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Distributional extensions of the benchmark AK endogenous growth model and of the Ramsey model are presented in this paper. The resulting geographic growth model - a forward-backward parabolic partial diferential equation (PDE) over a bounded spatial domain - is governed by two main driving forces: a spatial friction in the reallocation of physical capital, and a spatial arbitrage driving the reallocation of savings. The spatial AK model solution, starting from an unequal distribution of capital, displays convergence over time to a spatially homogeneous balanced growth path with positive growth rates. The spatial Ramsey model potentially contains both difusive and agglomerative spatial forces. If there are no agglomerative forces, the solution displays convergence to a spatially homogenous steady state, but if an agglomerative force exists, there is increasing spatial concentration of capital over time. This shows that convergence in the aggregate can be consistent with diferent distribution profles over locations. An additional contribution of the paper is to develop a distributive comparative dynamics analysis for a spatially heterogeneous productivity shock. It is shown that, although there is redistribution of consumption across locations, technological inequality is persistent info:eu-repo/semantics/publishedVersion

During the Great Recession of 2007, unemployment reached nearly 10 percent and the ratio of un- employment to open positions (as measured by the Help Wanted OnLine Index) more than tripled. The weak labor market prompted an unprecedented extension in the length of time in which a claimant can collect unemployment insurance (UI) to 99 weeks, at an expense to date of $226.4 billion. While many claim that extending UI during a recession will reduce search intensity, the effect of weak labor market conditions on search remains a mystery. As a result, policymakers are in the dark as to whether UI ex- tensions reduce already low search effort during recessions or perhaps decrease excessive search, which causes congestion in the labor market. At the same time, modelers of the labor market have little em- pirical justification for their assumptions on how search intensity changes over the business cycle. This paper develops a search model where the impact of macro labor market conditions on a worker's search effort depends on whether these two factors are substitutes or complements in the job search process. Parameter estimates of the structural model using a sample of unemployment spells from the National Longitudinal Survey of Youth 1997 indicate that macro labor market conditions and individual search effort are complements and move together over the business cycle. The estimation also reveals that more risk-averse and less wealthy individuals exhibit less search effort.

The broad concept of an individual's welfare is actually a cluster of related specific concepts that bear a "family resemblance" to one another. One might care about how a policy will affect people both in terms of their subjective preferences and also in terms of some notion of their objective interests. This paper provides a framework for evaluation of policies in terms of welfare criteria that combine these two considerations. Sufficient conditions are provided for such a criterion to imply the same ranking of social states as does Pareto's unanimity criterion. Sufficiency is proved via study of a community of agents with interdependent ordinal preferences., 24 pages

This paper examines the consequences of international financial integration in a two–sector heterogeneous–agent dynamic general equilibrium model of occupational choice with financial constraints and idiosyncratic risks. We discuss the macroeconomic and distributional effects of financial market integration for small economies which differ only with respect to the tightness of constraints on the domestic credit market. The results contribute to an explanation of the ‘Lucas paradox’, i.e. the empirical observation of capital flowing from poor to rich countries, where lending countries are characterized by tighter domestic constraints and lower capital returns. Capital market liberalization goes along with adjustments towards the world return. Capital–exporting countries experience an increase in GNP, whereas the GDP effect is of ambiguous sign and driven by the tightness of the domestic credit market. Countries with less tight constraints or unlimited access to external business financing loose throughout integration due to a decline in aggregate output and a very unequal distribution of welfare gains and losses in the underlying heterogeneous–agent economy. We find that international integration is only beneficial for economies where financial constraints on entrepreneurial activity are very tight. Here, we observe an accumulation–driven rise in the entrepreneurship rate, overall positive output effects and welfare gains for all members of society.

Due to the high concentration of economic activity along the low-lying coastal zone of the Nile delta and its dependence on Nile river streamflow, Egypt's economy is highly exposed to adverse climate change. Adaptation planning requires a forward-looking assessment of climate change impacts on economic performance at economy-wide and sectoral level and a cost-benefit assessment of conceivable adaptation investments. This study develops a multisectoral intertemporal general equilibrium model with forward-looking agents, population growth and technical progress to analyse the long-run growth prospects of Egypt in a changing climate. Based on a review of existing estimates of climate change impacts on agricultural productivity, labor productivity and the potential losses due to sea-level rise for the country, the model is used to simulate the effects of climate change on aggregate consumption, investment and welfare up to 2050. Available cost estimates for adaptation investments are employed to explore adaptation strategies. On the methodological side, the present study overcomes the limitations of existing recursive-dynamic computable general models for climate change impact analysis by incorporating forward-looking expectations. Moreover, it extends the existing family of discrete-time intertemporal computable general equilibrium models to which our model belongs by incorporating population growth and technical progress. On the empirical side, the model is calibrated to a social accounting matrix that reflects the observed current structure of the Egyptian economy, and the climate change impact and adaptation scenarios are informed by a close review of existing quantitative estimates for the size order of impacts and the costs of adaptation measures. The simulation analysis suggests that in the absence of policy-led adaptation investments, real GDP towards the middle of the century will be nearly 10 percent lower than in a hypothetical baseline without climate change. A combination of adaptation measures, that include coastal protection investments for vulnerable sections along the low-lying Nile delta, support for changes in crop management practices and investments to raise irrigation efficiency, could reduce the GDP loss in 2050 to around 4 percent.

Financial incentives have shown strong positive short-run effects for problematic health behaviors that likely stem from time inconsistency. However, the effects often disappear once incentive programs end. This paper analyzes the results of a large-scale workplace field experiment to examine whether self-funded commitment contracts can improve the long-run effects of an incentive program. A four-week incentive program targeting use of the company gym generated only small lasting effects on behavior. Those that also offered a commitment contract at the end of the program, however, showed demand for commitment and significant long-run changes, detectable even several years after the incentive ended. (JEL D03, I10, J32)

This paper analyzes the possibility of improving the efficiency of child benefit programs in an overlapping generations economy that has endogenous fertility and large government debt levels. We derive the conditions for this improvement using Representative-Consumer and Children-for-Representative-Consumers efficiency criteria in the endogenous fertility setting, as proposed by Michel and Wigniolle (2007). We find that the result crucially depends on the relative amount of accumulated government debt in the economy. When the elasticity of interest rates to child benefit is close to zero and there exists a huge amount of accumulated debt in the economy, financing child benefit programs by issuing debt and using lump-sum tax leads to RC-improvements. This finding is likely to hold in the economies of developed countries that have low fertility rates. We finally provide the implications of these findings on the real economy.

This study investigates how technological advances in self-insurance (or self-protection) affect the optimal level of self-insurance (or self-protection) and that of insurance, if insurance is also taken into account. Conditions are derived for determining the signs of changes in the optimal levels of decision variables due to improved technology. Two cross-derivatives are found to be the key factors. Classification of technological advances is suggested based on the two cross-derivatives. The results show that when analyzed pairwise, “neutral†technological advances, according to the classification, decrease the optimal level of self-insurance and that of insurance, but increase the optimal level of self-protection and that of insurance.

This paper presents a model where the ability to enjoy consumption gets impaired by disabilities over time. A continuous-time Markov chain model is constructed to examine how disability risk affects consumers' discounting of future utilities. It is shown that hyperbolic discounting arises for all future periods when disabilities occur independently. When the risks are interdependent, it is shown that hyperbolic discounting arises asymptotically as long as the hazard of disability increases with the set of possible disabilities.

This paper develops a theory of sequential lending in groups in micro-finance that centers on the notion of dynamic incentives, in particular the simple idea that default incentives should be relatively uniformly distributed across time. In a framework that allows project returns to accrue over time, as well as strategic default, we show that sequential lending can help resolve problems arising out of coordinated default, thus improving project efficiency vis-a-vis individual lending. Inter alia, we also provide a justification for the use of frequent repayment schemes, as well as demonstrate that, depending on how it is manifested, social capital has implications for project efficiency and borrower default. We next examine the optimal choices for the MFI and derive conditions for the optimality of the group lending arrangement. Our framework also provides for some plausible hypotheses as to why there has been a recent transition from group to individual lending.

The premise of this paper is twofold. First, people’s aspirations for their future wellbeing (or that of their children) aect their incentives to invest. Second, the experiences of others help shape one’s aspirations. This paper marries a model of aspirations-based choice with a simple theory of aspirations formation to study the relationship between aspirations and the distribution of income. Through its impact on investments, aspirations aect economic mobility and the income distribution, which in turn shape aspirations. Thus aspirations, income, and the distribution of income evolve jointly, and in many situations in a self-reinforcing way. We study the consequences of this model for income distribution as well as for growth rates over dierent quantiles of the distribution. We show that extreme equality is unstable. Moreover, when the same aspirations are shared in a society, polarization arises. The theory we propose captures both the complacency stemming from low aspirations and the frustration resulting from aspirations that are too high. As a result, for commonly held aspirations, growth rates have an inverted U-shape along the income distribution.

Emissions grandfathering holds that a history of emissions strengthens an agent's claim for future emission entitlements. Though grandfathering appears to have been influential in actual emission control frameworks, it is rarely taken seriously by philosophers. This article presents an argument for thinking this an oversight. The core of the argument is that members of countries with higher historical emissions are typically burdened with higher costs when transitioning to a given lower level of emissions. According to several appealing views in political philosophy (utilitarianism, egalitarianism, prioritarianism and sufficientarianism) they are therefore entitled to greater resources, including emission entitlements, than those in similar positions but with lower emissions. This grandfathering may play an especially important role in allocating emission entitlements among rich countries.

Policy commitment and credibility are important for inducing agents to make costly, irreversible investments. Policy uncertainty can delay investment and reduce the response to policy change. I provide theoretical and novel quantitative evidence for these effects by focusing on trade policy, a ubiquitous but often overlooked source of uncertainty, when a firm's cost of export market entry is sunk. While an explicit purpose of the World Trade Organization (WTO) is to secure long term market access, little theoretical and empirical work analyzes the value of WTO institutions for reducing uncertainty for prospective exporters. Within a dynamic model of heterogeneous firms, I show that trade policy uncertainty will delay the entry of exporters into new markets and make them less responsive to applied tariff reductions. Policy instruments that reduce or eliminate uncertainty such as binding trade policy commitments at the WTO can increase entry even when applied protection is unchanged. I test the model using a disaggregated and detailed dataset of product level Australian imports in 2004 and 2006. I use the variation in tariffs and binding commitments across countries, products and time, to construct model-consistent measures of uncertainty. The estimates indicate that lower WTO commitments increase entry. Reducing trade policy uncertainty is at least as effective quantitatively as unilateral applied tariff reductions for Australia. These results illuminate and quantify an important new channel for trade creation in the world trade system.

The aim of this note is to investigate the relationship between economic growth and mandatory retirement in an overlapping generations model where private investment in human capital is the engine of endogenous growth. We derive a novel result in the retirement-growth literature by showing that the relationship between the mandatory retirement age and economic growth is inverted U-shaped.

We show that quasi-hyperbolic discounting not only affects savings decisions but also the demand for insurance. In general, insurance demand by quasi-hyperbolic discounters is time-inconsistent. Without liquidity constraints they buy more insurance than initially planned. In the presence of binding liquidity constraints, hyperbolic discounters tend to revise their insurance demand downwards.

This paper aims to study the behavior of the average rational consumer of an economy populated by heterogeneous agents in a finite horizon framework. Heterogeneity takes into account both the subjective discount rate and risk aversion coefficient. Closed-form solutions for the optimal paths of consumption and capital, of the average consumer, are derived. Moreover, a closed form solution for the economic welfare of the average consumer is obtained.

This paper analyzes growth and wealth distribution in a simple AK model in which households are heterogeneous not only in time-preference but in intertemporal substitution. Contrary to the result without long-run growth, the most patient household does not always own the entire capital in an economy with perpetual growth. In addition, it is shown that, if the most impatient household has high intertemporal substitutability, it can own the almost all (but not entire) capital of the economy in the long-run.

The authors develop a theoretical model of underdevelopment whirlpools, conduct the analysis of economy development of Russia and the countries of Eastern Europe using the underdevelopment whirlpools methodic, and analysis of opportunities and prospects of economy development of Russia and the countries of Eastern Europe and work out recommendations for moving to qualitatively new level of economic growth and development, at which bridging the GDP growth gap in comparison with developed countries is obtained.

For most households, home ownership is the largest wealth component that has become more accessible through innovation and deregulation in mortgage markets. This paper studies the factors driving home equity withdrawal (HEW) at the household level using Dutch survey data. In the Netherlands, house prices were growing fast and mortgage expenses are to a large extent tax deductible. Expectations and perceptions do seem to play an important role in HEW. Withdrawers tend to be more positive about house price developments and – although having lower income – less concerned about their future economic situation. HEW can have a significant impact on both households and the economy, with most of the equity released being reinvested in the housing sector and only a small share used to finance consumption expenditure.

Degrowth cannot be realised from within a capitalist society, since growth is the sine qua non for capitalism. But, societies are no blank slates; they are not built from scratch. Putting these two thoughts together seems to make degrowth logically impossible. In this paper we argue that this paradox can be solved with the use of classical and contemporary concepts from the social sciences. We illustrate the use of these concepts with reference to studies on current practices and patterns of food production and consumption. The concept of social mechanism is used to illustrate how social practices can simultaneously reinforce and challenge the dominant (food) regime. We argue that current discussions on degrowth fail to envision how such contrasting developments are linked, and that the degrowth paradox originates in the idea of capitalism and the steady-state economy as alternative systems. The paradox dissolves with studies of mechanisms and social practices that show how the two systems are not autonomous, but 'hybridised' and come into existence and gain shape as reactions to each other.

This paper takes as a starting point William Ophul's claim that the last 450 years amount to an 'era of exception' in terms of resource availability. Ophuls suggests that it is no accident that this exceptional era of abundance coincides with the birth and development of liberalism - that liberalism, in other words, would not/could not have occurred without the conditions provided by this era of exception. Some of the ways in which this suggestion might be critically examined are discussed, and attention is drawn to one of its more interesting implications: if liberalism depends on abundance, what kind of political theory do we need if we are entering a new era of scarcity ('peak oil/peak everything')?

Degrowth is identified as a prospective turning point in human development as significant as the domestication of fire or the process of agrarianisation. The Transition movement is identified as the most important attempt to develop a prefigurative, local politics of degrowth. Explicating the links between capitalist modernisation, metabolic throughput and psychological individuation, Transition embraces 'limits' but downplays the implications of scarcity for open, liberal societies, and for inter-personal and inter-group violence. William Ophuls' trilogy on the politics of scarcity confronts precisely these issues, but it depends on an unconvincing sociology of individuation as a central process in modernity. A framework is advanced through which to explore the tensions, trade-offs and possibilities for a socially liberal, culturally cosmopolitan and science-based civilisation under conditions of degrowth and metabolic contraction.

Decroissance has established itself in Southern Europe as a significant and heterogeneous societal movement, which fosters a renaissance of traditional streams of thought in social and political philosophy while opening a field for new actualisations. While the term Decroissance can be traced back to an authorised translation of Georgescu-Roegen's 'declining state', the idea of Decroissance - as it is widely employed by social movements - encompasses more than the critique of GDP as a measure for well-being. It embodies a radical questioning of the way social reproduction is intended and frames a multifaceted vision for a post-growth society. The aim of this paper is the reconstruction and critical examination - from the point of view of social and political philosophy - of the main conceptual roots of Decroissance and its visions for a radical transformation of society.

Using regression discontinuity design we study a change in household consumption-related expenditures in Russia and compare it to the change in subjective measure of income adequacy at retirement. We find that both measures decline in response to retirement.

In predicting the impact of policies on macroeconomic variables, the government must consider the effect of household fertility choices on demographic trends, as macroeconomic variables can be influenced by population scale. Therefore, this paper presents a comprehensive survey of existing studies with endogenous fertility models and examines the effect of various policies on macroeconomic variables through simulation analysis based on the overlapping generations model (OLG) of Oguro et al. (2011), which determines population growth endogenously, with the growth rate affected by household fertility choices. Our results demonstrate a major effect on future population and public debt predictions studied in a scenario combining fiscal reform and introduction of child benefits.

This paper incorporates asymmetric inter-regional transportation costs into the two-region endogenous growth model in Martin and Ottaviano (1999) to investigate the growth effects of an increase in the cost of transporting goods from the Sough (North) to the North (South). We show that with local research and development spillovers, an increase in the transportation cost to the North (South) increases (decreases) the world growth rate through an increase (decrease) in the concentration of firms in the North.

The quest for real democracy is one of the components of sustainable degrowth. But the incipient debate on democracy and degrowth suffers from general definitions and limited connections to political philosophy and democracy theory. This article offers a critical review of democracy theory within the degrowth literature, taking as its focal point a relevant debate between Serge Latouche and Takis Fotopoulos. We argue that the core of their contention can be traced back to the relationship between the concepts of democracy and autonomy as defined by philosopher Cornelius Castoriadis, which both authors and generally the degrowth movement consider as one of their theoretical reference points. We show how both Latouche and Fotopoulos hold a misconception of Castoriadis' notions of autonomy, the social imaginary and politics, which in turn limits their cognisance of democracy and hence confuses their debate concerning the possibilities for a degrowth transition within the confines of a liberal parliamentary democracy. With a clarified theoretical understanding of the interconnected democracy-autonomy assemble, we proceed to an evaluation of the revolutionary potential of the degrowth movement and to a better understanding of a possible relationship between democracy and degrowth.

Despite the obvious connections between degrowth and a range of sister concepts (such as limits to growth and sustainable development), it is important to remember what is unique about the concept. The distinguishing feature of the concept of degrowth is that it brings attention to the nature and effects of growth. In classical economics, growth is associated with the healthy functioning of a free market economy. On these terms economic growth produces the profit motivation, is a requisite of effective market competition, and enables the most efficient distribution of economic goods and investment. Degrowth isolates the growth dynamic that infuses the modern world in order to consider the socio-ecological externalities that it produces. Beyond these intellectual endeavours, however, the degrowth movement is also responsible for thinking about how it might be possible to image a downsized world, which is not dependent on growth. In this context, the degrowth movement has forged strong connections with bio-regionalism, permaculture, Transition initiatives, and the Slow Food and Voluntary Simplicity movements. This special issue of Environmental Values introduces some of the latest thinking and key areas of debate that now define the field.

This paper considers an economy populated by heterogeneous individuals in two respects: both parameters representing the subjective discount and the risk aversion rates are supposed to have a joint distribution. That is, consumers differ in their level of anxiety for present consumption and their risk aversion rate. The utility index is of the negative exponential type. This research provides a closed-form optimal consumption path of the average infinite-lived agent. Finally, some comparative statics experiments are carried out.

Laibson (1997) suggests the present bias problem as one of the driving forces of excessive borrowing. Shefrin and Thaler (1988) suggest that self-control underlies national borrowing/savings rate. We conduct a survey with 65 people between the ages of 21 and 56 to check for present bias as well as self-control problems among individuals in Turkey using a quasi-hyperbolic discounting model. Our findings show that different income groups have similar discount factors, i.e., impatience levels, but very different degrees of dynamic inconsistencies, i.e. present bias levels. In particular, 32.2% of low-income individuals exhibit present bias whereas this is down to 5.9% for high-income individuals. This result does not depend on a particular assumption of a utility function. Using the parameters we elicit through the surveys, policymakers can design appropriate commitment devices for time-inconsistent individuals to ensure a sustainable level of aggregate saving and financial investment.

Degrowth is the literal translation of 'decroissance', a French word meaning reduction. Launched by activists in 2001 as a challenge to growth, it became a missile word that sparks a contentious debate on the diagnosis and prognosis of our society. 'Degrowth' became an interpretative frame for a new (and old) social movement where numerous streams of critical ideas and political actions converge. It is an attempt to re-politicise debates about desired socio-environmental futures and an example of an activist-led science now consolidating into a concept in academic literature. This article discusses the definition, origins, evolution, practices and construction of degrowth. The main objective is to explain degrowth's multiple sources and strategies in order to improve its basic definition and avoid reductionist criticisms and misconceptions. To this end, the article presents degrowth's main intellectual sources as well as its diverse strategies (oppositional activism, building of alternatives and political proposals) and actors (practitioners, activists and scientists). Finally, the article argues that the movement's diversity does not detract from the existence of a common path. Keywords:activist-led science;degrowth;limits to growth;political strategies;post-growth;social movements

This paper studies the relation between long-term economic growth and time preference of households in the context of a simple model of endogenous growth. We assume that the rate of time preference depends on the level of household's patience (stock of patience capital). It is assumed that the patience capital is accumulated by household's future-oriented investment and decumulated by consumption activities. The paper focuses on how the level of patience capital is determined in the balanced-growth equilibrium.

Under what conditions is service provision by donors and nonstate actors likely to undermine or strengthen citizensÕ legitimating beliefs? A new study assesses associations between donor and nonstate actor service provision and the sense of obligation that these associations produce for citizens to comply with tax authorities, the police, and courts. This note presents the studyÕs findings, which suggest that the provision of services by donors and nonstate actors is strengthening, rather than undermining, the relationship between citizens and the state.

This paper models the midlife crisis as a decision on whether and when to realize a life dream, incorporating the key components of three psychology theories of midlife crises. It explains why a crisis (dream realization) tends to occur in the midlife if it occurs at all. Other results include that one either realizes his dream fully or not at all, that a shorter life expectancy makes a midlife crisis more likely, and that “crazier†dreams tend to be postponed to a later time in life.

Why should anyone bother about social or environmental problems beyond responding to the signals in society to behave in an appropriate and caring manner towards others? This is a conundrum which has repeatedly surfaced and continues to resurface in the literature on environmental values and more generally in political theory. That is, what is the responsibility of the individual to society, others, the unborn, non-humans or inanimate Nature?

We compare levels of financial literacy in New Zealand with levels in five other countries and between the general adult population of New Zealand, people of Maori ethnicity and, more particularly, the people of Ngai Tahu, a Maori tribe based mainly in the South Island of New Zealand who have initiated a long-term savings scheme and are also providing financial education courses for members of their tribe. Our findings indicate that, while the financial knowledge level of Maori people generally is lower than for non-Maori (controlling for demographic and economic factors), there is little difference between the financial knowledge of the people of Ngai Tahu and other New Zealanders. Finally, the analysis finds financial literacy (defined as getting all three test questions correct) is not significantly associated with thinking about planning for retirement ‘a lot’, although it appears to be significant for other measures of financial achievement. This result could reflect the dominant role of New Zealand’s universal public pension in providing retirement income security.

The emergence of fiat money is studied in an environment in which exchange is organized around trading posts where many producers and shoppers are matched in a dynamic monopolistically competitive framework. Each household consumes a bundle of commodities and has a preference for consumption variety. Within this multiple matching structure we determine the endogenous organization of exchange between firms and shoppers and the means of factor payment (remuneration) as well as the price at which these trades occur. Although each household contacts many sellers, the specialization of tastes implies that the variety of the consumption basket under barter mediated exchange is sparser than that obtained under monetary exchange. We verify that the endogenous linkage of factor payments with the medium of exchange can lead to a monetary equilibrium outcome where only fiat money trades for goods, an ex-ante feature of cash-in-advance models. We also examine the long-run effects of money growth on the equilibrium pattern of exchange. A primary finding, consistent with documented hyperinflationary episodes, is that a sufficiently rapid expansion of money supply and inflation leads to the gradual emergence of barter. Under these circumstances sellers will accept both goods and cash payments whereas workers receive part of their remuneration in goods.

Rational offender models assume that individuals choose whether to offend by weighing the rewards against the chances of apprehension and the penalty if caught. While evidence indicates that rational theory is applicable to acquisitive crimes, the explanatory power for gratuitous non-fatal violent offending has not been evaluated. Lottery-type questions elicited risk attitudes and time preferences from respondents in a street survey. Admitted violent behaviour was predictable on the basis of some of these responses. Consistent with the rational model, less risk averse and more impatient individuals were more liable to violence. Such people were also more likely to be victims of violence. In line with a 'subjective' version of the rational model, respondents with lower estimates of average violence conviction chances and of fines were more prone to be violent.

Many of our actions will affect the welfare of future people. For instance, continued emissions of greenhouse gases (GHG) may lead to future environmental degradation, which will negatively affect people's lives. If we continue GHG-emissions, are we harming future people? In light of the non-identity problem, apparently, we are not. This article assesses three recent attempts (by Carter, Page and Kumar) at grounding concern for future generations in person-affecting moral theory. Although these attempts are promising, the conclusion is that none is completely successful. It seems, then, that we have reason to incorporate a limited measure of consequentialism into person-affecting morality. More precisely, I suggest that we should adopt a version of telic sufficientarianism.

The visibility of environmental problems and the increasing awareness of associated consequences have made environmental issues salient in Zambia. The purpose of this study was to investigate correlations between the social and psychological influences affecting college students in Zambia, and the behaviours perceived by them to be appropriately environmentally friendly. The underlying social and psychological factors that would determine individuals' attitudinal responses toward appropriate environmental behaviour were assessed. The study attempted to measure behavioural tendencies towards environmental conservation. Behaviour involving energy and water conservation (EW) was consistently rated as the most important, and appropriate category of environmental behaviour, whereas social and political action (SP) was viewed as the least favourable behaviour according to the respondents in Zambia. The respondents who were older in the graduate level of the study and had frequently contact with environmental education activities and courses were more likely to hold positive behavioural tendencies toward environmental conservation in general.

We present an experimental game in the p-beauty framework. Building on the definitions of boundary and interior equilibria, we distinguish between ‘speed of convergence towards the game-theoretic equilibrium' and ‘deviations of the guesses from the game-theoretic equilibrium'. In contrast to earlier findings (Güth et al., 2002), we show that (i) interior equilibria initially produce smaller deviation of the guesses from the game-theoretic equilibrium compared to boundary equilibria; (ii) interior and boundary equilibria do not differ in the timeframe needed for convergence; (iii) the speed of convergence is higher in the boundary equilibrium.

Galor and Moav (2004) argue that in the early stages of development, physical capital accumulation is the primary source of economic growth. Thus, inequality enhances growth by channeling resources towards individuals whose marginal propensity to save is higher. In later stages of development, physical capital is replaced by human capital as the engine of growth. Accordingly, equality alleviates the adverse effects of credit constraints on human capital accumulation and prompts the growth process. This paper attempts to test empirically the finding that the impact of income inequality on economic growth depends on the development stage. A threshold estimation technique, developed by Hansen (1999), is utilized for a panel of 70 countries for the period between 1970 and 1999. The estimation suggests that there is a statistically significant threshold income per capita, below which the coefficient on the relationship between inequality and growth is significantly negative and above which the estimate is positive, but not statistically significant.

The purpose of this paper is to present improved estimates of the intertemporal elasticity of substitution (IES) for Japan assuming a constant relative risk aversion (CRRA) utility function. The estimates of the IES we obtain range from 0.2 to 0.5 when we use quarterly consumption data and the Continuous Updating Estimator (CUE). We find that the IES is weakly identified when we employ the two-step GMM estimator, while the CUE can identify the IES. Moreover, we also find that using consumption data of different frequencies leads to quite different estimates of the IES.

We consider a small open Harris-Todaro economy with a rural foreign enclave and urban informal sector. We introduce consumption-efficiency relation to explain the simultaneous existence of informal sector and urban unemployment. Different types of immobility and mobility of capital are assumed in different sections of this paper. We also analyse the effects of expansion of foreign enclave on urban unemployment and on domestic factor income. In many cases, we get the results opposite to that obtained in the young-Miyagiwa model.

The paper investigates the effects of declining mortality on fertility and income in the standard OLG neoclassical growth model under the assumptions of accidental bequests as well as fully annuitised savings. It is shown whether and how different countries may expect increasing or decreasing fertility rates under increasing longevity, and argued that mortality decline may be another explanation of the Demographic Transition process. In particular, the fact that some countries have completed the process while others are entrapped in the second stage may depend on the initial level of mortality as well as on differences in technology and preferences. It is also argued that the third stage may not necessarily occur in some less developed countries even if their mortality rates converge towards those of industrialised countries.

The paper starts by reviewing some recent contributions on long waves, arguing that the present technological revolution in ICT is part of the broad phenomenon of a new long wave. It follows that the main focus of economic policy should be to support the diffusion of the new technology and to favour the institutional changes required by such an objective. Four broad guidelines are suggested: i) a Keynesian policy for demand going beyond the straitjacket of the Maastricht criteria and improving the income distribution in favour of employees; i) a policy to re-establish the primacy of productive capital through systematic concerted open market operations to regulate financial liquidity; iii) a reconstruction of the employment relationship that preserves the essential features of the "European social model" and a targeted flexibility of labour, that contrasts with the neoclassical all-out market flexibility; and iv) a regime for intellectual property rights that avoids the drawbacks--both ethical and economic--of current US practices. Paper originally published in the BNL Quarterly Review, vol. 57 n. 231, December 2004, pp. 395-437. JEL Codes: F3, G1, N1, B5, PSL Quarterly Review, vol. 62 nn.248-251 (2009)

In the paper we propose a new channel through which education may promote economic growth: education makes people more patient, and more patient people are more likely to save, invest, or send children to school. The paper first summarizes the results of field studies which we conducted in two very different poor countries: Uganda and India. In both countries the findings are consistent with the causal effect of education on the subjective discount rate. In the second part of the paper, we build a simple two-period human-capital-driven growth model where the subjective discount rate depends on the level of human capital. This new assumption gives rise to the possibility of multiple development regimes and the model illustrates a wider role of education in tackling possible development traps.

I show within a two-period overlapping generations model with income tax evasion that when the penalty rate set by the government is su¢ ciently small, it is theoretically possible for the capital stock to exceed the golden-rule level on the balanced-growth path. However, such a dynamic inefficiency cannot be guaranteed when the probability of evasion detection is nil.

Estimates of the marginal damage costs of carbon dioxide emissions suggest that, although climate change is a problem and some emission reduction is justified, very stringent abatement does not pass the cost-benefit test. However, current estimates of the economic impact of climate change are incomplete. Some of the missing impacts are likely to be positive and others negative, but overall the uncertainty seems to concentrate on the downside risks and current estimates of the damage costs may have a negative bias. The research effort on the economic impacts of climate change is minute and lacks diversity. This field of study should be strengthened, with a particular focus on the quantification of uncertainties; estimating missing impacts, estimating impacts in developing countries; interactions between impacts and higher-order effects; the valuation of biodiversity loss; the implications of extreme climate scenarios and violent conflict; and climate change in the very long term. I discuss these particular gaps in research, and speculate on possible sign and size of the impacts of climate change. © 2008 The White Horse Press.

Resume Differentes heuristiques ont ete avancees par les psychologues et les economistes afin de rendre compte des comportements sur les marches financiers. Elles soulignent les biais cognitifs qui affectent les croyances individuelles, et s’efforcent d’expliquer dans une certaine mesure les anomalies constatees sur les marches financiers. L’experimentation menee vise a tester les heuristiques de conservatisme, de representativite et d’ancrage-ajustement dans un contexte dynamique de quinze periodes : les sujets recoivent, a chaque periode, une information financiere et revisent individuellement leurs croyances quant a la qualite d’une entreprise. Les croyances observees s’averent incompatibles avec l’hypothese de revision bayesienne: les sujets ont tendance a surevaluer les petites probabilites et a sous-evaluer les fortes probabilites. L’heuristique de representativite est, de la meme maniere, invalidee : le traitement econometrique montre que les sujets sous-ponderent les signaux les plus intenses, preuve qu’ils ne tirent pas parti de leurs intensites informationnelles. Les hypotheses de conservatisme et d’ancrage-ajustement sont au contraire conjointement validees : les sujets sous-ponderent l’information nouvelle quand ils revisent leurs croyances mais ce comportement de revision est pleinement conditionne au fait que les sujets s’ecartent ou se rapprochent d’une valeur d’ancrage.Classification JEL : C11, C91, D8, D9.