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 implications of heterogeneous resource intensities on technical change and growth

Abstract We analyze the long‐term dynamics of an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. It is shown that heterogeneity induces technical change to be biased towards resource‐intensive sectors. Along the balanced growth path, the sectoral structure of the economy is constant as the higher resource dependency in resource‐intensive sectors is compensated by enhanced research activities. Resource taxes have no impact on dynamics except when the tax rate varies over time. Research subsidies and the sectoral provision of productivity‐enhancing public goods raise growth and provide an effective tool for structural policy.     

Price and interest rate dynamics induced by multiperiod contracts

This paper suggests a mechanism by which nominal price rigidities can create a transmission mechanism for monetary shocks through relative price distortions in an economy with both spot and contract markets. The globally unique equilibrium time path of interest rates and prices following an impulse shock to the money supply is characterized. The model predicts that prices and interest rates cycle around the new steady state, with real interest rates initially falling and prices overshooting in the case of a positive shock. The volatility of spot prices and interest rates exceeds that of contract prices.     

Imbrications of institutional logics: the case of an e‐government initiative in Greece

This paper examines critically whether e‐government initiatives can be conceived of as representing a shift from a bureaucratic to a citizen‐centric institutional logic. We draw upon a longitudinal study of a Greek e‐government initiative that introduced one‐stop shops for the delivery of government services. Based on institutional theory, we provide a framework that illustrates the domains of institutional change that accompany e‐government projects and show how such institutional change can be understood as complex imbrications of contrasting institutional logics rather than one institutional logic displacing another. We argue that imbricated logics may have many unintended consequences which are not simply the outcome of either of the logics but are emergent from the imbrication.     

EFFECTS OF LABOR REALLOCATION ON PRODUCTIVITY AND INEQUALITY—INSIGHTS FROM STUDIES ON TRANSITION

From a theoretical perspective, the link between the speed and scope of rapid labor reallocation and productivity growth or income inequality is ambiguous. Do reallocations with more flows tend to produce higher productivity growth? Does such a link appear at the expense of higher income inequality? We explore the rich evidence from earlier studies on worker flows in the period of massive and rapid labor reallocation, that is, the economic transition from a centrally planned to a market-oriented economy in CEE. We have collected over 450 estimates of job flows from the literature and used these inputs to estimate the short-run and long-run relationship between labor market flows, labor productivity, and income inequality. We apply the tools typical for a meta-analysis to verify the empirical regularities between labor flows and productivity growth as well as income inequality. Our findings suggest only weak and short-term links with productivity, driven predominantly by business cycles. However, data reveal a strong pattern for income inequality in the short run—more churning during reallocation is associated with a level effect toward increased Gini indices.     

The supply-of-immigrants function and taxation of immigrant's incomes: An econometric analysis

This paper considers the derivation of the commonly estimated macro supply-of-migrants equation from a discrete choice-of-location theory, in which tastes are stochastic. This approach highlights a number of economic and econometric problems inherent in popular forms of this equation. A logit specification of the supply function of U.S. immigrants is presented, using aggregated data on applications for labor certificates rather than observed movements. A modest simulation then follows, reporting the sensitivity of migration flows, hours worked by immigrants, and tax revenues, under alternative rates of Bhagwati's proposed tax on U.S. immigrant's incomes.     

Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey

This paper empirically explores the incidence of labor inspections across registered firms in 72 developing countries. Results show that larger firms are more likely to be inspected than smaller firms. Interestingly, inspections are less likely to occur among firms with a larger share of low‐skilled workers, and that operate in industries with more tax evasion. We explore the heterogeneity of these findings across income and geographic groups, and conclude by briefly discussing the consistency of the stylized facts with competing theories of inspection agencies’ behavior.     

Estimating systematic continuous-time trends in recidivism using a non-Gaussian panel data model

We model panel data of crime careers of juveniles from a Dutch Judicial Juvenile Institution. The data are decomposed into a systematic and an individual-specific component, of which the systematic component reflects the general time-varying conditions including the criminological climate. Within a model-based analysis, we treat (1) shared effects of each group with the same systematic conditions, (2) strongly non-Gaussian features of the individual time series, (3) unobserved common systematic conditions, (4) changing recidivism probabilities in continuous time and (5) missing observations. We adopt a non-Gaussian multivariate state-space model that deals with all these issues simultaneously. The parameters of the model are estimated by Monte Carlo maximum likelihood methods. This paper illustrates the methods empirically. We compare continuous time trends and standard discrete-time stochastic trend specifications. We find interesting common time variation in the recidivism behaviour of the juveniles during a period of 13 years, while taking account of significant heterogeneity determined by personality characteristics and initial crime records.