scholarly journals The Cost of Business Cycles Under Endogenous Growth

2004 ◽  
Vol 94 (4) ◽  
pp. 964-990 ◽  
Author(s):  
Gadi Barlevy
Keyword(s):  
Growth Rate ◽  
Business Cycles ◽  
Welfare Effects ◽  
Welfare Gains ◽  
Subsequent Work ◽  
Aggregate Consumption ◽  
Welfare Benefits ◽  
Consumption Volatility ◽  
The Cost ◽  
Rate Of Consumption

Robert E. Lucas, Jr. argued that the welfare gains from reducing aggregate consumption volatility are negligible. Subsequent work that revisited his calculation continued to find small welfare benefits, further reinforcing the perception that business cycles do not matter. This paper argues instead that fluctuations can affect welfare, by affecting the growth rate of consumption. I show that fluctuations can reduce growth starting from a given initial consumption, which can imply substantial welfare effects as Lucas himself observed. Empirical evidence suggests the welfare effects are likely to be substantial, about two orders of magnitude greater than Lucas' original estimates.

An urban labor market with frictional housing markets: theory and an application to the Paris urban area

2020 ◽  
Author(s):  
Guillaume Chapelle ◽  
Etienne Wasmer ◽  
Pierre-Henri Bono
Keyword(s):  
Labor Market ◽  
Labor Markets ◽  
Demand Curve ◽  
Labor Demand ◽  
Housing Markets ◽  
Welfare Effects ◽  
Welfare Gains ◽  
The Cost ◽  
Competitive Pricing ◽  
Urban Labor Market

Abstract We build a tractable model of frictional labor markets and segmented housing markets to study welfare effects of regulations, including spatial misallocation and deviation from competitive pricing of rents. The model is summarized by a labor demand curve depending on rents and wages, a wage curve reflecting labor market tightness and rents, and finally a rent curve reflecting employment. In this economy, the rent gradient in the flexible rent sector is higher than in a purely competitive housing market. This leads to spatial misallocation due to some employees commuting too much and some non-employed living inefficiently close to jobs. In turn, reducing generalized commuting costs reduces the rent gradient in the flexible rent sector and the cost of spatial misallocation of workers. The reduction in market rents is maximal when labor markets are less frictional and housing markets are more frictional, and welfare gains are larger when both are more efficient.

scholarly journals A Panel Data Study of the Effects of Economic Freedom, Regulatory Quality, and Taxation on the Growth Rate of Per Capita Real GDP

2012 ◽  
Vol 30 (1) ◽  
pp. 103-122
Author(s):  
Richard J. Cebula ◽  
Maggie Foley
Keyword(s):  
Growth Rate ◽  
Fixed Effects ◽  
Economic Freedom ◽  
Government Regulation ◽  
The Third ◽  
Real Gdp ◽  
Regulatory Quality ◽  
Gdp Growth Rate ◽  
Per Capita ◽  
The Cost

Abstract This study empirically investigates three hypotheses. The first is that higher levels of economic freedom in an economy promote a higher growth rate of economic activity and hence yield a higher growth rate of per capita real GDP in that economy. The second hypothesis is that higher quality government regulation leads to a more efficient economic system, in large part by interfering less with market functioning and in part by not adding unnecessarily to the cost of conducting business in the marketplace, and thereby leads to a higher per capita real GDP growth rate. The third hypothesis is that the higher the taxation level/burden relative to GDP in an economy, the lower the growth rate of private sector spending and hence the lower the growth rate of per capita real GDP in that economy. Using a panel dataset for OECD nations over the 2003 through 2006 period, fixed effects PLS estimations find compelling evidence in support of all three of these hypotheses.

scholarly journals The Modernization of Factionalism in Chinese Politics

1995 ◽  
Vol 47 (4) ◽  
pp. 467-494 ◽  
Author(s):  
Lowell Dittmer ◽  
Yu-Shan Wu
Keyword(s):  
Growth Rate ◽  
Business Cycles ◽  
Political Business Cycle ◽  
Chinese Politics ◽  
Reform Era ◽  
Policy Goals ◽  
Informal Politics ◽  
Material Interests ◽  
Personal Qualities ◽  
Altered Form

The informal dimension has always been important in Chinese politics, due to a traditional bias against legalism and favoring the sentimentalization of personal qualities. We contend that it remains so still, albeit in altered form. Rather than being oriented solely to personal or in-group security, factionalism in the context of the more secure bureaucratic environment of the reform era has come to embrace policy goals and material interests as well. Thus, informal politics proliferates, and factional fortunes tend tofluctuateaccording to the patterns of China's political business cycle.In the post-Mao era the radical reformers led by Deng Xiaoping have favored rapid growth, even at the expense of stability. The conservatives surrounding Chen Yun consider stability the paramount goal, believing that it should override considerations of growth. The synchronization of reform and business cycles, plus the appearance of periodic social movements whenever the growth rate slumps, makes reformers and conservatives vulnerable to charges of mismanaging the economy for their respective policy preferences. As long as the business, reform, and movement cycles coincide, wide policyfluctuationsdriven by a politics of blame are inevitable.

scholarly journals Welfare Effects of Anti-Sprawl Policies in the Presence of Urban Decline

2011 ◽  
Vol 40 (3) ◽  
pp. 439-450 ◽  
Author(s):  
Antonio M. Bento ◽  
Sofia F. Franco ◽  
Daniel Kaffine
Keyword(s):  
Urban System ◽  
Welfare Effects ◽  
Urban Decline ◽  
Welfare Gains ◽  
Optimal Development ◽  
Suburban Sprawl ◽  
Lump Sum ◽  
City Core ◽  
The City

This paper extends first-best analysis of anti-sprawl policies, such as development taxes, and examines the welfare effects of development taxes in the presence of urban decline at the city core. We find that anti-sprawl policies generate several important feedbacks within the urban system, generating additional welfare gains and affecting the level of urban decline and suburban sprawl. Further, the optimal development tax exceeds the (first-best) Pigouvian level, irrespective of whether or not revenues are returned lump-sum to all landowners or earmarked for urban decline mitigation.

Fear Induced Stabilization in an Intraguild Predation Model

2020 ◽  
Vol 30 (04) ◽  
pp. 2050053
Author(s):  
Mainul Hossain ◽  
Nikhil Pal ◽  
Sudip Samanta ◽  
Joydev Chattopadhyay
Keyword(s):  
Growth Rate ◽  
Hopf Bifurcation ◽  
Intraguild Predation ◽  
Equilibrium Points ◽  
Stable Limit ◽  
Interior Equilibrium ◽  
The Rich ◽  
The Stability ◽  
The Cost ◽  
The Impact

In the present paper, we investigate the impact of fear in an intraguild predation model. We consider that the growth rate of intraguild prey (IG prey) is reduced due to the cost of fear of intraguild predator (IG predator), and the growth rate of basal prey is suppressed due to the cost of fear of both the IG prey and the IG predator. The basic mathematical results such as positively invariant space, boundedness of the solutions, persistence of the system have been investigated. We further analyze the existence and local stability of the biologically feasible equilibrium points, and also study the Hopf-bifurcation analysis of the system with respect to the fear parameter. The direction of Hopf-bifurcation and the stability properties of the periodic solutions have also been investigated. We observe that in the absence of fear, omnivory produces chaos in a three-species food chain system. However, fear can stabilize the chaos thus obtained. We also observe that the system shows bistability behavior between IG prey free equilibrium and IG predator free equilibrium, and bistability between IG prey free equilibrium and interior equilibrium. Furthermore, we observe that for a suitable set of parameter values, the system may exhibit multiple stable limit cycles. We perform extensive numerical simulations to explore the rich dynamics of a simple intraguild predation model with fear effect.

scholarly journals A Sequential Analysis of the Welfare Effects of Mobile Phones in Africa

2018 ◽  
Vol 37 (2) ◽  
pp. 279-290
Author(s):  
Jeffrey James
Keyword(s):  
Mobile Phones ◽  
Public Transport ◽  
Sequential Analysis ◽  
Analytical Framework ◽  
Welfare Effects ◽  
Welfare Gains ◽  
African Countries ◽  
The West ◽  
Welfare Impact ◽  
Fixed Line

The main purpose of this article is to assess the welfare effects of situations in which either mobile phone devices or SIM cards (or both) are not owned by relatively poor inhabitants of African countries. The task is pursued in a sequential analytical framework where effects at different stages of the process influence the welfare impact at later stages. Much of the analysis is conducted in different institutional circumstances from those found in the West (notably sharing and renting). Perhaps the main result of the analysis—backed by ample empirical evidence—is that the fewer are the alternatives to mobile phones as forms of communication (e.g., public transport), the greater tend to be the gains from this technology. In the particular case of leapfrogging, the fewer are fixed-line phones, the more do mobiles yield gains to poor users, whether these be individuals or actual countries. It is thus the context in addition to the technology that determines the differential welfare gains.

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