Optimal management of an ecosystem with an unknown threshold

We consider an ecosystem with two distinct equations of motion that are separated by a threshold value of the state variable. We find that increasing uncertainty (both uncertainty embedded in the natural system and uncertainty of the decisionmaker about the location of the threshold) can lead to nonmonotonic changes in precaution: a reduction in uncertainty can first increase and then decrease optimal precautionary activity. This nonmonotonicity can help to explain why regulators often give conflicting arguments about optimal abatement policies in the face of uncertainty. For example, some regulators argue for an immediate reduction in pollutant loading until uncertainty about the underlying process is reduced while others call for no costly reductions in pollutant loading until the same uncertainty is reduced. These statements can be consistent even if both sides agree on both economic objectives and the system dynamics, but have different priors on the uncertainty involved.     

Economic integration in an uneven world: an internationalist perspective

This paper discusses two progressive schools of thought that have evolved in response to international neoliberalism and the consequent competitive pressures in global markets emanating from the low-cost conditions obtained in many less developed countries. The paper identifies these as the ‘competitiveness-enhancing’ and the ‘competition-reducing’ approaches. The former is shown to be ill-suited to present circumstances of the global economy and, in any event, nationalist. The latter seeks to minimize the adverse consequences of international neoliberalism, and comprises proposals for expansive social charters and social tariffs. The paper provides a theoretical basis for this approach, and discusses the strengths and weaknesses of each of these proposals. The paper then develops and defends a new multilateral, rule-based trade proposal, called the ‘social index tariff structure’ (SITS), which would reward nations for high levels of development achieved relative to their economic means. Drawing on human development data from the Human Development Report (1993), a SITS-based trading scheme is developed for 77 countries. It is argued that a SITS regime would serve to protect the quality of life in developed countries while promoting human development in the less developed countries. The SITS proposal is assessed against Amartya Sen's ‘capabilities to achieve functionings’ approach to human development.     

Staff rotation as an anti-corruption policy: an experimental study

Within the German federal government regular staff rotation is a precautionary measure against corruption in public administration. To study the effect of this policy, an experiment was conducted where pairs of potential bribers and public officials were randomly re-matched in every round. The outcome is compared to the case where the identity of the pairs interacting remained fixed. The conclusion is that rotation of interacting pairs significantly reduces the levels of bribes as well as the frequency of inefficient decisions due to bribery.     

Benefits and unemployment in an open economy: an equilibrium analysis

This paper examines the relation between uemployment compensation and unemployment in The Netherlands. This relation is studied by menas of a small macroeconomic model for an open economy that assumes equilibrium in the labour market and on the current account. The model yields an elasticity of unemployment to benefits of 1.0, which is high compared to microeconomic research and the outcomes of disequilibrium models for The Netherlands. According to the model, a rise in the ‘wedge’ (i.e. the difference betweenn real labour cost and real net wages) leads to an increase in unemployment, whilst shifting this wedge from the employers to the employees induces a fall in unemployment.     

The three webs: an attempt at an understanding of the future

This article poses questions about the significance of increased internationalization of science which has developed since the cold war. It deals with three different aspects of present-day science: particle ptpsics, nanotechnology and space exploration. In a simple way, research can be divided into three different froms: information (which, by definition, I call public), knowledge (that is, covered by intellectual property rights (IPR)) and training. Further, I assume that innovation is commercial and thus has a profit motive, in contrast with the scientific goal of enlarging our view of the universe. There is, however, a more fundamental issue which is the realization that the type of accounting economy we have is too naive to develop our society further. Consider figures form the US Department of Commerce-if research is one cost unit, engineering to protogpe is three and full production 20, or even 50 for pharmaceuticals. These figures indicate the present importance placed on rates of return on capital in assessing the effectiveness of research.     

Unemployment consequences of an aging population: an application of insider-outsider theory

The model developed in this paper asserts that unions attach greater weight to the wishes of older workers than they do to the wishes of young workers, and wages and employment are determined by efficient bargains. Then, the wages of old workers are always higher than the wages of young workers regardless of productivity and relative supply. Employment is influenced mainly by outside opportunities. In the plausible case where old workers cannot easily get senior jobs outside their firm, junior unemployment is higher than senior unemployment. A seemingly robust result is that an increase in the ratio of old to young workers (population aging) reduces the unemployment rate and wage rate of both groups in the population.     

On the Welfare Effects of an Import Tariff Within an Economic Union

I study the effect of a small import tariff imposed by the government of an economic union of countries upon the welfare of workers in its member countries. I examine whether workers in some member countries are made worse off by the tariff imposition. Special attention is paid to the population distribution within the union and the geographical relationship among trading countries. I also examine whether the tariff imposition reduces the gaps between the welfare levels of workers in the member countries.
JEL Classification Numbers: F13, R13.     

Capital gains taxation in an economy with an ‘Austrian sector’

This paper examines the effects of a proportional capital gains in an economy with an Austrian sector (with wine and trees) and an ordinary sector. We analyze the effect of capital gains taxation (on both an accrual and a realization basis) on the efficiency with which resources are used within the Austrian sector. Since time is the only input which can be varied in the Austrian sector, this amounts to looking at the effect of capital gains taxation on the harvesting time or selling time of assets. Accrual taxation decreases the selling time of Austrian assets. Realization taxation decreases the selling time of some Austrian assets and leaves it unchanged for others. Inflation further reduces the selling time of assets taxed on an accrual basis; often, but not always, inflation increases the selling time of Austrian assets taxed on a realization basis. We also examine the effect of the special tax treatment of capital gains at death and find that the current U.S. tax system, under which capital gains taxes are waived at death, encourages investors to hold assets longer.In contrast to these results — which suggest that the capital gains tax can reduce the holding period of an asset — we show that there is a sense in which such taxes (at least when levied on a realization basis) discourage transactions and increase holding periods. It is never profitable to change the ownership of an Austrian asset between the time of the original constraint and the ultimate harvesting of the asset for final use.Capital gains taxation diverts resources from the Austrian sector to the ordinary sector. The effects on the efficiency of the allocation of investment between sectors are complicated and not easy to summarize.     

Financial well-being in an urban area: an application of multiple imputation

This article estimates a model of self-reported financial well-being (FWB) using primary data collected for a Southwestern U.S. city. Missing data are estimated using multiple imputation. Model estimates show how FWB depends on home ownership, the number of children, health insurance, age, and income. Multiple imputation results differ somewhat from complete case results.     

Diffusion of organisational innovations: an empirical test of an analytical framework

Alänge, Jacobsson, and Jarnehammar (1998) presented an analytical framework for studying the diffusion of organisational innovations, based on the developments in literature on technical innovations and their diffusion. The aim of this paper is to examine the validity of the framework. Two exploratory case studies were carried out on the diffusion of the organisational innovation TQM. The case studies showed that the framework is a useful tool for studying the diffusion of organisational innovations. However, factors such as learning processes on a national and international level and the role of fads need further consideration. In addition, factors needed for a long-term commitment such as boards and owners and internal political and cultural systems need to be further investigated. The paper also presents a model for analysing the different phases in a diffusion process.     

Designing an optimal contest

The paper brings a mechanism design perspective to the study of contests. We consider the problem of selecting a contest success function when the contest designer may also value the prize. We show that any equilibrium outcome that can be achieved by a concave increasing contest success function can be replicated by a linear contest success function. An expected utility maximizing designer should employ a linear homogeneous contest success function. We explicitly derive the optimal contest for a risk-neutral designer and present comparative statics results. Tullock's contest is optimal only when the designer's valuation for the prize is low.     

Creating an Opportunity Society

This paper comments on the work of Rector et al. (1999a, 1999b). The poverty lines implicit in their restrictive material deprivation approach are disputed and the claim that America has triumphed over poverty is rejected. Evidence is presented showing that poverty among the poorest Americans has significantly increased and is now near an all time high. The long economic expansion since the recession of 1990–1991 has left hardcore poverty essentially unchanged and relative deprivation among the poorest of the poor has increased     

Sustainability of an economy with an exhaustible resource: A viable control approach

We examine the conditions for the sustainability of a production–consumption system based on the use of an exhaustible natural resource. Instead of studying the environmental and economic interactions in terms of optimal control, we focus on the viability of the system, defined by a set of constraints combining guaranteed consumption and a stock of resources to be preserved at all times, which refers to a Rawlsian intergenerational equity perspective. Using the mathematical concept of viability kernel, which makes it possible to deal with the consistency between constraints and controlled dynamics, we exhibit the sustainable technological configurations and, whenever possible, the policy options and environmental-economic states required to obtain a perennial system. We point out the flexibility of the sustainable “extraction–consumption” choices and we show how they are neither reduced to constant consumption paths nor to Hartwick’s rule. Numerical simulations illustrate the general results.     

How Useful Is an Ec-Wide Monetary Aggregate As an Intermediate Target For Europe?*

This paper looks at whether the aggregate ERM money supply has been a useful predictor of short-term changes in inflation and growth, and of long-term trends in price levels among the core ERM countries. the evidence suggests that over the period since 1987 the ERM money supply performs at least as well, and arguably better, than the individual nominal aggregates in predicting nominal aggregates such as inflation and the price level, while neither money supply is a good predictor of real activity.