Optimal demand policies against stagflation

Zusammenfassung Optimale Nachfragepolitik zur Bek?mpfung der Stagflation. — Der Aufsatz besch?ftigt sich mit der Wahl einer optimalen Gesamtnachfrage-Politik als Antwort auf einen inflation?ren Schock — optimal in dem Sinne, da\ die Volkswirtschaft zur Vollbesch?ftigung und Preisstabilit?t auf einen Pfad zurückgeführt wird, der die sozialen Kosten minimiert. Es wird die Ansicht vertreten, da\ die Kosten eines gegebenen Stabilisierungspfades proportional sind zu den über die Zeit aufsummierten Abweichungen der Inflationsrate und der Arbeitslosenquote von den langfristigen Zielwerten. Auf der Grundlage einer sehr allgemeinen Formulierung der Phillips-Kurve wird die optimale wirtschaftspolitische Antwort auf einen Inflationsschock analysiert und gezeigt, da\ sie gew?hnliche ?Turnpike?-Eigenschaften besitzt. Dieser Ansatz wird veranschaulicht, indem er auf die USA für den Zeitraum 1971–1975 angewandt wird, wobei die Sensitivit?t des optimalen Pfades in bezug auf alternative Wohlfahrts-Bewertungen und Ansichten hinsichtlich der Natur des Trade-off untersucht wird.

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Résumé Les politiques de demande optimum contre la stagflation. — Cet article a pour sujet la selection d’une politique de demande agrégée optimum en réponse à un choc — optimum de manière qu’elle reconduit l’économie au plein emploi et à la stabilité de prix le long d’un sentier d’inflation-ch?mage minimisant des frais sociaux de ?welfare?. Nous arguons que les frais du chaque sentier donné de stabilisation peuvent être pris comme proportioneis à l’excès d’inflation et de ch?mage au-dessus du but à long terme, cumulé sur le sentier. En se fiant à une expression très générale de la ?courbe de Phillips? l’article analyse et démontre la réponse de politique optimum à un choc inflationniste pour exhiber des simples ?barrières? propriétés. L’approche est illustrée par l’application sur les E. U. pour la période de 1971 à 1975. Elle explore la sensibilité du sentier optimum aux évaluations alternatives de ?welfare? et aux vues de la nature du ?trade-off?.

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Resumen Políticas óptimas de demanda contra la estagflación. — Este artículo se ocupa de la selección de una política de demanda agregada óptima en respuesta a un ?shock? óptimo inflacionario en el sentido que devuelve el pleno empleo y la estabilidad de precios a la economía a través de una trayectoria de inflación-desempleo minimizando los costos sociales de bienestar. Se argumenta que el costo de cualquier trayectoria de estabilización dada puede tomarse como proporcional al exceso de inflación y desempleo por sobre la meta de largo plazo, acumulado a través de la trayectoria. Basándose sobre una formulación muy general de la ?curva de Phillips? se analiza la respuesta de política óptima a un ?shock? inflacionario y se muestra que exhibe propiedades simples de Camino de portazgo. El enfoque se ilustra aplicándolo a los EEUU para el período 1971–75, investigando la sensibilidad de la trayectoria óptima con respecto a evaluaciones de bienestar alternativas y apreciaciones sobre la naturaleza del ?trade-off?.

     

Human Development at Risk: Economic Growth with Pollution-Induced Health Shocks

Risks to human health stemming from polluted air, water, and soil are substantial, especially in the rapidly growing economies. The present paper develops a theoretical framework to study an endogenously growing economy which is subject to pollution-induced health shocks with the health status being an argument of the welfare function. Pollution, arising as a negative externality from production, adversely and randomly affects the regeneration ability of a human body leading to a decline in the overall health status of the population. We include two types of uncertainty surrounding the health status: continuous small-scale fluctuations, driven by the Wiener process, and large-scale shocks or epidemics, driven by the Poisson process. We derive closed-form analytical solutions for the optimal abatement policy and the growth rate of consumption. Devoting a constant fraction of output to emissions abatement delivers the first-best allocation. This fraction is an increasing function of total factor productivity, polluting intensity of production, and damage intensity of both continuous and jump-type shocks. A higher frequency of jumps also calls for more vigorous abatement policies. By contrast, the optimal growth rate of the economy is decreasing in the frequency and intensity of shocks and in the polluting intensity of output. The efficiency of abatement technology has, in general, an ambiguous bearing on both the growth rate and on the abatement share due to the opposing forces of the direct and indirect effects.     

The Indirect Displacement Hypothesis: a Case Study in Washington,D.C.

Stereotypes abound about the clash between newcomers to urban neighborhoods and their longstanding residents. In a case study of Columbia Heights in the District of Columbia, the preferences and attitudes of newcomers and longstanding residents are compared. The comparison will help assess the extent to which indirect displacement pressures in the domain of retail activity might be occurring in Columbia Heights. Data from surveys conducted in 2008 by the Howard University Center for Urban Progress (HUCUP) form the empirical base of this study. A total of 217 completed surveys were received, 116 from an Internet survey and 101 one-on-one street interviews. The sample was split into thirds (according to length of time that the participant lived in the neighborhood) leading to break points at two years and eight years of residency. All respondents who lived in the neighborhood two years or less or eight years or more were kept in the final sample. The former were defined as “newcomers” and the latter were defined as “longstanding residents”. There were 77 newcomers and 74 longstanding residents in the final sample. The survey instrument inquired about respondents’ opinions about the availability and quality of stores by type, the variety of stores, and what types of stores they would like to see added to the neighborhood. Respondents were then asked their assessment of the new commercial developments and of the previously existing businesses in the corridor. Chi-square tests were used to test the hypotheses that there were differences between the two populations -- newcomers and long-standing residents -- in terms of preferences and attitudes. The findings demonstrated significant differences between the two groups in terms of their opinions about the commercial corridor, although both groups were generally pleased with the new retail developments. The analysis of these data weakly supports the hypothesis that indirect factors could heighten pressures for displacement of longstanding residents, but it is argued that the main focus of gentrification studies should continue to be on the direct economic factors affecting longstanding residents during neighborhood revitalization.     

Beyond the existence proof: ontological conditions, epistemological implications, and in-depth interview research

In-depth interviewing is a promising method. Alas, traditional in-depth interview sample designs prohibit generalizing. Yet, after acknowledging this limitation, in-depth interview studies generalize anyway. Generalization appears unavoidable; thus, sample design must be grounded in plausible ontological and epistemological assumptions that enable generalization. Many in-depth interviewers reject such designs. The paper demonstrates that traditional sampling for in-depth interview studies is indefensible given plausible ontological conditions, and engages the epistemological claims that purportedly justify traditional sampling. The paper finds that the promise of in-depth interviewing will go unrealized unless interviewers adopt ontologically plausible sample designs. Otherwise, in-depth interviewing can only provide existence proofs, at best.     

Efficiency of two sided investments in an equilibrium unemployment framework

This paper investigates the efficiency of investments by firms and workers in a matching model with high- and low-productivity jobs. Search is sector specific and random within sectors. Search frictions and ex-post bargaining imply that wage inequality arises as a result of the difference in investment costs between the sectors. The efficiency properties of the equilibrium are analyzed under the particular division in bargaining proposed by Hosios (1990). The conclusion is that the equilibrium is inefficient, with a too low fraction of workers and a too high vacancy-unemployment ratio in the high-productivity sector. The opposite happens in the low-productivity sector.     

Making the connections between transport disadvantage and the social exclusion of low income populations in the Tshwane Region of South Africa

To date, the majority of studies which consider transport from a social exclusion perspective have been conducted in the context of the developed world where both income poverty and lack of transport are relative rather absolute states. In a unique departure from these previous studies, this paper explores the relationship between transport and social disadvantage in the development context, the key difference being that income poverty is absolute and where there is much lower access to both private and public transportation generally. Thus, it seeks to explore whether the concept of social exclusion remains valid, when it is the majority of the population that is experiencing transport and income poverty compared with the minority who do so in advanced economies.The paper is based on a scoping study for the Republic of South Africa Department of Transport (RSA DOT), which primarily involved focus group discussions with a range of socially deprived urban and peri-urban population groups living in the Tshwane region of South Africa. In a second departure from previous studies which consider transport and social disadvantage in the development context, the study takes a primarily urban focus. The rationale for this is that theoretically low income urban settlements do not suffer from the lack of transport infrastructure and motorised transport services in the way that more remote rural areas do. The policy issue is therefore less a question of addressing a deficit in supply and more one of addressing particular aspects of public transit service failure, which are more readily amenable to relatively low cost, manageable, small-scale national and local policy interventions.A primary aim for the study was to reinvigorate cross-government debate of these issues in the hope of breaking South African government’s long-standing and persistent policy inertia in the delivery of equitable and socially sustainable urban transport systems.     

Is low unionisation in the British hospitality industry due to industry characteristics?

Low recognition and concomitant characteristics of a union presence are key factors associated with very low union membership in the British hospitality industry (HI) but there may be exceptional factors in the HI that render it more amenable to union membership after standard explanations are accounted for. Although the lessons for unions are to seek greater employer legitimacy at the same time as securing membership, recognition rates would have to increase by six times to double the rate of union density in the HI and satisfy ‘frustrated’ demand for unionisation. Questions are also raised about the utility of the statutory recognition procedures and current union organising and retention strategies.