular it will place a financial burden on all its members to support this aged-group through the expansion of the public pension system and medical and health care services. Generally speaking, the outcome looks profoundly pessimistic, because an aged society may lead to a proportionally reduced labour force, lower saving and growth rates, and higher levels of taxes or social security contributions. Obviously, the emergence of population ageing seems to generate a reduction in living standards and a social tension across all the generations.
Republicanism And Political Economy
Authors: Whatmore Richard
Published: October 2023

Jean-Baptiste Say’s intellectual career was divided by the Bourbon Restoration of 1814. Hitherto, Say had dedicated his life to the promotion of a form of republicanism that characterized one of the most important movements of the French Revolution: that of the Gironde faction as it developed between 1792 and 1793. Coming to prominence after the publication of the Traite d’economic politique in 1803, Say attempted in the book to describe a political economy supportive of the kind of republic he was committed to, adapted to the post-Terror circumstances of the Directory and the Consulate. If a republic was created in France, whose legislation embodied a republican creed adhered to by its citizens, he believed that the result would be the defeat of France’s arch-rival Britain, and the beginning of an era of happiness and prosperity across the globe.
The Republican Turn in France, 1776—1789
Authors: Whatmore Richard
Published: October 2023

In one of the letters Say received from Dupont de Nemours in 1815, physiocracy was described as the “science of liberty”. The most wide-ranging inference drawn by Dupont from this grand claim was that all of the beneficial effects of the French Revolution could be ascribed to Quesnay’s political economy Dupont had been propagating this belief since the early 1790s. In 1794 a letter to the editors of the revolutionary journal La Decade philosophique stated that Quesnay had “planted the tree of French liberty” which bore fruit in 1789.
Say’s Republicanism, 1794—1798
Authors: Whatmore Richard
Published: October 2023

In the aftermath of the Terror increasing numbers of emigres, ex-revolutionaries, and foreign polemicists were portraying the Revolution as a moribund project. French manners were perceived to be antithetical to republicanism, and endemic bloodshed the unavoidable consequence of their conflation.
Defending Republican Manners
Authors: Whatmore Richard
Published: October 2023

The Discours preliminaire of the Traite began with a radical and, to an observer of revolutionary politics, a breathtaking claim: that politics and political economy were distinct subjects with different concerns, laws, and objectives.
Rejecting the Post-War Settlement
Authors: Whatmore Richard
Published: October 2023

The end of Napoleon s control over France, after military defeat at Leipzig and a speedy abdication to Elba in April 1814, was a clarion call to many intellectuals to address the question “whither France?” It was universally accepted that there would be no return to 1799; the republic of letters created in the 1790s had been sliced in two by attitudes to the First Empire. Committed philosophes such as Roederer, Garnier, and Cabanis, took a decision to follow the imperial standard, and were amply rewarded for their change of face.1 The institutions of republican intellectual discourse were no more.
‘Social Science in its Entirety’
Authors: Whatmore Richard
Published: October 2023

Say’s writings between 1816 and 1822 underline an interest in North American society as a model for Europe, in the face of James Madison s contention that Say was exaggerating the republic’s assets.1 They also affirm a faith in the capacity of reason-induced virtue to create a society characterized by civil equality Furthermore, Say’s work makes clear an increasing scepticism about legislators, and the resulting need to present indisputable facts about social behaviour to the nation, so that the public good everyone shared would be gradually realized. Say’s confidence in his views was growing stronger, as evinced by a request to his students to dispute with him on any issue in political economy, in order to achieve the unity of opinion he believed to be essential to progress.2 The approval he anticipated was not forthcoming. Ricardo, Malthus, and Sismondi, between 1815 and 1821, attacked Say’s notion of utility as incapable of supporting a conception of the public good powerful enough to satisfy the diverse elements of a modern nation.
Conclusion
Authors: Whatmore Richard
Published: October 2023

In the preface to the sixth edition of the Traite d’economic politique published in 1838, Horace Say claimed that his father “had professed liberal doctrines’ from the time that “he fulfilled the role of Tribune’. This view was understandable in a country which had, in the mid-i Sjos, showed the first symptoms of a civil war between capital and labour, and which was facing anew the question of political legitimacy with the declining fortunes of the Orleans constitutional monarchy Nevertheless, it is a mistake. Along with contemporaries of every shade of political opinion, Jean-Baptiste Say used the term ‘liberal’ as an adjective and, in later life, as a noun. As I have argued earlier, using ‘liberal’ to signify a party grouping or philosophical standpoint makes no sense in France before the Restoration.1 Although he had more in common with Saint-Simon than Constant, and was closer to Charles Comte and Dunoyer than any other contemporaries, Say’s perspective was distinctive. It must be understood in the light of the failure of modern republicanism with the rise of Napoleon, and continuing reflection upon the nature and relevance to France of the British and American models of state and society.
Introduction
Authors: Messere Ken , Kam Flip de , Heady Christopher
Published: October 2023

The book is divided into three parts. Part I deals mostly with tax trends over the last fifty years, though reference is occasionally made to the first half of the twentieth century: it addresses in turn general tax trends, the dynamics of tax revenues, public sector developments, and tax aspects of fiscal federalism. Part II discusses various pol icy choices and the arguments for and against them in respect of all the main taxes. Part III summarizes the main tax policy decisions actually taken by OECD countries, with a focus on tax policy making in recent years. It also offers some views on what might be expected to happen in the near future.
Tax Aspects of Fiscal Federalism
Authors: Messere Ken , Kam Flip de , Heady Christopher
Published: October 2023

‘Fiscal federalism’ is the term currently used to cover the assignment of expenditure functions and revenue-raising powers to different levels of government. Though the present chapter is primarily concerned with tax issues, it is not possible to discuss them rationally without reference to some of the more general policy issues addressed by the fiscal federalism literature.
The Institutional Infrastructure of Competition Policy
Authors: Tirole Jban
Published: October 2023

Economists have long extolled the virtues of competition. Competition often lowers prices, enlarges product variety, and fosters innovation. It usually selects the most efficient producers. And it facilitates governance by letting daimholders benchmark their firm’s performance against that of its rivals and by threatening dormant managers with marginalization and bankruptcy. To be certain, the industrial organization literature focuses (rightly so) on the many imperfections of the competitive process, and serves as a healthy reminder to ideologues that competition is at best an instrument and not a goal per se. This literature, however, should not be used to vindicate anti-competitive policies; it should rather be a guide for designing corrections to an otherwise beneficial competitive environment.
Institutions and the orkings of the Labour Market
Authors: Nickell Stephen
Published: October 2023

Across the OECD economies there is a wide variety of labour-market institutions, some of which have changed significantly over time. Consequently we have a fair bit of information as to what works and what does not work, both with regard to employment or unemployment. and with regard to productivity. My purpose here is to summarize what we think we know and indicate the lessons that might be learned by the non-OECD world. Much of the evidence is taken from Nickell (1997) and Nickell and Layard (2000), where a vastly fuller discussion may be found. So we shall not burden this note with lots of references.
Safety Nets, Savings, and Informal Social Security Systems in Crisis-Prone Economies
Authors: Dercon Stefan
Published: October 2023

In the developing world orintransition economies, large economic fluctuations, climatic shocks, and natural disasters demand further development of support systems during crises. In this paper, we discuss the role played by self-insurance (via savings) in the presence of informal social security systems. We argue that better functioning asset markets and more attractive savings instruments for the poor could make self-insurance much more effective. Finally, publicly provided safety nets should take into account their crowding-out effects on informal risk-sharing or self-insurance. We argue that minimizing crowding-out may be difficult with standard safety nets such as targeted employment schemes. Asset market support to encourage group-based savings schemes may provide a useful alternative.
Energy Crisis versus Climate Change: Is there a Lesson to be Learned?
Authors: Olli Tahvonbn
Published: October 2023

The energy crisis that began in the early 1970s and ended around the mid-1980s was becoming nothing more than a bad dream when climatologists started the discussion on climate change. One major theme in the energy crisis was the threat of fast depletion of fossil energy resources, while the problem in climate change is that this material does not disappear after it is used in energy production. In spite of this difference, these two problems have many similarities. Both are related to global energy markets, natural resources, and economists’ ability to take environmental problems seriously while focusing on empirically relevant issues. My aim is to offer a brief comparison of the energy crisis and climate change discussion from the point of view of environmental economics.
Growth and External Debt: A New Perspective on the African and Latin American Tragedies
Authors: Cohen Daniel
Published: October 2023

This paper addresses two puzzles of the growth literature-namely. the failure of standard growth equation to account for Latin American and African slow growth; and the surprising failure of trade to explain growth whereas ‘trade liberalization’ appears to play a significant role. The paper shows (1) that African growth is readily explained by macroeconomic mismanagement and low investment; (2) that ‘trade liberalization’ should be taken as a proxy of such ‘macroeconomic’ good management: rather than a genuine measure of the effect of trade upon growth, and (3) that Latin American poor growth (which does not appear to be accounted by any of the preceding feature) is well explained by a variable (constructed in the text) that represents the likelihood of debt crisis.
The French Experience of Youth Employment Programmes and Payroll Tax Exemptions
Authors: Kramarz Francis
Published: October 2023

It may seem ironic for a French person to give opinions or advice on youth employment programmes and tax exemptions in view of the fact that the level of unemployment in France is over 11 per cent and around 25 percent among young workers. Of course, it is always difficult to resist the opportunity to give your views on the world. So, I seize this possibility with great pleasure. The outline of the chapter will be as follows. I will mostly give a summary of recent research by colleagues of mine or myself. I will start with the motivation for the discussion, then I will present the basic measures that constitute employment policy in France, in particular showing you the number of beneficiaries and levels of expenditure for the different programmes. Using recent research articles, I will try to assess the impact of these programmes on youth employment, as well as the impact of payroll tax exemptions on the employment of minimum wage workers. Finally, I will present some conclusions.
Will Japan’s Current Account Turn to Deficit?
Authors: Adams F Gerard , Gangnes Byron
Published: October 2023

Japan’s current account has been in surplus for many years. From a Japanese perspective, the surplus has provided market outlets for Japanese manufactures and high tech products and has been the basis for capital flows into foreign investment. From the perspective of other industrial countries, the surplus has represented a source of cheap foreign savings, but has also created political pressure through job losses in import-competing sectors.
Central Banking, Financial, and Regulatory Change in Japan
Authors: Cargill Thomas F
Published: October 2023

Japan’s central banking, financial, and regulatory institutions evolved slowly from the start of industrialization in the second half of the nineteenth century, reaching maturity in the 1950s. In the 1950s and 1960s they supported an impressive record of economic growth and macroeconomic stability that elevated Japan to the second largest economy in the world. Financial and monetary institutions began to change in the second half of the 1970s in response to new economic, political, and technological forces, both internal and external to Japan, calling for a more open, competitive, and internationalized financial system.
Has Japan Specialized in the Wrong Industries?
Authors: Wolff Edward N
Published: October 2023

Japan has slipped from being one of the fastest growing economies in the world to one of average growth. During the 1960s, labor productivity was growing at an average annual rate of 9 percent; in the 1990s, it was growing at only 3 per cent per year. Part of this slowdown reflects the transition from being a converging economy to a “frontier economy.” Indeed, most of Japan’s phenomenal productivity growth from 1960 to 1980 can be traced to technological catch-up combined with an extremely high investment rate (see Wolff, 1996).
Fertility Decline in Nepal
Authors: Collumbien Martine , Timaus Ian M , Acharya Laxmi
Published: October 2023

Secular reductions in fertility are now a well-established feature of the demography of South Asia. Fertility began to decrease in parts oflndia in the 1960s (Preston and Mari Bhat 1984; Rele 1987). By the late 1970s, a downward trend was apparent throughout nearly the entire country. In Bangladesh, the onset of fertility decline dates back to the end of the 1970s (Cleland et al. 1994). Moreover, while claims that fertility is falling in Pakistan have repeatedly been discredited (Retherford et al. 1987), detailed analysis of the most recent surveys suggests that some decline in fertility has now occurred (Juarez and Sathar, 2001).
The Effect of Micro-Credit Programmes on the Reproductive Behaviour of Women in Rural Areas of Bangladesh
Authors: Hadi Abdullahel , Nath Samir R , Chowdhury A M R
Published: October 2023

An extensive literature is now available on the social, economic and cultural deter minants of contraceptive use and fertility in developing countries (Dharmalingam and Morgan 1996; Koenig and Simmons 1992; Lapham and Simmons 1987; Schuler et al. 1997). However, evidence of the specific mechanisms and pathways through which societal and development factors influence reproductive behaviour is still limited (Koenig and Simmons 1992). Many studies examining the relationship between social and economic development and changing fertility aspirations still do not clearly demonstrate how women’s empowerment, which can depend on many factors and assume multiple dimensions, affects their reproductive behaviour (Mason 1995). Nevertheless, it is widely understood that the major keys to improve ments in women’s status are education and paid employment.
Son Preference in South Asia
Authors: Arnold Fred
Published: October 2023

The preference of parents for sons has been observed to be unusually strong in the South Asian region, as well as in East Asia, the Middle East and North Africa (Arnold 1997; United Nations 1985). Virtually every study in Bangladesh, India, Nepal, Pakistan and Sri Lanka (at both the national and local levels) has found son preference to be both pervasive and largely resistant to change. Sons are valued above daughters for their economic value in providing help on the family farm or in the family business, in providing security for their parents in old age, and in carry ing on the family line. In some South Asian cultures, other important reasons for wanting sons include the receipt of dowry payments at the time of marriage and the need for sons to perform certain religious duties. For example, according to Hindu tradition, sons are needed to light the funeral pyre when their deceased parents are cremated. By performing pind daan (making offerings to Brahmins and the poor), sons can also help in the salvation of their parents’ souls.
Approximate Common Knowledge in a Search Model
Authors: Shin Hyun Song
Published: October 2023

In a single-person decision problem, pay-offs are determined by one’s action and the state of the world. When a decision-maker receives a message which rules out some states of the world, this information can be utilized directly by disregarding these states in one’s deliberations. However, the same is not true in an environment where payoffs depend on the actions of other individuals, as well as the state of the world. Since my pay-off depends on your actions and your actions are motivated by your beliefs, I care about the range of possible beliefs you may hold. So, when I receive a message which rules out some states of the world, it may not be possible to disregard these states in my deliberations, since some of these states may carry information concerning your beliefs. Furthermore, your beliefs at these neighbouring states may depend on your beliefs concerning my beliefs at a further set of states. The reasoning does not stop here. Unless there is some feature of the framework which curtails this sequence of iterated beliefs, higher-order beliefs of all orders will be relevant for my decision now. In this way, states which are known not to have occurred may nevertheless exercise an influence on the equilibrium outcome due to such ‘infection’ of actions across the state space.
Wealth and Welfare
Authors: Dasgupta Partha
Published: October 2023

In a little-cited 1969 article, Jim Mirrlees explored the welfare significance of real national income in a timeless, optimizing economy. Real national income had previously been interpreted as a welfare measure, but only in the context of a full optimum (e.g. Lindahl 1934; Hicks 1940). Mirrlees (1969) studied a second-best economy, of the kind subsequently made famous by Diamond and Mirrlees (1971), one which is fully competitive, but where optimum lump-sum transfers are not feasible.
Non-linear Utility Pricing and Targeting the Poor
Authors: Kanbur Ravi , Tarkiainen Ritva , Tuomala Matti
Published: October 2023

With the accelerated move towards privatization of public utilities in developing countries, some old issues on public-utility pricing and the poor have re-emerged. Among the arguments for privatization are (a) increasing the efficiency of management by insulating it from political pressures on day operations (e.g. hiring and firing decisions) and (b) greater economic efficiency by linking pricing to costs through the profit motive. And yet there are sufficient concerns about the possible impact of untrammelled market forces in these sensitive sectors, particularly about the distributional impact of pricing decisions, that privatization under the framework of regulation and oversight is an attractive alternative to completely free markets. The sorts of regulations that might be considered are to do with broad guidelines on pricing structure, and on crosssubsidization across groups.
Decision-Making Under Uncertainty
Authors: Eichberger Jürgen , Harper Ian , Pfeil Christian , Scheid Florian
Published: October 2023

Exercises in this chapter illustrate the basic concepts of decision-making under uncertainty. They serve also to familiarize you with properties of the expected utility function and show how to apply the expected utility approach to a portfolio choice problem. Exercise 1 provides an example of how to construct ‘acts’, i.e. state contingent outcomes, and how acts, together with a probability distribution over states, induce ‘lotteries’ over outcomes. Example 2 uses the famous Allais paradox in order to demonstrate how one can construct new lotteries by compounding lotteries. Several ways to represent expected utility preferences in diagrams are illustrated in Exercise 3. The relationship between the expected utility approach and the meanvariance approach are explored in Exercise 4. Von Neumann-Morgenstern utility index functions representing constant absolute and relative risk aversion are the focus of Exercise 5. In Exercises 6 and 7 we analyse the same portfolio choice problem, first in the expected utility framework and then under the mean-variance approach.
Portfolio Choice
Authors: Eichberger Jürgen , Harper Ian , Pfeil Christian , Scheid Florian
Published: October 2023

The exercises in this chapter study an asset market system, first, as a pure asset exchange equilibrium and, second, as a mean-variance equilibrium. In its form as a mean-variance equilibrium, the important CAPM formula can be derived. For these results, one needs to manipulate the expected value and variance of a portfolio. It is important to distinguish these concepts from the expected value and the variance of a single asset.

Exercise 1 studies a simple economy with two consumers and two states of the world. Consumers have constant relative risk aversion of 1. Two systems of asset markets are considered: (i) state-contingent contracts and (ii) assets with arbitrary pay-offs. The exercise shows that both market systems can achieve efficient allocations. Exercise 2 shows that convex combinations of portfolios generate new portfolios. For the special case of two assets, of which one is riskless, we derive the curve of the mean-variance combinations of portfolios.
Deposit Contracts and Banking
Authors: Eichberger Jürgen , Harper Ian , Pfeil Christian , Scheid Florian
Published: October 2023

In this chapter, we study an economy with long-term illiquid assets and short-term liquid assets. In this world, we consider consumers with unknown liquidity needs. Liquidity needs of the consumers are their private knowledge. Hence contracts can be dependent on the liquidity needs of a consumer only if they respect these information constraints. A bank deposit contract can constitute an optimal contract subject to these information constraints.

Exercise 1 studies the choices open to a consumer if there is no deposit contract available. In Exercise 2 a bank investment policy is given and feasible withdrawals are studied. Exercise 3 raises a number of questions relating to the bank model with intermediate information about the success of the long-term investment.
Modern Irish Republicanism and the Belfast Agreement: Chickens Coming Home to Roost, or Turkeys Celebrating Christmas?
Authors: McIntyre Anthony
Published: October 2023

The peace process in the North of Ireland has occasioned considerable debate as to whether or not Provisional republicanism has undergone a major transformation. While some unionists may reassure themselves with a rhetorical question—’Why do Martin McGuinness and Bairbre de Brun maintain the illusion that they are inheritors of Sean Russell’s Irish Republic rather than Ministers of the British Crown?’—there has clearly been a deep unionist mistrust of republican motives. John Taylor, the deputy leader of the Ulster Unionist party, for instance has claimed that republicans were never sincere about the peace accord. On the other hand Danny Morrison, the former Sinn Féin publicity director, has been effusive in his praise for the ‘peacemakers’ in the republican leadership.
Paths toward Redemocratization: Theoretical and Comparative Considerations
Authors: Stepan Alfred
Published: October 2023

In the course of our three conferences on redemocratization, the editors and I decided it would be useful to attempt to characterize in a systematic (but not ahistorical) manner the major alternative coalitional and institutional paths to redemocratization. What follows is a deliberate effort to use abstract analysis to highlight the political and policy implications of each path, taken by itself. We are of course painfully aware that no path to redemocratization is ever “taken by itself.” However, in our efforts to arrive at new synthetic interpretations of redemocratization as an integrated process, we want to avoid undertheorizing the question of the radically different paths available for redemocratization in the modem world and the fact that each path entails a predictable set of possibilities, problems, and constraints.
Arbitrage Chains
Authors: Dow James , Gorton Gary
Published: October 2023

The efficiency of security prices depends upon arbitrage, that is, trading based upon knowledge that the price of an asset is different from its fundamental value. (Although the term ‘arbitrage,’ strictly speaking, refers to an entirely riskless speculation, we use the term in the broader sense common among practitioners.) For example, suppose an agent has private information about a high future dividend to be paid by a firm. If the current stock price does not reflect this information, then the agent can profit by buying the stock, if his purchase does not instantly raise the price, and holding it until the dividend is paid.
Asset Prices and Trading Volume in a Beauty Contest
Authors: Biais Bruno , Bossaerts Peter
Published: October 2023

Consider an asset market where investors have different private valuations for an asset. For example, in the art market, different persons have different tastes for a given painting. These differences may generate speculation in the sense of Harrison and Kreps (1978, p. 323).
Why Do Companies Go Public? An Empirical Analysis
Authors: Pagano Marco , Panetta Fabio , Zingales Luigi
Published: October 2023

The decision to go public is one of the most important and least studied questions in corporate finance. Most corporate finance textbooks limit themselves to describing the institutional aspects of this decision, providing only a few remarks on its motivation. The conventional wisdom is that going public is simply a stage in the growth of a company. Although there is some truth in it, this ‘theory’ alone cannot explain the observed pattern of listings. Even in developed capital markets like the United States, some large companies—such as United Parcel Service or Bechtel—are not public.1 In other countries, like Germany and Italy, publicly traded companies are the exceptions rather than the rule, and quite a few private companies are much larger than the average publicly traded company. These cross-sectional and cross-country differences indicate that going public is not a stage that all companies eventually reach, but is a choice.
Financial System Architecture
Authors: Boot Arnoud W A , Thakor Anjan V
Published: October 2023

A primary function of the financial system is to facilitate the transfer of resources from savers (‘surplus units’) to those who need funds (‘deficit units’). In a well designed financial system, resources are efficiently allocated. The question we address is, what is the configuration of such a financial system? In particular, we examine why bank lending and capital market financing coexist and the factors—such as regulation and the stage of economic development—that determine which dominates.
Optimal Debt Structure and the Number of Creditors
Authors: Bolton Patrick , Scharfstein David S
Published: October 2023

Much of corporate finance theory is devoted to understanding the trade-off between debt and equity financing. Yet it is striking that firms almost always resolve this trade-off by choosing debt over equity. From 1946 to 1987, debt issues accounted for 85 percent of all external financing and equity only 7 percent. Thus if one wants a theory of the composition of external financing, it may be more important to understand the structure of debt financing than the choice between debt and equity.
Information Sharing in Credit Markets
Authors: Pagano Marco , Jappelli Tullio
Published: October 2023

A large body of literature on credit markets has shown that asymmetric information may prevent the efficient allocation of lending, leading to credit rationing (e.g., Jaffee and Russell (1976), Stiglitz and Weiss (1981)) or to a wedge between lending and borrowing rates (e.g., King (1986)). In this literature informational asymmetries are taken to be exogenous: lenders fail to observe some relevant characteristic or action of potential borrowers and have no way of learning about it. In some countries, however, lenders can improve their knowledge about new customers by exchanging information with other lenders through information brokers, generally known as ‘credit bureaus.’ The latter collect, file, and distribute the information voluntarily supplied by their members, and operate on the principle of reciprocity: lenders who do not provide data are denied access to the bureau’s files. In other countries, instead, these institutions do not exist.
Education and Literacy
Authors: Kingdon Geeta , Cassen Robert , McNay Kirsty , Visaria Leela
Published: October 2023

The case for education requires little elaboration. Apart from its obvious intrinsic worth, education has powerful instrumental value, both in terms of increased individual productivity and in terms of the considerable social benefits of education such as lower fertility and child mortality. Moreover, literacy is an essential tool of self-defence, participation, and empowerment in a modern society (Drèze and Sen 2002). Thus, the centrality of education—at least of basic education—in bringing about eco-nomic and social change, is clear.
The Condition of the People
Authors: Cassen Robert , McNay Kirsty
Published: October 2023

This chapter assesses the effects India’s development has had and will have on the quality of life of its people. Naturally there is some concentration on the way population growth has influenced these aspects of development; but it can be said at the outset that while population has been a factor in the unsatisfactory progress India has experienced in human welfare, it is only one among many, and not by any means a dominant one. One of the most pervasive findings of all our research is the large and in some cases growing inequalities in India, in several dimensions, and the threat that these will worsen. If one looks across India’s main states, one sees signifi-cant and sometimes widening discrepancies in income poverty and other social indicators, in demographic characteristics, and in economic growth. These discrepancies are reinforced by the situation of population groups: there is clear discrimination by gender, by caste and tribe, and by other groupings.
Modelling the Environment: The Production and Use of Energy
Authors: Anderson Dennis
Published: October 2023

By reference to the technologies and practices for the prevention and control of environmental damage, this chapter seeks to show why India may aspire to a greatly improved environment and a higher rate of economic growth. In fact, on account of the economic benefits of environmental improvement, which are likely to exceed the costs by an appreciable margin, India’s economic prospects would be improved. This conclusion is supported through an in-depth analysis of the economic and environmental problems arising from energy production and use, and evidence which shows that energy is not a special case.
Water
Authors: Vira Bhaskar , Iyer Ramaswamy , Cassen Robert
Published: October 2023

A particularly powerful impact of population growth is likely to be on future demand for water, because of the strong link between food demand and population numbers, and the fact that agriculture takes a very large share of India’s water supplies. However, a number of factors mediate the influence of population growth on resource availability and environmental quality. An important question is to try and assess how rising demand is going to be met. To answer the question, we have to look first at the overall supply of water and the factors affecting its availability and quality, the existing pattern of demand, and the factors that are likely to influence future water demand over the medium term. This chapter attempts to do just that.