The option clause is a contractual device from free banking experiences meant to prevent banknote redemption duels. It has been used within the Diamond and Dybvig (J Pol Econ 91: 401–419, 1983) framew
We study an infinite horizon economy with a representative agent whose utility function includes consumption, real balances and leisure. Real balances enter the utility function pre-multiplied by a parameter reflecting the inverse of the degree of financial market imperfection, i.e. the inverse of the transaction costs justifying a positively valued fiat money. Indeterminacy arises both through a transcritical and a flip bifurcation: somewhat paradoxically, the amplitude of the indeterminacy region improves as soon as the degree of market imperfection is set lower and lower. Such results are robust with respect to the choice for the elasticity of the labor supply, both when the latter is set close to zero and to infinite. We also provide conditions for the existence, uniqueness and multiplicity of the steady states and finally, we asses the impact of the degree of market imperfection on the occurrence of such phenomena
During the last third of the twentieth century, political philosophers actively debated about the content of distributive justice; the ruling ethical view of utilitarianism was challenged by various versions of equality of opportunities. Economists formulated several ways of modeling these ideas, focusing upon how individuals are placed with respect to opportunities for achieving various outcomes, and what compensation is due to individuals with truncated opportunities. After presenting a review of the main philosophical ideas (section 2), we turn to economic models (sections 3 and 4). We propose a reformulation of the definition of economic development, replacing the utilitarian measure of GDP per capita with a measure of the degree to which opportunities for income acquisition in a nation have been equalized. Finally, we discuss issues that the econometrician faces in measuring inequality of opportunity, briefly review the empirical literature (section 6), and conclude (section 7).
Rainwater harvesting, consisting in collecting runoff from precipitation, has been widely developed to stop groundwater declines and even raise water tables. However, this expected environmental effect is not self-evident. We show in a simple setting that the success of this conjunctive use depends on whether the runoff rate is above a threshold value. Moreover, the bigger the storage capacity, the higher the runoff rate must be to obtain an environmentally efficient system. We also extend the model to include other hydrological parameters and ecological damages, which respectively increase and decrease the environmental efficiency of rainwater harvesting.
Earnings are the product of wages and hours of work; hence, the dispersion of hours can magnify or dampen a given distribution of wages. This paper examines how earnings inequality is affected by the dispersion of working hours using data for the USA, the UK, Germany, and France over the period 1989–2012. We find that hours dispersion can account for over a third of earnings inequality in some countries and that its contribution has been growing over time. We interpret the expansion in hours inequality in European countries as being the result of weaker union power that led to less successful bargaining concerning working hours.
We introduce two tests for the constancy of conditional correlations of unknown functional form in multivariate GARCH models. The first test is based on artificial neural networks and the second on a Taylor expansion of each unknown conditional correlation. They can be seen as general misspecification tests for a large set of multivariate GARCH-type models. We investigate their size and their power through Monte Carlo experiments. Moreover, we study the robustness of these tests to nonnormality by simulating some models, such as the GARCH - t and Beta - t - EGARCH. We give some illustrative empirical examples based on financial data. JEL: C22, C45, C58 / KEY WORDS: Multivariate GARCH, Neural Network, Taylor Expansion. RÉSUMÉ. Nous introduisons deux tests de constance des corrélations conditionnelles de forme fonctionnelle inconnue dans les modèles GARCH multivariés. Le premier test est basé sur les réseaux de neurones artificiels et le second sur un développement de Taylor de chaque corrélation conditionnelle inconnue. Ces tests peuvent ětre considérés comme des tests généraux de mauvaise spécification pour un grand nombre de modèles multivariés de type GARCH. Nous étudions leur taille et leur puissance par des expériences de Monte-Carlo. De plus, nous nous intéressons à la robustesse de ces tests à la non normalité en simulant certains modèles comme les modèles GARCH-t et beta-t-EGARCH. Nous donnons enfin quelques exemples empiriques illustratifs sur données financières.
Public decision-makers commonly use health impact assessments (HIA) to quantify the impacts of various regulation policies. However, standard HIAs do not consider that chronic diseases (CDs) can be both caused and exacerbated by a common factor, and generally focus on exacerbations. As an illustration, exposure to near road traffic-related pollution (NRTP) may affect the onset of CDs, and general ambient or urban background air pollution (BP) may exacerbate these CDs. We propose a comprehensive HIA that explicitly accounts for both the acute effects and the long-term effects, making it possible to compute the overall burden of disease attributable to air pollution. A case study applies the two HIA methods to two CDs—asthma in children and coronary heart disease (CHD) in adults over 65—for ten European cities, totaling 1.89 million 0–17-year-old children and 1.85 million adults aged 65 and over. We compare the current health effects with those that might, hypothetically, be obtained if exposure to NRTP was equally low for those living close to busy roads as it is for those living farther away, and if annual mean concentrations of both PM10 and NO2—taken as markers of general urban air pollution—were no higher than 20 μg/m3. Returning an assessment of € 0.55 million (95 % CI 0–0.95), the HIA based on acute effects alone accounts for only about 6.2 % of the annual hospitalization burden computed with the comprehensive method [€ 8.81 million (95 % CI 3–14.4)], and for about 0.15 % of the overall economic burden of air pollution-related CDs [€ 370 million (95 % CI 106–592)]. Morbidity effects thus impact the health system more directly and strongly than previously believed. These findings may clarify the full extent of benefits from any public health or environmental policy involving CDs due to and exacerbated by a common factor.
La réception de la pensée de Friedrich Hayek au Japon dépend naturellement de caractéristiques propres à l’histoire de la modernisation dans ce pays, à partir de la seconde moitié du xixe siècle. Le contexte géographique et culturel est-asiatique, les clichés attachés au Japon peuvent conduire à s’étonner du succès de la pensée de l’auteur représentant d’une forme de « néolibéralisme ». Mais des traits épistémologiques et philosophiques, dont la démonstration est proposée ici, rendent compte de ce fait frappant. Au pays de la vie organisée en groupes à tous niveaux, l’impact fut considérable des idées du théoricien de l’individualisme méthodologique, militant du libre-échange et héritier sans doute le plus fameux de l’école économique autrichienne. L’écho de la pensée du fondateur de l’école, Carl Menger (1840-1921) dont les archives sont en partie conservées au Japon s’y fait également entendre. Un pan de théorie économique du libéralisme au xxe siècle a ainsi rencontré, loin de sa base d’origine, une réception attentive au pays du Soleil levant.
The 2008 financial crisis put an end to an era of sustained economic growth in Europe. The size of the shock differed across European countries and affected economies in different ways. Yet despite this heterogeneity, most European countries suffered a prolonged period of economic slowdown which raised concerns about the risk of a secular stagnation in Europe. This book focuses on labour productivity in Europe, one of the main drivers of growth and prosperity. Although productivity trends became the focus of policy interest in the immediate aftermath of the recession in the UK, 'productivity puzzles' received much less attention in the rest of Europe. These 'puzzles', which are apparent to greater or lesser extents in most European economies, centre on the marked decline in labour productivity growth which occurred with the on-set of recession. They are puzzles because, in neo-classical economics, firms respond to demand shocks by laying off workers, thus maintaining labour productivity and limiting growth in unit labour costs. Yet this didn't happen in this recession - at least, not to the same extent as in previous recessions, except in Spain. This book brings together contributions from leading European economists who analyse production models and macroeconomic policies, with specific focus on European countries that represent around 60% of the EU GDP. Chapters on France, Germany, the UK, and Spain provide new evidences at the firm/workplace level, and stress the role of transitory labour market mechanisms Contributors to this volume - Dan Andrews, OECD Philippe Askenazy, CNRS- Paris School of Economics and Ecole Normale Superieure Lutz Bellmann, University of Erlangen-Nuremberg Tito Boeri, INPS Alex Bryson, UCL Martin Chevalier, INSEE Nicholas Crafts, University of Warwick Eva Moreno-Galbis, University of Maine Hans-Dieter Gerner, University of Applied Sciences Koblenz Christine Erhel, University Paris 1 Pantheon-Sorbonne John Forth, National Institute of Econom
We present a set of theoretical and empirical papers and briefly describe the specific contributions to the Macroeconomic Dynamics special issue on technology aspects in the process of development.