Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism

The idea of family altruism is that parents care only about their children's income and not about the use of this income made by the children. First, we establish dynamical properties which place the OLG model with family altruism halfway between the model with pure life‐cyclers ( Diamond 1965 ; American Economic Review 55, 1126–1150) and the one with dynastic altruism ( Barro 1974 ; Journal of Political Economy 82, 1095–1117). Then, we show that this concept leads to interesting fiscal policy conclusions less clear‐cut and more realistic than those obtained with the two previous standard OLG models: a pay‐as‐you‐go social security is neutral but not a public debt.     

Measuring the Degree of International Harmony in Selected Accounting Measurement Practices

This research assesses empirically the extent to which selected accounting measurement practices of companies from France, Germany, Japan, the UK and the US are harmonised in the context of major international efforts to enhance the comparability of company financial statements. The findings suggest that significant differences continue in accounting measurement practices between companies originating in each of these countries. The results of the study have important implications for international standard-setters, investors, creditors and those interested in international accounting.     

ESTIMATING THE INNOVATION FUNCTION FROM PATENT NUMBERS: GMM ON COUNT PANEL DATA

The purpose of this paper is to estimate the patent equation, an empirical counterpart to the ‘knowledge-production function’. Innovation output is measured through the number of European patent applications and the input by research capital, in a panel of French manufacturing firms. Estimating the innovation function raises specific issues related to count data. Using the framework of models with multiplicative errors, we explore and test for various specifications: correlated fixed effects, serial correlations, and weak exogeneity. We also present a first extension to lagged dependent variables. © 1997 John Wiley & Sons, Ltd.     

Annuities, Bequests, and Portfolio Diversification

In this article, the diversification motives of the demand for annuities is analyzed. Using a model allowing for the uncertainty of both the human life length and the interest rate, the Decision Maker is supposed to choose an optimal portfolio to maximize a bequest. Conditions under which an increase in the risk of bond returns increase the demand for annuities are proposed and discussed. Moreover, it is shown that, contrary to previous claims, more risk adversion is associated with a lower demand for annuities.     

Political Rescaling and Municipal Cultural Public Policies: A Comparison of France and Québec

Do territories change public policies? This would appear to be a rather unusual research orientation. It is even a reversal of the most commonly accepted approaches to the study of territorial public action, which tend to look at this issue from the opposite perspective, that is, in examining how public policies affect territories. The municipal reforms that have simultaneously occurred in Québec and France since the late 1990s afford an excellent opportunity to consider this inversion of the issues. To do so, we take as our theme culture and municipal cultural policies. We try to define and understand to what extent there exist in Québec and France retroactive links between municipal restructuring and municipal decisions about cultural facilities and activities and, more generally, municipal cultural intervention in the urban milieu. This comparative analysis of the cases of France and Québec focuses on discourse as well as achievements. First, we look at the changes arising from institutional reforms in the supply of cultural activities, budgets devoted to culture, and cultural policies. We then consider culture as a vector in the construction of a new municipal institution and a new municipal territory.     

Optimal Fines under Announced and Surprise Inspections

This paper examines optimal fines in a regulatory framework where the regulator can choose either surprise or announced inspections to monitor a firm for compliance. The firm can invest in detection avoidance, but it receives a fine if the regulator discovers that it is noncompliant. In the welfare maximization problem, we focus on the trade‐off between the frequency of inspections and the magnitude of the fine. We find that when inspections are unannounced, the optimal fine is maximal, but when they are announced, the optimal fine may be less than maximal.     

What Makes the Output–Inflation Trade‐Off Change? The Absence of Accelerating Deflation in Japan

It is standard to model the output–inflation trade-off as a linear relationship with a time-invariant slope. We assess empirical evidence for two sets of theories that allow for endogenous variation in the slope of the short-run Phillips curve. At an empirical level, we examine why large negative output gaps in Japan in the late 1990s did not lead to accelerating deflation but instead coincided with stable, albeit moderately negative inflation. Our results suggest that this episode is most convincingly interpreted as reflecting a gradual flattening of the Phillips curve. We find that this flattening is best explained by models with endogenous price durations. These models imply that in any economy where trend inflation is substantially lower (or substantially higher) today than in past decades, time variation in the slope of the Phillips curve has become too important to ignore.     

A Theory of Liquidity and Regulation of Financial Intermediation

This paper studies a Diamond–Dybvig model of providing insurance against unobservable liquidity shocks in the presence of unobservable trades. We show that competitive equilibria are inefficient. A social planner finds it beneficial to introduce a wedge between the interest rate implicit in optimal allocations and the economy's marginal rate of transformation. This improves risk sharing by reducing the attractiveness of joint deviations where agents simultaneously misrepresent their type and engage in trades on private markets. We propose a simple implementation of the optimum that imposes a constraint on the portfolio share that financial intermediaries invest in short-term assets.