Income and wealth distribution in a simple model of growth

Summary. This paper studies a deterministic one-sector growth model with a constant returns to scale production function and endogenous labor supply. It is shown that the distribution of capital among the agents has an effect on the level of per-capita output. There exists a continuum of stationary equilibria with different levels of per-capita output. If the elasticity of intertemporal substitution is large, a higher output level can be achieved when income inequality is great, that is, when the income distribution is strongly dispersed. If the elasticity of intertemporal substitution is low, the reverse relation holds. The paper shows that countries with identical production technologies and identical preferences may have different GDP levels because wealth is distributed differently among their inhabitants. Received: January 29, 1999; revised version: October 4, 1999     

A new proof of the maximum principle

Summary. We offer a new proof of the maximum principle, by using the envelope theorem that is frequently used in the standard microeconomic theory. Received: April 11, 2002; revised version: June 26, 2002 Correspondence to: K. Shimomura     

A simple proof of the Sato proposition on non-homothetic CES functions

Summary. Based on some elementary results on duality, the paper proposes a much simpler way of deriving the class of non-homothetic CES production functions which was derived as a solution to a partial differential equation that defines the elasticity of substitution. Received: February 11, 1998; revised version: April 28, 1998     

A simple axiomatization and constructive representation proof for choquet expected utility

>P>Summary. We provide a set of simple and intuitive set of axioms that allow for a direct and constructive proof of the Choquet Expected Utility representation for decision making under uncertainty. Received: October 29, 2002; revised version: November 13, 2002 RID="*" ID="*" We thank Matthew Ryan for very useful comments and suggestions on related work and for encouraging us to write this note. Correspondence to: S. Grant     

Comment on “σ: The long and short of it”

I comment on some of the issues discussed by Robert Chirinko (Chirinko, R.S., 2008. σ: The long and short of it. Journal of Macroeconomics 30 (2), 671-686). I also offer some additional evidence and discuss the theoretical implications of the empirical findings regarding σ.     

A simple proof of Ekeland and Scheinkman's result on the necessity of a transversality condition

Summary. Ekeland and Scheinkman (1986) prove the necessity of a standard transversality condition under certain technical conditions. Their result is one of the most powerful on the necessity of a transversality condition currently available in the literature, and their proof involves numerous estimations and relies on Ekeland's variational principle and Fatou's lemma. This note relaxes some of their assumptions and provides a simple proof that uses neither Ekeland's principle nor a convergence result like Fatou's lemma. Received: April 24, 1998; revised version: September 8, 1998     

A simple proof of the necessity of the transversality condition

Summary. This note provides a simple proof of the necessity of the transversality condition for the differentiable reduced-form model. The proof uses only an elementary perturbation argument without relying on dynamic programming. The proof makes it clear that, contrary to common belief, the necessity of the transversality condition can be shown in a straightforward way. Received: January 22, 2001; revised version: April 2, 2001     

Disaggregation of excess demand and comparative statics with incomplete markets and nominal assets

Summary. We prove that locally, Walras' law and homogeneity characterize the structure of market excess demand functions when financial markets are incomplete and assets' returns are nominal. The method of proof is substantially different from all existing arguments as the properties of individual demand are also different. We show that this result has important implications and is part of a more general result that excess demand is an essentially arbitrary function not just of prices, but also of the exogenous parameters of the economy as asset returns, preferences, and endowments. Thus locally the equilibrium manifold, relating equilibrium prices to these parameters has also no structure. Received: September 17, 1996; revised version: November 7, 1997     

Counter intuitive results in a simple model of wage negotiations

Summary. Short-term contracts and exogenous productivity growth are introduced in a simple wage bargaining model. The equilibrium utilities corresponding to militant union behaviour are independent of the contract length. Necessary and sufficient conditions for monotonic convergence to a unique steady state are derived. Otherwise, cyclic behaviour of wage shares is inevitable. A wage decrease can occur if strike is credible, but never when strike is not credible. In the limit, as time between bargaining rounds vanishes, this paradox survives. Received: September 3, 1998; revised version: February 10, 2000     

Derived factor demand under monopoly

Summary. We generalize the formula provided by Maurice and Ferguson (1973) for derived factor demand in a monopoly by extending it to cross-price effects and taking into account other variables which may, within an general-equilibrium framework, affect demand, such as income. Hopefully, both features increase the applicability of this formula in general-equilibrium analyses. Received: April 5, 2000; revised version: June 7, 2001     

Similarity of endowments and the factor price equalization condition

Summary. We give a geometric interpretation of the lens condition, proposed by Deardorff as a shortcut for checking the factor price equalization (FPE) condition. We identify the conditions under which the lens condition implies the FPE condition. If the FPE zone is not a neighborhood of the diagonal allocations, however, the lens condition is irrelevant despite the implication since the FPE condition (hence the lens condition) is unlikely to be satisfied in that case. We give precise conditions under which the lens condition is equivalent to the FPE condition and simultaneously, the FPE zone is a neighborhood of the diagonal allocations. Received: January 2, 2002; revised version: July 1, 2002 RID="*" ID="*" The author would like to thank an anonymous referee, Bruce Dieffenbach and Michael Jerison for helpful comments.     

A comparison of Dodgson's method and the Borda count

Summary. In an election without a Condorcet winner, Dodgson's Method is designed to find the candidate that is “closest” to being a Condorcet winner. In this paper, we show that the winner from Dodgson's Method can occur at any position in the ranking obtained from the Borda Count, the plurality method, or any other positional voting procedure. In addition, we demonstrate that Dodgson's Method does not satisfy the Independence of Irrelevant Alternatives axiom. Received: January 12, 2001; revised version: June 7, 2001     

A difficulty with the address models of product differentiation

Summary. In models of product differentiation and location models it is implicitly assumed that consumers can afford to buy the differentiated goods in the market. I show that with income heterogeneity there are severe existence problems of a price equilibrium in models of horizontal product differentiation with unit demand because some consumers are income-constrained. The result generalizes to other models of product differentiation, search, and switching costs. I present an alternative specification of variable individual demand in which this kind of existence problem cannot arise. Received: October 17, 1997; revised version: February 20, 1998     

技术进步实现机制和生产要素产出弹性理论假说——来自我国9个发达经济区的实证检验

按照管理、资本和劳动要素的产出弹性关系的新理论假说,利用我国9个发达地区2000—2006年的面板数据对要素产出弹性理论假说的检验,其结果表明,由于我国在技术进步中一直主要依靠技术引进和缺乏自主创新,从而使技术进步表现为资本增加型,理论假说前提的偏离导致实证分析结果和理论分析结果不一致。结论表明,在不同的工业化发展阶段,可以选择的技术进步方式不同,要素投入的组合方式也不同。当前我国应该改变资本投入过快增长的现状,强调管理要素和高素质劳动力投入,通过不断促进技术进步,提高要素的使用效率,实现经济平稳快速增长。     

A leximin characterization of strategy-proof and non-resolute social choice procedures

Summary. We characterize strategy-proof social choice procedures when choice sets need not be singletons. Sets are compared by leximin. For a strategy-proof rule g, there is a positive integer k such that either (i) the choice sets g(r) for all profiles r have the same cardinality k and there is an individual i such that g(r) is the set of alternatives that are the k highest ranking in i's preference ordering, or (ii) all sets of cardinality 1 to k are chosen and there is a coalition L of cardinality k such that g(r) is the union of the tops for the individuals in L. There do not exist any strategy-proof rules such that the choice sets are all of cardinality to k where . Received: November 8, 1999; revised version: September 18, 2001     

A note on asymmetric and mixed strategy equilibria in the search-theoretic model of fiat money

Summary. The simple search-theoretic model of fiat money has three symmetric Nash equilibria: all agents accept money with probability 1; all agents accept money with probability 0; and all agents accept money with probability y in (0,1). Here I construct an asymmetric pure strategy equilibrium, payoff-equivalent to the symmetric mixed strategy equilibrium, where a fraction N in (0,1) of agents always accept money and 1-N never accept money. Counter to what has been conjectured previously, I find N > y. I also introduce evolutionary dynamics, and show that the economy converges to monetary exchange iff the initial proportion of agents accepting money exceeds N. Received: September 10, 1997; revised version: April 24, 1998     

Utility and entropy

Summary. In this paper we study an astonishing similarity between the utility representation problem in economics and the entropy representation problem in thermodynamics. Received: May 17, 1999; revised version: October 16, 2000     

A simple example of complex dynamics

Summary. A discrete tatonnement process is analysed within the context of a two-person, two-good exchange economy where each person has a Cobb-Douglas utility function. This process is shown to exhibit period doubling bifurcation, topological and ergodic chaos. Received: June 22, 1998; revised version: July 15, 1998     

A strategy-proofness characterization of majority rule

Summary. A feasible alternative x is a strong Condorcet winner if for every other feasible alternative y there is some majority coalition that prefers x to y. Let (resp., denote the set of all profiles of linear (resp., merely asymmetric) individual preference relations for which a strong Condorcet winner exists. Majority rule is the only non-dictatorial and strategy-proof social choice rule with domain , and majority rule is the only strategy-proof rule with domain . Received: August 29, 2000; revised version: November 13, 2002 RID="*" ID="*"We are grateful to Wulf Gaertner and our two referees for insightful comments on a previous draft. Correspondence to: D. E. Campbell     

A formal model of theory choice in science

Summary. Since the work of Thomas Kuhn, the role of social factors in the scientific enterprise has been a major concern in the philosophy and history of science. In particular, conformity effects among scientists have been used to question whether science naturally progresses over time. Using neoclassical economic reasoning, this paper develops a formal model of scientific theory choice which incorporates social factors. Our results demonstrate that the influence of social factors on scientific progress is more complex than previously thought. The patterns of theory choice predicted by the model seem consistent with historical episodes of theory change. Received: April 8, 1997; revised version: April 30, 1998