Mortality as an Indicator of Economic Success and Failure

Quality of life depends on various physical and social conditions, such as the epidemiological environment in which a person lives. The availability of health care and the nature of medical insurance—public as well as private—are among the important influences on life and death. So are other social services, including basic educa tion and the orderliness of urban living, and the access to modern medical knowledge in rural communities. The statistics on mortality draw our attention to all these policy issues. Mortality information can throw light also on the nature of social inequalities, including gender bias and racial disparities     

Segmented asset markets and optimal exchange rate regimes

This paper revisits the issue of the optimal exchange rate regime in a flexible price environment. The key innovation is that we analyze this question in the context of environments where only a fraction of agents participate in asset market transactions (i.e., asset markets are segmented). Under this friction alternative exchange rate regimes have different implications for real allocations in the economy. In the context of this environment we show that flexible exchange rates are optimal under monetary shocks and fixed exchange rates are optimal under real shocks.     

Disinflation programs under policy uncertainty

This paper uses a model with endogenous labor supply to study exchange rate-based inflation stabilization programs under uncertainty regarding the duration of the program. The paper finds that the output and consumption dynamics induced by these programs are extremely sensitive to whether the programs are perceived to have a chance of continuing permanently or whether they are expected to end in finite time. It is shown that the business cycle dynamics for output that are typically associated with these programs arise only when the policy is expected to collapse in finite time. Furthermore, for the purposes of rationalizing the stylized facts, the uncertain duration channel appears to induce a fundamental tension between the consumption dynamics and the current account dynamics. These results raise doubts regarding the explanatory power of the uncertain duration channel in particular and the credibility channel in general.     

Famines

This is a text of the first Annual Lecture of the Development Studies Association. It investigates a variety of issues that arise in famine analysis, covering identification, causation and prevention. The rejection of the food availability approach is combined with exploration of the ‘entitlement approach’ presented by the author in an earlier contribution in the Cambridge Journal of Economics, Vol. 1 (1977). Four recent famines as well as some famous historical ones are examined in the light of the entitlement approach. Aside from throwing light on the causes and cures of famines, the entitlement approach also permits us to distinguish between various types of famines all of which share the feature of a common predicament of a mass of people but which do not share the same causal mechanism, nor invite the same response. Famine analysis, it is shown, requires more structure than the traditional approaches are able to provide.     

FIXED COSTS,THE BALANCED BUDGET MULTIPLIER AND WELFARE*

In a two‐sector model, where one of the sectors is monopolistically competitive and subject to increasing returns to scale but without love for variety, we analyse the effects of a balanced budget fiscal expansion. Such an expansion could increase the welfare of the representative individual, if elasticities of substitution in production and consumption are low. A reorganization of production takes place—increasing returns enabling a rise in real income.     

Economic development and capability expansion in historical perspective

This paper is the text of a lecture given by the author at the Academic Conference on Charitable Services and Social Forces in History, at the Chinese University of Hong Kong, on 8 December 1999.