The role of externalities and information aggregation in market collapse

We examine the role that belief, network externality, and information aggregation play in inefficient market collapses. After receiving consecutive negative shocks, some ex-ante identical Bayesian agents will be discouraged about the unknown state of the market they invest; therefore, they will stop investing. This decision will have two effects: first, it will cause agents to aggregate information through social/observational learning; second, it will decrease the network externality effect. We show that there might be an inefficient market collapse if the externality effect diminishes too much, and the cost of re-entry to the market is too high. We also analyze the effects of strategic delay and experimentation on the exit decision of the agents. I especially thank Thomas D. Jeitschko, Matthew Mitchell, B. Ravikumar Ted Temzelides. I also thank anonymous referees, an associate editor, John Conlon, Larry Samuelson, Troy Tassier, Stephen Williamson, and seminar participants of the University of Saskatchewan, Georgia Tech, Concordia University, University of Manitoba, Iowa Alumni Workshop, Midwest Economic Theory Conferences held at Indiana Bloomington, and Notre Dame, and 1st International Conference on Business, Management and Economics organized by Yasar University.     

非营利组织营利行为的成因与规范

营利行为日渐成为非营利组织获取收入的重要方式。但对于非营利组织来说，营利行为是一把双刃剑：太弱，运转资金不足，可能有生存危险；太强，易偏离非营利目标，改变组织性质。因此，规范非营利组织的营利行为，有利于增强其财务独立性，更好地为社会公益目标服务。     

我国基本养老保险扩面的收入分配效应研究

文章基于一般均衡分析框架,通过构建“统账结合”制基本养老保险的异质性跨期交叠一般均衡动态模型,引入国发〔2005〕38号文的主要内容,利用政策仿真、参数估值和敏感性检验等方法,重点研究了养老保险制度覆盖面扩展的收入分配和再分配效应,并进行了理论推导和实证测算。结果发现：（1）我国基本养老保险扩面具有明显的收入分配和再分配效应,且再分配效应是累进的,发生了从城镇企业职工为代表的高收入者向以灵活就业人员和农民工为代表的低收入者的收入转移;（2）个人账户发挥了平滑作用,有利于改善不同类型劳动者终生的收入分配,但不利于收入再分配的改善;（3）社会统筹账户具有较强的收入再分配效应,有利于改善不同类型劳动者的收入再分配,缩小收入差距。参数敏感性检验表明结论是稳健的。因此,进一步优化社会统筹账户有利于减小收入不平等。     

On the Feasibility of a Liberal Welfare State: Agency and Exit Costs in Income Security Clubs

This paper investigates whether individuals might voluntarily join and remain members of a state in which high levels of social insurance are provided. That is to say, are there plausible circumstances in which a social welfare state can be regarded as “liberal” in the sense that it has the universal support of its citizens?As a point of departure, the paper demonstrates that risk-averse individuals in a setting of substantial income or health uncertainty will voluntarily join private income-security clubs. Private income-security clubs, however, cannot be entirely voluntary because they must solve the problem of adverse selection, as with entry or exit fees. The paper demonstrates that individuals may opt for governmental provision of income security services, when there is uncertainty about the quality of private club services, because naturally high exit costs allow national governments to economically address the problem of adverse selection. The analysis also suggests that liberal income security programs may have constitutional or quasi-constitutional status because of the nature of the long-term nature of the insurance contract.     

金融危机下的资本主义将何去何从

2008年全球金融危机爆发以来,世界主要资本主义国家出现了经济增长停滞、失业率畸高、贫富差距扩大等现象,经济与社会的困境引发了西方学术界对资本主义经济、社会,乃至政治发展模式的反思,企图通过反思找到引发危机的真正原因,并促进资本主义的自我调整和完善。一方面,我们应该看到,金融危机反映了资本主义制度致命的缺陷,其根源就在于资本主义基本矛盾,只要资本主义制度存在,危机的爆发将是不可避免的;另一方面,我们也应意识到,仅凭这一场危机就断言资本主义从此将退出历史舞台,恐怕还为时过早。     

Income Mobility, Inequality and Social Welfare

It is often argued that an observation of rising annual income inequality need not have negative normative implications. The argument is that if there has been a sufficiently large simultaneous increase in mobility, the inequality of income measured over a longer time period can be lower despite the rise in annual inequality. In this paper, it is shown by example that if normative implications are drawn from a standard social welfare function, the set of circumstances put forward in the above argument are not sufficient to guarantee that social welfare will improve. The reason is that even though rising mobility does reduce longer term inequality, it also increases the variability of income profiles over time and the latter has a detrimental social welfare effect. Hence, there are two types of mobility: one which reduces inequality (regression to the mean), but another that increases inequality (relative movements uncorrelated with incomes). Further, if individuals' aversion to income variabiltiy is sufficiently larger than the social welfare judge's aversion to inequality, then an increase in mobility, no matter how large, cannot offset the negative normative effect of rising annual inequality.     

社会统筹养老金供给的两难困境与政策选择

在中国养老保险制度建立与完善过程中,其主要矛盾仍然是如何筹资和如何给付的问题。社会统筹主要通过提高缴费率和扩大覆盖面两条途径来增加基金供给,而现行制度却面临着养老金供给的两难困境。一是提高缴费率增加了基金收入,但不利于经济增长与扩大覆盖面;二是不同群体实行差别费率有利于扩大覆盖面,但加剧了养老金收支的失衡。经数理模型与实证分析,社会统筹缴费率应该保持适度水平,同时应该对不同群体实行差别费率的政策进行调整,以建立养老保障的长效机制。     

Dynamics of environmental quality and economic development: the regional experience from Yangtze River Delta of China

This article investigates the dynamic relationship between economic progress and environmental quality at a regional level. An important economic intuition in this context is that environmental degradation will be limited by human behaviour if costs and benefits of such degradation are local since economic agents will then be incentivized to choose appropriate corrective action. Therefore, we note the likelihood that regional economic development can help regions ‘grow out of’ environmental problems. Using a new data set from Yangtze River Delta of China, we find a strong confirmation of the intuition that human can and will resolve the environmental problem by altering the damaging behaviour of economic agents. A very interesting finding of this study is that the relationship between environmental quality and economic progress measured by per capita income can display a wave-like function in the case of water pollution, as opposed to the much dramatized environmental Kuznets curve, with significant policy implications.     

Optimal Dynamic Taxation with Distinctive Forms of Social Status Attainment

We examine the role of both consumption‐ and wealth‐induced social comparisons in setting dynamic optimal income taxation. Under complete information, state‐invariant labor income taxes are used to remedy the externality caused by consumption‐induced social comparisons, while state‐contingent capital income taxes are used to remedy the externalities caused by both consumption‐ and wealth‐induced social comparisons. Under incomplete information, distinct types of agents are subject to an identical marginal capital income tax, which removes social comparisons. To solve the information problem, low‐productivity agents could be subject to a lower marginal labor tax than high‐productivity agents, which contradicts the traditional result in the Mirrlees–Stiglitz models.     

Redistributive taxation as social insurance

The modern literature on nonlinear optimal taxation treats differences in income as being due to unobserved differences in ability. A striking result of this assumption is that high income agents should face a zero marginal tax rate. In this paper I assume that differences in observed income are due to exogenous differences in luck. Hence the optimal redistributive tax involves trading off the benefits due to ‘social insurance’ with the costs due to reduced incentives. I derive the optimal forms for linear and nonlinear taxes, and compute some algebraic and numeric examples. Typically high income individuals will face quite high marginal tax rates.     

Self-Enforcing Intergenerational Social Contracts for Pareto Improving Pollution Mitigation

We consider, in an overlapping generations model with an environmental externality, a scheme of contracts between any two successive generations. Under each contract, agents of the young generation invest a share of their labor income in pollution mitigation in exchange for a transfer in the second period of their lives. The transfer is financed in a pay-as-you-go manner by the next young generation. Different from previous work we assume that the transfer is granted as a subsidy to capital income rather than lump sum. We show that the existence of a contract which is Pareto improving over the situation without contract for any two generations requires a sufficiently high level of income. In a steady state with social contracts in each period, the pollution stock is lower compared to a steady state without contracts. Analytical and numerical analysis of the dynamics under Nash bargaining suggests that under reasonable conditions, also steady state income and welfare are higher. Delaying the implementation of a social contract for too long or imposing a contract with too low mitigation can be costly: Net income may inevitably fall below the threshold in finite time so that Pareto improving mitigation is no longer possible and the economy converges to a steady state with high pollution stock and low income and welfare. In the second part of the paper, we study a game theoretic setup, taking into account that credibly committing to a contract might not be possible. We show that with transfers granted as a subsidy to capital income, there exist mitigation transfer schemes which are both Pareto improving and give no generation an incentive to deviate from any of its contracts even in a dynamically efficient economy. Social contracts coexist with private savings.     

Household willingness to pay and income pooling: A comment

We demonstrate some problems with Munro 2005 (“Household willingness to pay equals individual willingness to pay if and only if the household income pools”, Economics Letters 88, 227-230). Furthermore, we reconsider income pooling in a slightly changed framework and prove: Income pooling implies that household willingness to pay is equal to minimal individual willingness to pay. The converse is not true.     

Optimal Nonlinear Income Taxation with Habit Formation

It has recently been shown that incorporating “keeping up with the Joneses” preferences into a prototypical two‐ability‐type optimal nonlinear income tax model leads to higher marginal tax rates for both types of agents. In particular, the high‐skill type faces a positive marginal tax rate, rather than zero as in the conventional case. In this paper, agents’ utility functions are postulated to exhibit “habit formation in consumption” such that the prototypical two‐ability‐type optimal nonlinear income tax model becomes a dynamic analytical framework. We show that if the government can commit to its future fiscal policy, the presence of consumption habits does not affect the standard results on optimal marginal tax rates. By contrast, if the government cannot precommit, the high‐skill type will face a negative marginal tax rate, while the low‐skill type’s marginal tax rate remains positive.     

Continuous choice functions and the strong axiom of revealed preference

Summary In this note, it is shown that a result due to Uzawa showing that the weak axiom of revealed preference together with a regularity condition implies the strong axiom of revealed preference can be derived from the regularity conditionalone, if the choice function is continuous in prices and in income. The observation that the weak axiom of revealed preference is not needed suggests that this regularity condition is remarkably strong. The main result of the paper is quite general in the sense that the only additional assumption on the choice function is that the whole budget be spent.I thank Charles Blackorby for his comments on an earlier version.     

The politics of redistributive social insurance

This paper analyses the political support for a social insurance that includes elements of redistribution when there exists an imperfect private insurance alternative. Individuals differ both in their income and risk. The social insurance is compulsory and charges an income-related contribution with pooling of risks. The private insurance is voluntary and charges a contribution based on individual risks. However due to the adverse selection problem, private insurance companies provide only partial insurance. Adopting a non-expected utility model, we show that there is a general majority support for social insurance and that this support is increasing with risk aversion. We also show that a mixed insurance is politically impossible, regardless of the degree of redistribution of social insurance and the joint distribution of risk and income in the population. Lastly, we analyse how the political support for social insurance is affected by any change in its redistributive component and the possibility of using genetic tests.     

Status, affluence, and inequality: Rank-based comparisons in games of status

We examine the effects of changes in the income distribution in an economy where agents' utility depends both on consumption and on their rank in the distribution of conspicuous consumption. We introduce a new methodology to compare the behavior of agents that occupy the same rank in the two different income distributions but typically have different levels of incomes. Here, an increase in incomes of the least endowed improves their welfare, yet it also increases social competition, making those in the middle to be worse off—even if they have higher incomes as well. As social competition can be lowered by spreading agents apart in income space, we find that an increase in incomes for all, augmented by (weakly) increased income dispersion, constitutes a sufficient condition for Pareto-improvement. We also show that one can have an increase both in income and relative position but still be worse off.     

Optimal welfare and in-work benefits with search unemployment and observable abilities

This paper explores the optimal interaction between the tax system and social assistance in insuring people against the risks of involuntary unemployment and low ability. To that end, we introduce search unemployment in a model of optimal non-linear income taxation. The relationship between welfare benefits and the optimal level of in-work benefits is U-shaped. This explains why in-work benefits are called for both in countries that grant low welfare benefits and countries that provide high welfare benefits. An earned-income tax credit optimally induces all agents to look for work if job search is cheap and effective, agents are not very risk averse, and the least-skilled agents are relatively productive.     

Nonseparable preferences and optimal social security systems

In this paper, we consider economies in which agents are privately informed about their skills, which evolve stochastically over time. We require agents' preferences to be weakly separable between the lifetime paths of consumption and labor. However, we allow for intertemporal nonseparabilities in preferences like habit formation. In this environment, we derive a generalized version of the Inverse Euler Equation and use it to show that intertemporal wedges characterizing optimal allocations of consumption can be strictly negative. We also show that preference nonseparabilities imply that optimal differentiable asset income taxes are necessarily retrospective in nature. We show that under weak conditions, it is possible to implement a socially optimal allocation using a social security system in which taxes on wealth are linear, and taxes/transfers are history-dependent only at retirement. The average asset income tax in this system is zero.     

显性部分存款保险下的有效银行退出机制--基于成本收益分析下的博弈分析

目前,中国银行业还没有建立起有效的市场退出机制和相关的制度安排,这不符合市场经济条件下金融业的基本规则,也给国家带来了沉重的负担.本论文通过一个二阶段完全信息动态博弈模型的分析揭示,由于银监会未建立起有效的成本约束下的市场退出机制,使得相机抉择的关闭机制对于商业银行而言是一个不可置信的威胁,促进了商业银行的冒险投资,加之隐性存款保险的存在,形成巨大的社会成本和福利损失.目前条件下,加快市场退出机制建设并建立与之相配套的显性部分存款保险制度是一个上佳的选择.     

‘Double dipping’: the combined effects of social security and civil service pensions on employee retirement

How do macro variables such as aggregate consumption, aggregate money demand, prices, and interest rates vary in response to government attempts to redistribute income across agents through selective tax-transfer policies? This question is investigated for an overlapping generations model consisting of heterogeneously endowed three-period lived agents. In the presumably most favorable case for invariance (identical log-linear utility functions), it is shown that positive interest rate macro equilibria are invariant with respect to redistributions in social security benefits if and only if all agents initially exhibit qualitatively identical liquidity preference behavior, i.e. positive money holding only in youth, only in middle-age, or never.