Suchergebnisse

Defence date: 7 February 1998 ; Examining Board: Prof. Fabio Canova, Universitat Pompeu Fabra Barcelona, co-supervisor ; Prof. Tryphon Kollintzas, University of Athens ; Prof. Alfonso Novales, Universidad Complutense de Madrid ; Prof. Mark Salmon, EUI and City University London, Supervisor ; First made available online on 4 September 2018 ; Stochastic dynamic general equilibrium models have become in recent years the central paradigm for the analysis and understanding of macroeconomic fluctuations. As Gali (1995) puts it, though early applications to business cycle models (e.g., Kydland and Prescott (1982)) were generally restricted to model economies for which technology shocks were the only sources of fluctuations, and where built-in classical assumptions guaranteed the optimality of equilibrium allocations, the flexibility of that paradigm has been illustrated in a number of recent papers which have developed models of economies characterized by the presence of non-classical features (e.g., imperfect competition as in Rotemberg and Woodford (1991), Gali (1994) or Ubide (1995) and/or alternative sources of fluctuations (e.g., shocks to government spending as in Christiano and Eichenbaum (1992) or Baxter and King (1993)). These efforts to enrich the basic framework have been conducted with the objective of improving its empirical relevance and performance.

I discuss the role of economic theory in empirical work in development economics with special emphasis on general equilibrium and political economy considerations. I argue that economic theory plays (should play) a central role in formulating models, estimates of which can be used for counterfactual and policy analysis. I discuss why counterfactual analysis based on microdata that ignores general equilibrium and political economy issues may lead to misleading conclusions. I illustrate the main arguments using examples from recent work in development economics and political economy.

Morocco is currently about to start reducing industrial protection in the context of its association agreement with the European Union. However, agriculture, which represents the major income source for the disfavored rural population, is the sector that is most strongly protected. In this study, a general equilibrium model of Morocco is used as a laboratory for analyzing the short-run equilibrium effects of alternative scenarios for reduced protection for agriculture and industry. The model, which is calibrated to a Social Accounting Matrix for 1994, is distinguished by an explicit separation of activities, factors, and households into rural and urban. It has a detailed treatment of agricultural and other rural production, the labor market, and households (disaggregated into four types: rural poor, rural non-poor, urban poor, urban non-poor). The simulation results indicate that reduced agricultural protection would generate significant aggregate welfare gains at the same time a significant part of the disadvantaged rural population would lose strongly. The impact of industrial tariff cuts is small. The outcome is less unfavorable for rural households over a slightly longer time frame where labor migration between agriculture, the rest of the rural economy and urban areas is feasible. The results for simulations that introduce compensatory measures targeting the rural population suggest that the dilemma presented by the tradeoff between aggregate and rural welfare can be overcome: in simulations introducing trade liberalization together with government transfers to owners of rainfed agricultural resources, or moderate improvements in rural skill levels or productivity in rural non-agriculture, the gains from trade liberalization are shared relatively evenly among all household groups. ; Non-PR ; IFPRI1 ; TMD

This paper uses a Computable General Equilibrium (CGE) model to simulate the short-run effects of alternative food- subsidy scenarios. Savings from reduced subsidy spending are used to reduce direct taxes uniformly for all household types. The model uses a 1996/97 database with detailed household information. The simulated impact of targeting or eliminating oil and sugar subsidies is small: disaggregated real household consumption changes by ±0.3 percent. It is progressive if the subsidy is targeted to the needy (the bottom two quintiles in rural and urban areas) and regressive if it is eliminated. The targeting of all food subsidies is pro-needy, in part due to important indirect effects. It raises the consumption of the needy by 0.5 percent with, on average, little change for the nonneedy. The strongest gains are recorded for the rural needy (consumption increase by 1.0 percent). Food subsidy elimination is regressive: the needy suffer a consumption loss of 1.1 percent. If the government savings instead are transferred to the needy, the impact is reversed: consumption increases by 4.2 percent for needy households while the nonneedy register a small loss. The overall policy implication of the paper is that there is scope for reducing food subsidy spending without hurting the low-income groups. ; Non-PR ; IFPRI1 ; TMD

In this paper, we incorporate a positive theory of unemployment insurance into a dynamic overlapping generations model with search-matching frictions and on-the-job learning-by-doing. The model shows that societies populated by identical rational agents, but differing in the initial distribution of human capital across agents, may choose very different unemployment insurance levels in a politico-economic equilibrium. The interaction between the political decision about the level of the unemployment insurance and the optimal search behavior of the unemployed gives rise to a self-reinforcing mechanism which may generate multiple stady-state equillibria. In particular, a European-type steady-state with high unemployment, low employment turnover and high insurance can co-exist with an American-type steady-state with low unemployment, high employment turnover and low unemployment insurance. A calibrated version of the model features two distinct steady-state equilibria with unemployment levels and duration rates resembling those of the U.S. and Europe, respectively.

It is shown in this paper that the Median Voter Theorem lacks robustness in the sense that if voters have (even the slightest) preferences for the competing candidates, beside preferences for their current policy proposals, then no policy in the neighbourhood of the median voter's preferred policy constitutes an equilibrium (in pure strategies). This suggests that this classical theorem does not apply to representative democracy. Indeed, if voters do have candidate preferences, and these are strong enough, the policy-motivated candidates will, in general, adopt differing policy positions in equilibrium, and, under certain qualifications, the equilibrium outcome will be (close ti) a particular utilitarian optimum. More specifically, in a discretized model the policy outcome will lie between the preferred policy of the most popular candidate and this utilitarian optimum.

In this paper, we incorporate a positive theory of unemployment insurance into a dynamic overlapping generations model with search-matching frictions and on-the-job learning-by-doing. The model shows that societies populated by identical rational agents, but differing in the initial distribution of human capital across agents, may choose very different unemployment insurance levels in a politico-economic equilibrium. The interaction between the political decision about the level of the unemployment insurance and the optimal search behavior of the unemployed gives rise to a self-reinforcing mechanism whichmay generate multiple steady-state equilibria. In particular, a European-type steady-state with high unemployment, low employment turnover and high insurance can co-exist with an American-type steady-state with low unemployment, high employment turnover and low unemployment insurance. A calibrated version of the model features two distinct steady-state equilibria with unemployment levels and duration rates resembling those of the U.S. and Europe, respectively.

Since the late 1980s, Mexico has liberalized its agricultural sector, moving from a system of price supports, producer subsidies and consumer subsidies to a less distorting scheme in which market forces play a greater role. Coinciding with these agrarian and food policy reforms, the government has implemented the PROCAMPO system of direct payments to farmers. There is a general consensus that a direct payment program has the potential to be more efficient than a system of subsidies and supports. At the same time, there is widespread agreement that other policies need to be put in place to assure protection of the economically vulnerable segments of the population. Within this context, this paper uses a computable general equilibrium (CGE) model to analyze the regional, household and economy-wide effects of switching from the old system of price supports and subsidies to the new system of PROCAMPO payments. A CGE model of Mexico is constructed with four rural regions and one urban region and a high disaggregation of the agricultural and food sectors. It also includes 15 households, defined according to region and income level to permit a rich analysis of distribution effects. The initial experiment consists of removing the PROCAMPO payments from the base year (1996) and adding back the subsidy and support scheme as it existed in 1993, the year before PROCAMPO began. Then two policies are tested under an exchange rate depreciation to see how each policy regime reacts to adverse shocks. The simulations demonstrate that in a static situation, lump sum payments are preferred to the system of subsidies and price supports. In the event of a negative external shock, the simulations suggest that the old system performs better in terms of output and rural incomes. However, urban households are worse off, and their size in total population may make this an unattractive policy." ; Non-PR ; IFPRI1 ; TMD

We study the consequences and optimal design of bank deposit insurance in a general equilibrium model. The model involves two production sectors. One sector is financed by issuing bonds to risk–averse households. Firms in the other sector are monitored and financed by banks. Households fundbanks through deposits and equity. Deposits are explicitly insured by a deposit insurance fund. Any remaining shortfall is implicitly guaranteed by the government. The deposit insurance fund charges banks a premium per unit of deposits whereas the government finances any necessary bail-outs by lump-sum taxation of households. When the deposit insurance premium is actuarially fair or higher than actuarially fair, two types of equilibria emerge: One type of equilibria supports the socially optimal (Arrow–Debreu) allo-cation, and the other type does not. In the latter case, bank lending is too large relative to equity and the probability that the banking system collapses is positive. Next, we show that a judicious combination of deposit insuranceand reinsurance eliminates all non–optimal equilibrium allocations.

This paper reconsiders the theoretical foundations of EU regional policy in economics. It begins with a discussion of the line of thought of its prevalent explanation in equilibrium economics which is focusing on market failures as its key underpinning and which is the major toolkit of economists for policy recommendations in this context. Subsequently, this view is contrasted with a non-equilibrium economics perspective on EU regional policy. Based on this, the existence of market failures and the relevance of equilibrium economics for a realistic understanding of and policy advice for EU regional policy are called into question. That is why, a more substantive politico-economic explanation and different policy conclusions for the regional policy of the EU are offered. The paper particularly focuses on the implications of the latter for the European Economic and Monetary Union in light of the persisting financial crisis and the vast economic disparities existing within it. Finally, the non-equilibrium economics perspective on EU regional policy is also animadverted, since market failure thinking still prevails in this branch of economics undermining its own criticism of equilibrium economics.

This paper considers balanced-budget redistribution between socioeconomic groups of individuals as the outcome of electoral competition between two political parties. Equilibrium is unique in the present model, and a sufficient condition for existence is given, requiring that there be sufficient "stochastic heterogeneity" with respect to party preferences in the electorate. The validity of Hotelling's "principle of minimum differentiation", as well as of "Director's law", is examined under alternative hypotheses concerning administrative costs and voters' possibilities of "exit" adn "voice" in the election process. The policy strategy of expected-plurality maximization is contrasted with the strategy of maximizing the parobability of gaining a plurality. Incomes are fixed and known, so lump-sum taxation is feasible. However, constraints on tax/transfer differentitation between individuals are permitted in the analysis.

This Thesis examines the nature and intended role of Marshall's 'economic biology', and its relationship with his equilibrium theory. This examination is developed in the context of criticisms of modem equilibrium analysis and recent developments in evolutionary economics. Marshall's attraction to the 'speculations of biology' is linked to his journey from mathematics, philosophy and psychology to political economy, and an understanding of his perspective on economic methodology requires an appreciation of the development of his thinking in this setting. The ambiguities and recurrent qualifications found in Marshall's Principles are shown to emerge as a result of the struggle to reconcile equilibrium and evolutionary modes of thinking. The nature of Marshall's difficulties is also shown to have been fundamentally misunderstood and misrepresented by his followers and critics in the Marshallian costs controversies of the 1920s. and in much of the subsequent literature that considers Marshall's legacy. While Marshall is most often recognised as a leading pioneering equilibrium economist, it is shown that his published work instead pointed towards analysis that now forms the core of the contemporary cumulative causation and evolutionary economics literature. Importantly, an examination of the equilibrium approaches that have dominated mainstream economics subsequent to the debates of the 1920s reveals similar limitations to those that Marshall had struggled to overcome. It is argued that a 'resolution' to the conceptual and methodological conundrums that Marshall sought to resolve is best addressed through the adoption of Post Keynesian theory nested within modem evolutionary economics. Following this approach, theories of value and of growth and development can be re-united in a manner that fulfils Marshall's stated ambition and intuition.

Chapter 1: Using a novel combination of administrative and proprietary data from 2007 to 2011 on King County, WA (metro Seattle), I estimate the effect of owner-occupants' home equity on their probability of sale and, indirectly, mobility. I exploit plausibly exogenous variation that follows only from changes in local housing price indices, and I account for confounding economic conditions that vary by time and location. The estimates indicate that sales decline dramatically over the combined loan-to-value ratio range from approximately 70% to 100%, well before homeowners reach negative equity levels.Chapter 2: A known shortcoming of Burdett and Mortensen's celebrated result of pure equilibrium wage dispersion is that it hinges upon the assumption of random matching. This chapter presents a modified version of their model, in which pure equilibrium wage dispersion arises under a form of balanced matching. Rather than modeling workers and firms, the model addresses workers and jobs. Matching is assumed to be random with respect to jobs, which amounts to balanced matching with respect to firms, when firm size is measured in terms of jobs. The bizarre implication of random matching with firms, whereby splitting a firm in two increases its recruitment rate, is eliminated. In addition to increasing employment, speeding up recruitment and reducing worker turnover, higher wages in the modified model also reduce the rate of job vacancy.Chapter 3: I model the relationship between a central government and its tax-collecting proxies. The Old Kingdom was the first great age of Ancient Egypt, witnessing the construction of such wonders as the pyramids of Giza and the Sphinx. Its downfall was the culmination of a long process, whereby the balance of power gradually shifted from the royal court to an emerging provincial elite. I maintain that the process was born out of state policy: Incapable of perceiving the long-run dynamics governing the equilibrium division of resources between itself and its local proxies, the royal court set the economy on a divergent path that empowered the provincial elite at the state's expense. The underlying strategic interaction between the royal court and its proxies was present throughout the Old Kingdom period. Careful attention is paid to the question of which decisions should be modeled by optimizing behavior and which should not. The paper fills a gap in the literature by addressing why, in the short run, the royal court could not decrease the flow of state resources to the provincial elite.

This paper presents a "survey" of three unclear mathematical models dealing with economic choice, economic calculation and general economic equilibrium. These models together form the elements of a blurred value theory. The aim of this study is to verify the effectiveness of the application of the unclear subset theory to the analysis of the fundamentals of the economy and thus to legitimise his employment in this discipline. ; Ce papier présente un "survey" de trois modèles mathématiques flous traitant du choix économique, du calcul économique et de l'équilibre économique général. Ces modèles constituent ensemble les éléments d'une théorie de la valeur floue. Le but de cette étude est de vérifier l'efficacité de l'applicationde la théorie des sous-ensembles flous à l'analyse des fondements de l'économie et ainsi de légitimer son emploi dans cette discipline.

"April 1997." ; "United States Department of the Interior, Bureau of Land Management"--Cover. ; Includes bibliographical references (p. 22-23). ; Mode of access: Internet.