A noncooperative model of contest network formation

In this paper we study a model of weighted network formation. The bilateral interaction is modeled as a Tullock contest game with the possibility of a draw. We describe stable networks under different concepts of stability. We show that a Nash stable network is either the empty network or the complete network. The complete network is not immune to bilateral deviations. When we allow for limited farsightedness, a stable network immune to bilateral deviations must be a complete $M$-partite network, with partitions of different sizes. We provide several comparative statics results illustrating the importance of the structure of stable networks in mediating the effects of shocks and interventions. In particular, we show that an increase in the likelihood of a draw has a nonmonotonic effect on the level of wasteful contest spending in the society. To the best of our knowledge, this paper is the first attempt to model weighted network formation when the actions of individuals are neither strategic complements nor strategic substitutes.     

The Austrian theory of the cooperative firm

This paper draws on Wicksell's Value, Capital and Rent. The (comparative-statics) response of the cooperative to a change in its parameters (capital stock, rate of interest paid on capital stock, and production function) is examined. Severe employment problems may be expected if, in a cooperative setting, the rate of interest is, by macroeconomic management, kept at a relatively low level. Technological progress also may lead to a contraction in employment and even, under some circumstances, cause a decline in output per man. The cooperative is throughout contrasted with its capitalist counterpart.     

Valuing Mortgage Insurance Contracts in Emerging Market Economies

We develop a new option-based method for the valuation of mortgage insurance contracts in closed form in an economy where agents are risk neutral. While the proposed valuation method is general and can be used in any market, it may be particularly useful in emerging market economies where other existing methods may be either inappropriate or are too difficult to implement because of the lack of relevant data. As an application, we price a typical Serbian government-backed mortgage insurance contract.     

Great Recession and Macroeconomic Theory: A Useless Crisis?

ABSTRACT

The global financial crisis of 2007–08 and the subsequent Great Recession have pushed many economists to acknowledge a fundamental limit in the theoretical models elaborated after the monetarist counter-revolution: these models disregard the financial system. The years following the Great Recession have thus been marked by the development of what can be called the ‘Financial Frictions Approach’, a theoretical approach based on the addition of the financial system to the New Keynesian DSGE model. The results of this line of research are beginning to appear also in macroeconomics textbooks. Significant examples are the publication of the seventh edition of Blanchard’s textbook, and the publication of the third edition of the textbook co-authored by Blanchard, Amighini and Giavazzi. The objective of this work is twofold: (i) to show that the new model presented by Blanchard, Amighini and Giavazzi, which reflects the results of the ‘Financial Frictions Approach’, does not allow to elaborate a coherent explanation of the Great Recession and (ii) to present the pillars of an alternative theoretical model based on the lessons of Keynes, Schumpeter and Minsky.     

CLASSIFICATION PROBLEMS AND THE DIVIDING LINE BETWEEN GOVERNMENT AND THE MARKET: AN EXAMINATION OF NHS FOUNDATION TRUST CLASSIFICATION IN THE UK

ABSTRACT: In this paper we argue that national accounting categories provide an inadequate basis for evaluating differences between public and private sector services. This is because accounting categories rely on economic concepts such as market price but do not take account of substantive public policy goals such as universality. The argument has important consequences for the structures and systems of delivery especially where nonprofit providers and social enterprise models are substituted for public bodies formerly integrated into the government's delivery system. Using an example taken from the UK's National Health Service, we show that the mechanisms for ensuring universality through redistribution are not sufficiently taken into account for classification purposes.     

Origins of regional divergence: economic growth in socialist Yugoslavia†

Relative to western Europe, we know very little about the determinants of economic growth at the regional level within socialist Europe. This is somewhat unusual, given that socialist policy-makers have put great emphasis on equitable regional development. This article analyses the regional patterns of growth and divergence in socialist Yugoslavia. New estimates of output and inputs are constructed, and an analysis of output growth, factor accumulation, structural modernization, and productivity is provided. Two novel empirical findings are uncovered. The first is that the sources of growth across the regions were fundamentally different. Total factor productivity was a much more important source of growth in the richer regions than it was in the poorer ones. The second finding is that the source of the regional income divergence lies in the failure of the less developed regions to converge towards the employment rates and total factor productivities of the more developed regions. These failures are interpreted, at least partially, as symptoms of the governing objective and the soft budget constraint of the labour-managed firms that operated in Yugoslavia. It is argued that Yugoslavia's development model was less suited to the pre-conditions that prevailed in the less developed parts of the country.     

Context-Sensitive Access Control Model for Government Services

During the past two decades, e-government information systems have become less paper-based and more computer-based. Those information systems usually take the form of workflow systems. Due to the large social impact of e-government systems, computer security plays a pivotal role in ensuring its efficiency and effectiveness. Access control is one of the key aspects of computer security. Current access control models do not take into account the context of the system and its environment. In this article, we argue that a formal context-sensitive access control model can improve the development of e-government workflow systems and present a particular context-sensitive access control model. The subject of the article is a specification of the context-sensitive access control model for business processes (COBAC). By using a context-sensitive access control, it is possible to define more sophisticated access control policies that cannot be implemented by existing access control models. The COBAC's context is modeled using Web Ontology Language (OWL) in order to provide formal representation of context, rich representation of diverse contextual information, semantic interoperability between various context-aware systems, and a high degree of inference making. The presented model is applicable in different e-government systems, and supports the definition of access control policies for both simple and complex business processes. The model's prototype is verified by a case study on a real e-government business process—the national petty offense trial proceedings.