doi: 10.2307/restud/56.1.ipmid: N/A
Article PDF first page preview Close This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
Abel, Andrew, B.;Mankiw, N., Gregory;Summers, Lawrence, H.;Zeckhauser, Richard, J.
doi: 10.2307/2297746pmid: N/A
Abstract The issue of dynamic efficiency is central to analyses of capital accumulation and economic growth. Yet the question of what characteristics should be examined to determine whether actual economies are dynamically efficient is unresolved. This paper develops a criterion for determining whether an economy is dynamically efficient. The criterion, which holds for economies in which technological progress and population growth are stochastic, involves a comparison of the cash flows generated by capital with the level of investment. Its application to the United States economy and the economies of other major OECD nations suggests that they are dynamically efficient. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
Anderson, Simon, P.;, De Palma, André;Thisse,, Jacques-François
doi: 10.2307/2297747pmid: N/A
Abstract We propose a specific characteristics framework in order to construct linkages between alternative conceptual approaches to modelling product differentiation. First, it is shown that a demand system which satisfies the gross substitutes property imposes specific requirements on the locations of products. In particular, the dimension of the characteristics space must be larger than or equal to the number of products minus one. We then identify a method for casting a given demand system (subject to certain restrictions) into our characteristics framework. This is illustrated for the logit, probit and linear probability models of discrete choice theory. Finally, we find a characteristics representation of the CES representative consumer. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
Blundell, Richard, W.;Smith, Richard, J.
doi: 10.2307/2297748pmid: N/A
Abstract Estimation in a class of simultaneous equation limited dependent variable models is considered. The minimum Chi-squared method is used to compare the asymptotic relative efficiency of marginal and new conditional maximum likelihood estimators for this class of models. Efficient minimum Chi-squared estimation procedures are described. A two-step algorithm based on a conditional maximum likelihood estimator provides a natural framework for both computing a linearized and locating the joint maximum likelihood estimator. The unimodality of the simultaneous equation tobit likelihood function is proved and this model is used to illustrate the empirical application of some of the estimators considered in the paper. The relative efficiency of these estimators in the simultaneous equation tobit model is examined in a set of Monte-Carlo experiments. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
doi: 10.2307/2297749pmid: N/A
Abstract We study a union formation decision problem when workers consist of two groups distinguished by different productivities. Workers may form either a joint union or two separate unions. The whole decision process is modelled as an extensive-form bargaining game. Workers form a joint union when the sizes or productivities of the groups are similar. In the first case, there is a wage differential which is more (less) than proportional to the productivity difference if the size of the more productive is smaller (larger) than that of the less productive. In the second case, there is no wage differential. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
doi: 10.2307/2297750pmid: N/A
Abstract In a monetary model, it is shown that if there is a unique Pareto inefficient barter equilibrium, then a monetary equilibrium exists when traders are sufficiently patient. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
doi: 10.2307/2297751pmid: N/A
Abstract Agents expect to trade with each other infinitely often, but face a temporal absence of a coincidence of wants when they meet. Only loans and/or money can facilitate exchange. In small close-knit economies, enduring trade relationships are valued and loans are optimal. In larger economies, with limited communication, information concerning repayment of loans diffuses too slowly to deter agents from reneging unless loans are severely restricted in magnitude. Money has no such redeemability problems, but if Clower constraints bind, loans help supplement money purchases so that both become essential. Roles of various institutions and the historical evolution of media of exchange are explained. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
doi: 10.2307/2297752pmid: N/A
Abstract The paper studies an idealized gold standard in a two-country setting. Without flexible national domestic credit expansion (dce) policies which offset the effect of money demand shocks on international gold reserves, the gold standard collapses with certainty in finite time through a speculative selling attack against one of the currencies. Various policies for postponing a collapse are considered. When a responsive dce policy eliminates the danger of a run on a country's reserves, the exogenous shocks disturbing the system which previously were reflected in reserve flows, now show up in the behaviour of the public debt. Unless the primary (non-interest) government deficit is permitted to respond to these shocks, the public debt is likely to rise (or fall) to unsustainable levels. For the idealized gold standard analysed in the paper, viability can be achieved only through the active and flexible use of monetary and fiscal policy. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
doi: 10.2307/2297753pmid: N/A
Abstract The purpose of this paper is to explore the welfare properties of dynastic equilibria. There are three central findings. First, under relatively weak conditions, welfare optima cannot be implemented as dynastic equilibria with positive levels of transfers. Second, intergenerational altruism ordinarily renders the objectives of social planners dynamically inconsistent, thereby making implementation of welfare optima problematic. Third, if a planner successfully resolves dynamic inconsistency by committing himself to respect the preferences of deceased generations, and if there are a sufficient number of prior generations, then in a specific set of cases dynastic equilibria are approximately welfare optimal. This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
Cooper,, Russell;Riezman,, Raymond
doi: 10.2307/2297754pmid: N/A
Abstract This paper investigates the design of trade policies in an uncertain world. Governments in each of two countries select between direct quantity controls and subsidies in an attempt to shift profits in favour of domestic, imperfectly competitive firms. The equilibrium of this bilateral policy game depends critically on the variability of the environment. In a world of certainty, both governments would choose to regulate the behaviour of their firms through direct quantity controls. With a sufficient amount of uncertainty, both governments regulate their firms through subsidies. This result reflects an important tradeoff between the strategic advantages of direct quantity controls and flexibility gained by the use of subsidies This content is only available as a PDF. © 1989 The Review of Economic Studies Limited
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