A hump-shaped transitional growth path as a general pattern in long-run development

Long-run development is defined as the income transition between the traditional and the modern steady state, in which the speed of the transition is low near the two steady states but high and volatile in between them. This transition implies a hump-shaped relation between the level of per capita income and its growth rate. A hump-shaped growth-income path can be simulated with a two-sector growth model, in which the traditional sector is gradually replaced by the modern sector. Kernel regressions reveal a noisy but robust hump-shaped relation between the growth rate and the level of per capita income in stacked cross-country panel data.     

IMF Conditionality and Objections: The Russian Case

Emerging economies in crisis typically request assistance from the International Monetary Fund (IMF). After evaluating the situation, the IMF makes a loan available to the country, conditional on certain policy reforms. Governments usually resist many of these measures and negotiation ensues. This paper analyzes the most contentious measures of IMF conditionality in the context of Russia after the August 1998 crisis. The most discussed measures include the budget deficit, structural reforms, and exchange rate policy. Our analysis suggests that to some extent the disagreement arose because the IMF is focused on changing steady states somewhat ignoring the transition path, while the Russian government is preoccupied with transitional dynamics without a clearly defined steady state concept.     

Optimal interest rate stabilization in a basic sticky-price model

This paper studies optimal monetary policy with the nominal interest rate as the single policy instrument. Firms set prices in a staggered way without indexation and real money balances contribute separately to households’ utility. The optimal deterministic steady state under commitment is the Friedman rule—even if the importance assigned to the utility of money is small relative to consumption and leisure. We approximate the model around the optimal steady state as the long-run policy target. Optimal monetary policy is characterized by stabilization of the nominal interest rate instead of inflation stabilization as the predominant principle.     

Capital utilization, economic growth and convergence

Optimal decisions by economic agents regarding the utilization of capital lead to empirically plausible speeds of convergence in one-sector models of economic growth. The relationship between depreciation and capital utilization plays a crucial role in slowing down convergence to the steady state. Cross-country differences in the extent to which the capital utilization decision is internalized along the transition path may lead to differences in convergence rates, even for countries with similar initial and terminal conditions. Finally, by assuming a constant depreciation rate and full capital utilization, standard growth models may be overstating the magnitude of the steady-state equilibrium.     

A dynamic mobility model of individuals between jurisdictions in a system of local governments

This paper presents a dynamic mobility model in which individuals find incentives to move from one jurisdiction to another when they can enjoy a higher utility level by doing so, and inquires about welfare implications of the final outcome of such dynamic paths. The main conclusions are summarized as follows: (i) The mobility process of individuals is globally stable in the sense that the dynamic paths converge to the steady state equilibrium as time tends to infinity. (ii) There is a possible conflict between the principles of horizontal equity and Pareto optimality in the steady state of the dynamic system.     

Ramsey equilibrium with liberal borrowing

This paper considers a multi-agent one-sector Ramsey equilibrium growth model with borrowing constraints. The extreme borrowing constraint used in the classical version of the model, surveyed in Becker (2006), and the limited form of borrowing constraint examined in Borissov and Dubey (2015) are relaxed to allow more liberal borrowing by the households. A perfect foresight equilibrium is shown to exist in this economy. We describe the steady state equilibria for the liberal borrowing regime and show that as the borrowing regime is progressively liberalized, the steady state wealth inequality increases. Unlike the case of a limited borrowing regime, an equilibrium path need not converge in the case of liberal borrowing regime. We show through an example that a two period cyclic equilibrium exists when agents are allowed to borrow against their two period future wage income. This result is similar to the possibility of non-convergent equilibrium capital stock sequences in the model with no borrowing.     

Indeterminacy and nonlinear dynamics in an OLG growth model with endogenous labour supply and inherited tastes

This study analyses the dynamics of a two-dimensional overlapping generations economy with endogenous labour supply à la Reichlin (J Econ Theory 40(1):89–102, 1986) and aspirations. We show that the degree of nonlinearity of consumption externality in individual utility is responsible for the existence of either one steady state or two steady states. In addition, some interesting global dynamic properties, such as cyclical behaviour and/or global indeterminacy, emerge depending on the relative importance of aspirations in utility.     

The implications of inflation in an estimated new Keynesian model

This paper studies the steady state and dynamic consequences of inflation in an estimated dynamic stochastic general equilibrium model of the U.S. economy. It is found that 10 percentage points of inflation entail a steady state welfare cost as high as 13% of annual consumption. This large cost is mainly driven by staggered price contracts and price indexation. The transition from high to low inflation inflicts a welfare loss equivalent to 0.53% of annual consumption. The role of nominal/real frictions as well as that of parameter uncertainty is also addressed.     

某市卷烟物流配送中心收货入库环节可靠性研究

本文利用可修复系统的可用度分析方法对该物流系统的收货入库环节进行可靠性分析,提出了一种基于Markov过程的离散系统可靠性模型,对Markov状态转移方程进行求解,从而得出了求解该系统稳态有效度和故障率的计算公式。通过计算对该系统的可靠性进行了评价。     

Global indeterminacy and equilibrium selection in a model with depletion of non-renewable resources

We use the principles of global bifurcation analysis to explore the role of fiscal policy in a model where non-renewable depletion presents stock effects. Initially, we show that fiscal policy may induce the onset of two coexisting steady states, one of which is characterized by a lower depletion rate and higher income (virtuous steady state) than the other (bad steady state). Then, we shed light on the ability of an endogenous fiscal policy to act as an equilibrium selection device. We find that when the economy is sufficiently patient and exhibits low capital returns and environmental parameters, fiscal policy can create a continuum of equilibria that leads to the virtuous steady state. In the opposite situation of an impatient economy, which has high capital returns and environmental parameters, fiscal policy can only create one perfect-foresight path (a heteroclinic trajectory) through which the economy can approach the virtuous steady state.     

A two sector endogenous growth model with habit formation

In this paper, we study an endogenous growth model with physical and human capital in which consumption habits enter the utility function multiplicatively. We show that although the utility function with multiplicative habits is nonconcave and unbounded, an interior optimal growth path still exists, it is uniquely determined and it converges to a balanced growth path. We also find that habit formation in consumption lowers the convergence speed of the optimal path toward the balanced growth path.     

Threshold preferences and the environment

In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality. Thus, we endogenize the semi-elasticity of utility based on a step function. We find that for low (high) thresholds, environmental quality converges to a low (high) steady state. For intermediate levels it converges to a stable p-cycle, with environmental quality being asymptotically bounded below and above by the low and high steady state. As policy implications we study shifts in the threshold. Costless shifts of the threshold are always worthwhile. If it is costly to change the threshold, then it is worthwhile to change the threshold if the threshold originally was sufficiently low. Lump-sum taxes lead to a development trap and a proportional income tax should be preferred.     

Transition time paths for overlapping-generations models

This paper examines the transition stages between steady states for an overlapping-generations growth model. Our procedure is based on eigenvalues and eigenvectors. For marginal parameter changes, we can generate exact ‘multipliers’ for the responses of state variables in each time period. Our solution technique is direct (rather than iterative), it yields an intermediate-stage test of stability, and it clearly reveals the need to interpret initial conditions carefully. We work several illustrative examples numerically.     

Consumption paths under prospect utility in an optimal growth model

This paper studies the Cass-Koopmans-Ramsey model of optimal economic growth in the presence of loss aversion and habit formation. The representative agent's preferences for consumption can be gradually varied between the standard constant intertemporal elasticity of substitution (CIES) case and Kahneman and Tversky's prospect utility. We find that the transitional dynamics of optimal consumption paths differ distinctly from the standard model, in particular consumption smoothing is more pronounced. We also show that prospect utility can cause the economy to remain in a steady state with low consumption and low capital.     

Wage bargaining,productivity growth and long-run industry structure

This paper studies the innovation dynamics of an oligopolistic industry. The firms compete not only in the output market but also by engaging in productivity enhancing innovations to reduce labor costs. Rent sharing may generate productivity dependent wage differentials. Productivity growth creates intertemporal spillover effects, which affect the incentives for innovation at subsequent dates. Over time the industry equilibrium approaches a steady state. The paper characterizes the evolution of the industry's innovation behavior and its market structure on the adjustment path.     

Asset price and wealth dynamics in a financial market with heterogeneous agents

This paper considers a discrete-time model of a financial market with one risky asset and one risk-free asset, where the asset price and wealth dynamics are determined by the interaction of two groups of agents, fundamentalists and chartists. In each period each group allocates its wealth between the risky asset and the safe asset according to myopic expected utility maximization, but the two groups have heterogeneous beliefs about the price change over the next period: the chartists are trend extrapolators, while the fundamentalists expect that the price will return to the fundamental. We assume that investors’ optimal demand for the risky asset depends on wealth, as a result of CRRA utility. A market maker is assumed to adjust the market price at the end of each trading period, based on excess demand and on changes of the underlying reference price. The model results in a nonlinear discrete-time dynamical system, with growing price and wealth processes, but it is reduced to a stationary system in terms of asset returns and wealth shares of the two groups. It is shown that the long-run market dynamics are highly dependent on the parameters which characterize agents’ behaviour as well as on the initial condition. Moreover, for wide ranges of the parameters a (locally) stable fundamental steady state coexists with a stable ‘non-fundamental’ steady state, or with a stable closed orbit, where only chartists survive in the long run: such cases require the numerical and graphical investigation of the basins of attraction. Other dynamic scenarios include periodic orbits and more complex attractors, where in general both types of agents survive in the long run, with time-varying wealth fractions.     

Aspects of growth in a system of cities

This paper explores and develops the modeling of growth in a system of cities in two alternative settings. First, we examine a large growing economy with a fully developed system of cities with perfectly malleable private and public capital. Local scale economies in production and diseconomies in consumption in equilibrium offset each other at the margin so that from a national point of view we have a constant returns to scale economy. We show that at the steady state the number of cities grows exponentially at the rate of growth of the population. We then examine the impact of technological change, considering a case where public capital is not perfectly malleable. In the second setting, we consider the problem of growth for a small economy and discuss problems associated with the transition to the steady state. We modify the previous model to describe a system of cities that is just starting to develop. Investment in public infrastructure capital is subject to sharp indivisibilities and as a result new cities are built at discrete points in time.     

转型期独立审计的行业变迁分析

我国注册会计师行业市场化改革的道路并不平坦。当一次次的审计案件将注册会计师推到了风口浪尖,批评更多的是指向个人、行业的道德素质或政府的不作为,很少有人结合转型期中国社会的大环境去思考问题的根源——改革思维所内涵的古典主义市场经济观忽视制度与法制要素。行政权力不受约束,个人利益不受尊重,整个社会缺乏有效的利益协调与约束机制。文中尝试将其他学者对转型期中国社会的研究应用于中国注册会计师行业变迁中具体问题的分析。     

Steady‐state priors for vector autoregressions

Bayesian priors are often used to restrain the otherwise highly over‐parametrized vector autoregressive (VAR) models. The currently available Bayesian VAR methodology does not allow the user to specify prior beliefs about the unconditional mean, or steady state, of the system. This is unfortunate as the steady state is something that economists usually claim to know relatively well. This paper develops easily implemented methods for analyzing both stationary and cointegrated VARs, in reduced or structural form, with an informative prior on the steady state. We document that prior information on the steady state leads to substantial gains in forecasting accuracy on Swedish macro data. A second example illustrates the use of informative steady‐state priors in a cointegration model of the consumption‐wealth relationship in the USA. Copyright © 2009 John Wiley & Sons, Ltd.     

The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification,Testability Issue,and Methodological Implications

Path dependence is a central construct in organizational research, used to describe a mechanism that connects the past and the future in an abstract way. However, across institutional, technology, and strategy literatures, it remains unclear why path dependence sometimes occurs and sometimes not, why it sometimes lead to inefficient outcomes and sometimes not, how it differs from mere increasing returns, and how scholars can empirically support their claims on path dependence. Hence, path dependence is not yet a theory since it does not causally relate identified variables in a systematized manner. Instead, the existing literature tends to conflate path dependence as a process (i.e. history unfolding in a self‐reinforcing manner) and as an outcome (i.e. a persisting state of the world with specific properties, called ‘lock‐in’). This paper contributes theoretically and methodologically to tackling these issues by: (1) providing a formal definition of path dependence that disentangles process and outcome, and identifies the necessary conditions for path dependence; (2) distinguishing clearly between path dependence and other ‘history matters’ kinds of mechanisms; and (3) specifying the missing link between theoretical and empirical path dependence. In particular, we suggest moving away from historical case studies of supposedly path‐dependent processes to focus on more controlled research designs such as simulations, experiments, and counterfactual investigation.