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3A1831650444.jsonld | Chapter 4. Agglomeration Theory with Heterogeneous Agents | This chapter surveys recent developments in agglomeration theory within a unifying framework. We highlight how locational fundamentals, agglomeration economies, the spatial sorting of heterogeneous agents, and selection effects affect the size, productivity, composition, and inequality of cities, as well as their size distribution in the urban system. |
3A1831651793.jsonld | Chapter 11. Evolutionary Game Theory in Biology | This chapter reviews the origin and development of game-theoretic ideas in biology. It covers more than half a century of research and focuses on those models and conceptual advancements that are rooted in fundamental biological theory and have been exposed to substantial empirical scrutiny. The different areas of research—ranging from molecules and microbes to animals and plants—are described using informative examples rather than attempting an all-encompassing survey. |
3A730000508.jsonld | Review of Competition Law and Policy in Canada | Important issues in competition policy in Canada today are the independence and powers of the institutions and the balance between competition policy principles and national interests. The foundations of policy are being tested in merger litigation over the meaning of efficiency. Enforcement against cartels is complicated by a need to show that restraints are “undue.” Canada's “conformity continuum” offers an important, distinctive contribution to enforcement practice. Responses to controversies sometimes appear ad hoc, but the outcomes, such as the laws about banking mergers and about airlines, have recognised competition concerns. Policy options for consideration include finding other means to promote the goals now served by ownership controls, reviewing the scope of federal and provincial regulatory constraints on competition, clarifying the scope of the Commissioner's decision-making independence, and making enforcement more efficient by providing for private action, improving the decision process, and clarifying the anti-cartel principle. |
3A1831650703.jsonld | Chapter 10. Income Mobility | We survey the literature on income mobility, aiming to provide an integrated discussion of mobility within and between generations. We review mobility concepts, descriptive devices, measurement methods, data sources, and recent empirical evidence. |
3A1831634775.jsonld | Chapter 19. Technological Progress and Economic Transformation | Growth theory can go a long way toward accounting for phenomena linked with U.S. economic development. Some examples are: (i) the secular decline in fertility between 1800 and 1980, (ii) the decline in agricultural employment and the rise in skill since 1800, (iii) the demise of child labor starting around 1900, (iv) the increase in female labor-force participation from 1900 to 1980, (v) the baby boom from 1936 to 1972. Growth theory models are presented to address all of these facts. The analysis emphasizes the role of technological progress as a catalyst for economic transformation. |
3A730004783.jsonld | Business Dynamics and Policies | This study presents evidence on firm entry and exit, growth and survival derived with new data from Eurostat, covering nine European Union member countries. Cross-country and cross-industry patterns in firm entry rates are analysed with a special emphasis on detailed information and communication technology (ICT) related sectors, which has not been possible with previously available cross-country data. Firm entry rates turn out to be rather moderate in more mature industries... |
3A1831651556.jsonld | Chapter 26. African Migration | Factors shaping international migration, over the last half century, from and into the countries and territories of sub-Saharan and North Africa, as well as the economic and some social implications of those movements, are examined. Existing analyses of these issues are critically reviewed, including topics particularly pertinent to the African context and evidence on cross-cutting themes studied in the African context. The most recent data available on each aspect are summarized and fresh results, based on these data, are presented on several topics. |
3A1831639424.jsonld | Chapter 17 Labor-market frictions and employment fluctuations | The labor market occupies center stage in modern theories of fluctuations. The most important phenomenon to explain and understand in a recession is the sharp decline in employment and jump in unemployment. This chapter considers explanations based on frictions in the labor market. Earlier research within the real business cycle paradigm considered frictionless labor markets where fluctuations in the volume of work effort represented substitution by households between work in the market and activities at home. A preliminary section of the chapter discusses why frictionless models are incomplete — they fail to account for either the magnitude or persistence of fluctuations in employment. And the frictionless models fail completely to describe unemployment. The evidence suggests strongly that consideration of unemployment as a third use of time is critical for a realistic model. The two elements of a theory of unemployment are a mechanism for workers to lose or leave their jobs and an explanation for the time required from them to find new jobs. Theories of mechanism design or of continuous re-bargaining of employment terms provide the first. The theory of job search together with efficiency wages and related issues provides the second. Modern macro models incorporating these features come much closer than their predecessors to realistic and rigorous explanations of the magnitude and persistence of fluctuations. |
3A1831654768.jsonld | Chapter 63. Trade, Foreign Investment, and Industrial Policy for Developing Countries | In this chapter we explore the popular but controversial idea that developing countries benefit from abandoning policy neutrality vis-a-vis trade, FDI and resource allocation across industries. Are developing countries justified in imposing tariffs, subsidies, and tax breaks that imply distortions beyond the ones associated with optimal taxes or revenue constraints? We refer to this set of government interventions as industrial policy. We explore the theoretical foundation for industrial policy and then review the related empirical literature. We follow this with a broader look at the empirical work on the relationship between trade and FDI and growth. In this review we find no support for hard interventions that distort prices to deal with Marshallian externalities, learning by exporting, and knowledge spillovers from FDI. Nevertheless, we still envision an important role for what we refer to as soft industrial policy. The goal is to develop a process whereby government, industry and cluster-level private organizations can collaborate on interventions to increase productivity. We suggest programs and grants to help particular clusters by improving the formation of skilled workers, technology adoption, regulation and infrastructure. |
3A1831632993.jsonld | Chapter 53 Equilibrium Convergence in Normal Form Games | For all three types of one-dimensional games and their two-dimensional analogues, the states reliably achieve a loose behavioral equilibrium (BE) even within the first half-run of 5 periods. Most of the loose BE are also tight BE, the main exceptions occurring in two-dimensional games with unique Nash equilibria (NE). Most BE coincide with NE, and most of the observed NE are indeed evolutionary equilibria (EE). In general, the evolutionary treatments of mean-matching (MM) and feedback (Hist) appear to improve convergence to EE. Thus the main tendencies of the data are consistent with evolutionary game theory. All treatments are held constant within a run to test for convergence. Runs are separated by obvious changes in the player population and/or the payoff matrix, and the history box is erased at the beginning of a new run. |
3A73001956X.jsonld | Concessions | The OECD Competition Committee debated concessions in February 2006. Governments have long been engaged in providing goods or services to their citizens that could, in some form, be provided by the private sector. The trend over the past few decades, however, has been to transfer these functions, and the state-owned assets used to provide them, to private hands. The most common method, and the one usually preferred, is privatisation, or outright sale or transfer of ownership of the relevant assets to one or more private parties. Another method is concessions. Concessions are often viewed as a substitute for privatisation when the latter is not feasible for political or legal reasons. Concessions are not substitutes for regulation. Where there is a need for regulation, as in a situation of natural monopoly, a regulatory regime may be created along with the concession. |
3A1831641216.jsonld | Chapter 25 Terrorism: A Game-Theoretic Approach | This chapter surveys the past applications of game theory to the study of terrorism. By capturing the strategic interplay between terrorists and targeted governments, game theory is an appropriate methodology for investigating terrorism and counterterrorism. Game theory has been used to examine the interaction among targeted governments, the interface between factions within a terrorist organization, and the interplay between diverse agents (e.g., rival terrorist groups). This chapter identifies a host of externalities and their strategic implications for counterterrorism policies. In addition, the chapter indicates novel directions for applying game theory to terrorism-related issues (e.g., cooperative collectives to strengthen borders). For counterterrorism, we use normal-form games to distinguish proactive from defensive policies. Although both policy types can be represented with similar games, we identify essential strategic differences between these policy classes. When targeted governments must allocate resources among antiterrorism measures, there is generally a dominance of defensive over proactive countermeasures against transnational terrorism. The resulting outcome gives a suboptimal equilibrium. The policy prognosis is much better for domestic terrorism as a central government can internalize externalities among alternative targets. For transnational terrorism, dilemmas also arise when counterterrorism is investigated for continuous choice variables. Too much action is associated with defensive measures, while too little action is associated with proactive measures. This follows because defensive responses are strategic complements, while proactive responses are strategic substitutes for targeted governments. These same strategic concepts are crucial for understanding the interaction among political and military wings of a terrorist group. Game-theoretic notions also inform about interdependent security choices where the safety achieved by one at-risk agent is dependent not only on its precautions but also on those of other agents. Coordination games are particularly appropriate for analyzing the pitfalls of numerous aspects of international cooperation – for example, freezing terrorist assets and denying safe havens. We identify many roadblocks to effective international cooperation. For hostage negotiations, we show that the never-concede policy of governments hinges on at least five unstated assumptions that seldom hold in practice. Thus, even the staunchest proponents of the no-concession policy have reneged under the right circumstances. Ways to bolster adherence are indicated. The chapter also investigates the influence of asymmetric information when terrorists are better informed about the strength of the governments than the other way around. A model is put forward that unifies two alternative approaches based on the terrorists' preferences for revenge or resolution. Recent contributions involving asymmetric information and terrorism are discussed. |
3A1831631946.jsonld | Chapter 19 Intellectual Property Law | This chapter provides a comprehensive survey of the burgeoning literature on the law and economics of intellectual property. It is organized around the two principal objectives of intellectual property law: promoting innovation and aesthetic creativity (focusing on patent, trade secret, and copyright protection) and protecting integrity of the commercial marketplace (trademark protection and unfair competition law). Each section sets forth the economic problem, the principal models and analytical frameworks, application of economic analysis to particular structural and doctrinal issues, interactions with other legal regimes (such as competition policy), international dimensions, and comparative analysis of intellectual property protection and other means of addressing the economic problem (such as public funding and prizes in the case of patent and copyright law and direct consumer protection statutes and public enforcement in the case of trademarks). |
3A183163211X.jsonld | Chapter 8 Environmental Law | This chapter provides an economic perspective of environmental law and policy. We examine the ends of environmental policy, that is, the setting of goals and targets, beginning with normative issues, notably the Kaldor–Hicks criterion and the related method of assessment known as benefit–cost analysis. We examine this analytical method in detail, including its theoretical foundations and empirical methods of estimation of compliance costs and environmental benefits. We review critiques of benefit–cost analysis, and examine alternative approaches to analyzing the goals of environmental policies. We examine the means of environmental policy, that is, the choice of specific policy instruments, beginning with an examination of potential criteria for assessing alternative instruments, with particular focus on cost-effectiveness. The theoretical foundations and experiential highlights of individual instruments are reviewed, including conventional, command-and-control mechanisms, market-based instruments, and liability rules. Three cross-cutting issues receive attention: uncertainty; technological change; and distributional considerations. We identify normative lessons in regard to design, implementation, and the identification of new applications, and we examine positive issues: the historical dominance of command-and-control; the prevalence in new proposals of tradeable permits allocated without charge; and the relatively recent increase in attention given to market-based instruments. We also examine the question of how environmental responsibility is and should be allocated among the various levels of government. We provide a positive review of the responsibilities of Federal, state, and local levels of government in the environmental realm, plus a normative assessment of this allocation of regulatory responsibility. We focus on three arguments that have been made for Federal environmental regulation: competition among political jurisdictions and the race to the bottom; transboundary environmental problems; and public choice and systematic bias. |
3A1831642158.jsonld | Chapter 48 Stochastic games: Recent results | This chapter presents developments in the theory of stochastic games that have taken place in recent years. It complements the contribution by Mertens. Major emphasis is put on stochastic games with finite state and action sets. In the zero-sum case, a classical result of Mertens and Neyman states that given ε > 0, each player has a strategy that is ε-optimal for all discount factors close to zero. Extensions to non-zero-sum games are dealt with here. In particular, the proof of existence of uniform equilibrium payoffs for two-player games is discussed, as well as the results available for more-than-two-player games. Important open problems related to N -player games are introduced by means of a class of simple stochastic games, called quitting, or stopping, games. Finally, recent results on zero-sum games with imperfect monitoring and on zero-sum games with incomplete information are surveyed. |
3A730010805.jsonld | Counting Immigrants and Expatriates in OECD Countries : A New Perspective | Since the end of the 1990s, issues related to international migration, and more particularly to the international mobility of highly-qualified workers, are receiving increasing attention from policy-makers. This reflects among others the increasing international movements that have been taking place following the fall of the Iron Curtain and in conjunction with the growing globalisation of economic activity. In addition, demographic imbalances between developed and developing countries and large differences in wages have tended to encourage the movements of workers from economies where they are in surplus to those where they are most in need..... |
3A1831643847.jsonld | Chapter 57 Child Labor | In recent years, there has been an astonishing proliferation of empirical work on child labor. An Econlit search of keywords “child lab*r” reveals a total of 6 peer reviewed journal articles between 1980 and 1990, 65 between 1990 and 2000, and 143 in the first five years of the present decade. The purpose of this essay is to provide a detailed overview of the state of the recent empirical literature on why and how children work as well as the consequences of that work. |
3A730041735.jsonld | Policies, Institutions and Fertility Rates : A Panel Data Analysis for OECD Countries | Total fertility rates at, or below, replacement level characterise today 64 countries with populations totalling 44% of that of the world. Many of these countries have total fertility rates below 1.5 and some have recorded belowreplacement fertility rates for decades. |
3A1831653788.jsonld | Chapter 3. Overeducation and Mismatch in the Labor Market | This chapter surveys the economics literature on overeducation. The original motivation to study this topic reports that the strong increase in the number of college graduates in the early 1970s in the United States led to a decrease in the returns to college education. We argue that Duncan and Hoffman's augmented wage equation—the workhorse model in the overeducation literature—in which wages are regressed on years of overschooling, years of required schooling, and years of underschooling is at best loosely related to this original motivation. Next, we discuss how overschooling and underschooling at the level of individual workers have been measured, and what the incidence of overschooling and underschooling is. We then analyze in more detail Duncan and Hoffman's wage equation. We discuss the potential problems with it due to endogeneity and measurement error, and we review the results from earlier studies using this specification. We conclude that because of the issues concerning endogeneity and measurement error, the estimated returns to required/under/overschooling cannot be interpreted as causal. |
3A1831643537.jsonld | Chapter 14 Health and nutrition | Health and nutrition are important as ends in themselves and often are emphasized as critical components of basic needs in developing countries. Cross-country comparisons of standard data suggest that on the average health and nutrition in the developing world falls considerably short of that in the developed world. The chapter presents a review on a number of issues regarding health and nutrition in developing countries and available studies on the determinants of health and nutrition and on their impact on productivity in developing countries. First, the chapter presents a theoretical framework and some issues pertaining to the empirical representation of health and nutrition. The chapter then presents a survey on existing studies of both health and nutrition determinants and on their productivity influence and conclude with some discussion of policy issues and directions for future research. A theoretical framework for the determinants of health and nutrition and their possible productivity impacts is essential to analyze these variables in an organized manner and to be able to interpret empirical studies. The chapter discusses micro production function and demand considerations. The chapter then discusses in brief the supply side and macro relations. Finally, several major econometric problems are reviewed, stating that they are ubiquitous in empirical studies attempting to relate health, nutrition, and socioeconomic variables. Two broad categories of studies of health determinants are of particular interest: those attempting to estimate the reduced-form demand for health outcomes and health-care goods, and those attempting to estimate the underlying health production function. |
3A1831647788.jsonld | Chapter 24 The theory of optimal taxation | This chapter discusses that the central element in the theory of optimal taxation is information. Optimal tax theory began with Ramsey, who solved the problem of raising revenue by commodity taxes from a single consume. It has been assumed that lump-sum taxation, as it happens quite unnecessarily, looks at optimal pricing by public enterprises subject to a budget constraint. Work on discount rates for public investment during the sixties often implicitly assumed imperfections, such as absence of lump-sum taxation. Many-consumer economy has been introduced without lump-sum taxes, stated, and proved the efficiency theorem. The chapter provides a discussion of existence and a case where the optimum can be obtained explicitly. The treatment of lump-sum taxation as based on individual information is related to the work on signaling and screening. A special case of nonlinear taxation, with extensive results and numerical calculations, has also been discussed in the chapter. |
3A1831632071.jsonld | Introduction to the Series | The series Handbooks in Economics produce books for various branches of economics, each of which is a definitive source, reference, and teaching supplement for use by professional researchers and advanced graduate students. Each book provides self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists on various aspects of this branch of economics. These surveys summarize not only received results but also newer developments, from recent journal articles and discussion papers. Some original material is also included, but the main goal is to provide comprehensive and accessible surveys. |
3A183165315X.jsonld | Chapter Eight. Cost Effectiveness and Payment Policy | Cost-effectiveness analysis is versatile and used widely to assist in health care decision making. This chapter discusses how cost-effectiveness analysis is used at the system or national level, particularly in the domain of coverage and payment policy. We describe its relationship to other techniques, such as cost/benefit analysis, and the theoretical and practical aspects of applying the analytic technique in a decision framework. We then discuss the diverse ways that it is now used in various settings around the world, and the ways that it might be used in the future. |
3A1831635690.jsonld | Chapter 11 Intertemporal asset pricing theory | This is a survey of the basic theoretical foundations of intertemporal asset pricing theory. The broader theory is first reviewed in a simple discrete-time setting, emphasizing the key role of state prices. The existence of state prices is equivalent to the absence of arbitrage. State prices, which can be obtained from optimizing investors' marginal rates of substitution, can be used to price contingent claims. In equilibrium, under locally quadratic utility, this leads to Breeden's consumption-based capital asset pricing model. American options call for special handling. After extending the basic modeling approach to continuous-time settings, we turn to such applications as the dynamics of the term structure of interest rates, futures and forwards, option pricing under jumps and stochastic volatility, and the market valuation of corporate securities. The pricing of defaultable corporate debt is treated from a direct analysis of the incentives or ability of the firm to pay, and also by standard reduced-form methods that take as given an intensity process for default. This survey does not consider asymmetric information, and assumes price-taking behavior and the absence of transactions costs and many other market imperfections. |
3A1831635224.jsonld | Chapter 16 Creativity and the Behavior of Artists | Creativity is a basic human trait that comes into play in a variety of contexts, including the production of art. It relates to the capacity of individuals to think inventively and imaginatively and to go beyond traditional ways of solving problems. In this chapter we consider various definitions of creativity and proceed to consider theories and models of creativity that endeavor to characterize both the creative individual and creative modes of thought. Next, we examine some of the ways in which creativity has been brought into economic analysis. We then turn to the central concern of the chapter, namely modeling the creative process in the arts. Our consideration of the issue leads us to propose an approach in which the creative choice by artists is viewed as an optimization decision with respect to ‘creative effort’, given the artists' perceptions of what ‘the market’ and what ‘the artworld’ care about. In the penultimate section we discuss the relationship between creativity and talent in an empirical context, using recent data on artists' attitudes and behavior. The chapter ends with some conclusions and suggestions for further research. |
3A1831649241.jsonld | Chapter Thirteen. Kenneth Arrow on Social Choice Theory | Kenneth Arrow founded the modern form of social choice theory in a path-breaking contribution at the middle of the twentieth century. The editors of the Handbook of Social Choice and Welfare other than Arrow begin this final volume by noting the continuing need to read Arrow's decisive contribution in his epoch-making book Social Choice and Individual Values , which started the contemporary round of research on social choice theory. This chapter also includes an interview that Kenneth Arrow gave to Professor Jerry Kelly a few years ago, which was published in Social Choice and Welfare . This presents Arrow's thinking on the subject as it developed because of his own pioneering contribution. Finally, this chapter also includes some new observations by Arrow, The Classification of Social Choice Propositions, dealing particularly with the distinction between normative and descriptive statements in social choice theory. These notes, which Arrow has written for this volume at a very difficult time for him, reflect inevitably in a highly compressed form, some recent thoughts of the founder of the discipline on an important methodological issue in social choice theory. |
3A183164780X.jsonld | Chapter 22 Social choice theory | This chapter discusses the social choice theory. There is social choice problems, which deals with methods of marshalling information, particularly those relating to the people involved, to arrive at correct social judgments or acceptable group decisions. But the natures of the possible informational inputs vary, as do the required outputs of judgments, decisions, or the required means of settlement. The balance of moral and pragmatic considerations also varies with the nature of the exercise. There are other differences, for example, whether the procedures permit the use of discretion in interpreting individual utilities or are mechanical. The nature of the exercise affects the appropriate specification of the social choice format. This relates to distinctions among structures such as social welfare functions, social decision functions, social choice functions or functional collective choice rules, or social welfare functional. It also affects the appropriateness of particular axioms within a given structure, for example, whether the social welfare function satisfies the independence condition or what types of interpersonal comparability if any is used. The relevance of the various results presented and discussed depends on the particular nature of the exercise to which application is sought. |
3A1831632403.jsonld | Chapter 110 Social Heuristics | Some of the most challenging decisions faced by humans and other social species are those arising from an environment comprising the decisions of conspecifics. The particular demands of social environments such as the necessity of responding quickly to decisions made by others, coordinating mutual decisions, and detecting cheaters call for heuristics that make rapid decisions rather than spend time gathering and processing information over a long period during which a fleeter-minded competitor could leap forward and gain an edge. Socially rational agents can solve the adaptive challenges that face them in their interactions with conspecifics without amassing all available information and combining it optimally (as shown by the single-cue parental investment heuristics) and without calculating costs and benefits to guide search (as shown by the satisficing heuristics for mate search). They need not even follow the laws of propositional logic (as shown by the domain-specific cheater-detection reasoning results). |
3A1831654547.jsonld | Chapter 4. On Formulating and Solving Portfolio Decision and Asset Pricing Problems | This chapter discusses computational methods for approximating portfolio and asset pricing problems. Formulation of these problems is usually specified along with components, preferences, payoffs, etc., that are analytic functions. This implies that the solutions to these problems acquire this property, so that these solutions can be accurately approximated by polynomials within a specified region. It is also possible to obtain a uniform upper bound for the approximation error within a subset of this region. Sections 2 and 3 address each problem in discrete time, while Sections 4 and 5 examine these problems in continuous time. |
3A1831634406.jsonld | Chapter 11 Does Learning to Add up Add up? The Returns to Schooling in Aggregate Data | The theoretical, conceptual, and practical difficulties with the use of cross-national data on schooling are so severe using aggregate data for any purpose for which individual level data would do should be avoided. There are, however, three questions for which the use of cross-national data on schooling could potentially help answer interesting questions for which individual data is insufficient. First, do differences in the evolution and dynamics of schooling help explain the big facts about the evolution and dynamics of output growth? Largely, no. Second, the existence and magnitude of output externalities to schooling is an important question with possible normative policy implications, and evidence for externalities requires at least some level of spatial aggregation. Does the cross-national data provide support for output externalities? Largely, no. Third, cross-national (or more broadly spatially aggregated) data allows the exploration of the impact on returns to schooling (or in the gap between private and social returns) of differences in economic environments. This last question seems a promising line for future research. |
3A1831642840.jsonld | Chapter 6 Theories of oligopoly behavior | The study of oligopolistic industries lies at the heart of the field of industrial organization. The belief of an individual about the behavior of large firms in concentrated markets colors the individual's views on a broad range of antitrust and regulatory policies. These beliefs derive in turn from theory and evidence of oligopolists' behavior. This chapter presents and evaluates the primary competing theories of oligopolistic behavior. The chapter clarifies the way oligopoly theory has, and has not, progressed in the 150 years since Cournot developed his theory. Although oligopoly fits conceptually between the extremes of monopoly and perfect competition, its study requires a rather different set of toolsthat is, those of game theory. The hallmark of oligopoly is the presence of strategic interactions among rival firms, a subject well suited for game-theoretic analysis. The chapter presumes a working knowledge of such concepts as Nash equilibrium and subgame perfect equilibrium. |
3A730010104.jsonld | Nuclear New Build : New Nuclear Law? | In April 2009, 61 states and seven international organisations with a total of 808 participants and observers convened in Beijing at an international ministerial conference, organised by the International Atomic Energy Agency (IAEA) in co-sponsorship with the Nuclear Energy Agency of the Organisation for Economic Co-operation and Development (OECD/NEA), to deal with nuclear energy in the 21st century.1 In his concluding statement, the president of that conference stressed that “the conference recognizes the positive momentum towards nuclear power and the decisions by many developed and developing states to pursue the use of nuclear energy”.2 According to the Director General of the IAEA, more than 60 countries declared their interest in launching nuclear power programmes. |
3A1831633604.jsonld | Chapter 23 Strong reciprocity and the welfare state | We explore the contribution of reciprocity and other non selfish motives to the political viability of the modern welfare state. In the advanced economies, a substantial fraction of total income is regularly transferred from the better off to the less well off, with the approval of the electorate. Economists have for the most part misunderstood this process due to their endorsement of an empirically implausible theory of selfish human motivation. Drawing on anthropological, experimental, public opinion survey and other data we develop an alternative behavioral explanation for economic reasoning about sharing and insurance. In this alternative view, reciprocity motives are necessary for understanding support for and opposition to the welfare state. Modern citizens willingly share with those who uphold societal norms about what constitutes morally worthy behavior, while frequently seeking to punish those who transgress those norms, even when these actions are individually costly and yield no individual material benefit. |
3A1831643545.jsonld | Chapter 13 Education investments and returns | This chapter focuses on schooling, as an investment with market returns is not intended to detract from the importance of education as a public good and as a source of consumption benefits, but rather to review how economic concepts and statistical methods have recently progressed in quantifying the roles of education in economic development. This chapter surveys a small part of the extensive literature on the linkages among education, productivity, and development, and assesses several areas where concerted research might clarify important issues and potentially change policies. This chapter presents an economic interpretation of this educational explosion. Most of the growth in public expenditures on education is attributed to increases in growth of real income per adult. The chapter describes the expansion of the world's educational system both in terms of its inputs of public and private resources and its output of students, and then estimates how income, price, and population constraints appear to govern this process. The chapter presents a contrast on causal frameworks proposed to explain the relationship between education and productivity, and discusses sources of data to measure the relationship and discriminate among causal interpretations. The chapter reviews evidence on the market returns to schooling measured for entrepreneurs and employees, men and women, and migrants and nonmigrants. The chapter also presents the evidence of schooling's effects on nonmarket production. The chapter discusses the policy issues for development that arise from the apparent effects of education on economic productivity and the mechanisms used to finance and manage the educational system. |
3A1831635283.jsonld | Chapter 10 Censorship versus Freedom of Expression in the Arts | Whether in ancient Rome or in the modern United States, censorship has existed in every society at every age. Art that challenges the strongly held beliefs of any society – whether those be political, ideological, religious, or otherwise – causes offense and creates pressure for censorship. At the same time, almost every society has found value in the existence of visual art. What limitations on censorship should be made for the sake of artist value, or more broadly freedom of expression? “Artistic merit” and “offensiveness” are nebulous concepts lacking in objectivity, shifting with the tastes of society at any given time. Yet the value of art to society, both positive and negative, cannot be doubted. In modern American society, with its heterogeneous tastes, the tension between the two concepts becomes especially vivid. Given the divergent and unpredictable tastes of society, the fact that destroying a work permanently removes it from future generations, and considering censorship's dreadful history, the decision to censor is one appropriately made with caution. But neither can it be said that a work should never be censored, for art can and does cause offense, and even a society as diverse as ours will find consensus at the extremes. Rather, striking the appropriate balance calls ultimately for good judgment. In making this judgment, what is the appropriate role of the law and the courts? Those who think of the law as purely objective will desire the courts to either forbid all governmental interference with art, or to themselves abstain from interfering with political decisions on art. But these approaches place legal purity above reality, and make the impossible attempt to divorce law from its social context. The problem of relativism that inheres in the balance between artistic merit and offensiveness in fact exists in every legal controversy. The necessary public respect for our courts is unlikely to be undermined by a cautious display of good judgment, even if the judgment is inherently subjective and involves art causing offense to elements of our society. |
3A1831647753.jsonld | Chapter 27 Organization design | This chapter discusses an assortment of recent economic studies in the same way: as steps toward characterizing those organization designs that do well, according to some measure of gross performance, with the informational and administrative resources they require. The steps turn out to be diverse and modest, but the problem is difficult. Piecing the assorted contributions together, one is still far indeed from a unified theory of efficient organization design. The main stumbling block remains the modeling of technology and cost. Some elements of cost have been studied intensively and even elegantly. The chapter examines the Shannon theory in connection with transmission, and the theory of finite-state machines in connection with the assignment of output/state pairs to input/state pairs in one-step designs with memory. Techniques have been developed for the study of a design's gross performance, for example, the computation of expected payoff for a given team information structure, and these remain useful in efficiency studies when good cost models become available. The theory, even in its present form, has already been useful in revealing how difficult it is (1) to define certain widely current terms sharply and agreeably to most usages and (2) to verify certain widely held conjectures. |
3A729995844.jsonld | National Legislative and Regulatory Activities | BELARUS The Statute on the State Supervision in the Field of Nuclear Safety and Radiation Protection (2008) Amendment to the Law on Radiation Protection of the Public (2008) Environmental impact assessment laws (2009) The Statute on the Discussion of Questions of the Public in the Field of Atomic Energy (2009) BELGIUM Decree regarding the minimum criteria for X-ray apparatus use in veterinary medicine (2009) Decree of the Federal Agency for Nuclear Control on the determination of exemption levels (2009) ESTONIA National Development Plan (2009) New Radiation Safety Department (2009) Amendment to the Radiation Protection Act (2009) GERMANY Ordinance on the Shipment of Radioactive Waste or Spent Fuel (2009) Amendments to Acts and Ordinances on the Transport of Dangerous Goods (2009) Amendments to the 1961 Foreign Trade Act and 1993 Foreign Trade Ordinance (2009) ITALY Law No. 99 of 23 July 2009 including provisions on the resurgence of nuclear energy (2009) ROMANIA Decision on the prohibition of dangerous labour for children (2009) Amendment to the regulations on the organisation and operation of CNCAN (2009) Decision on the repatriation of nuclear material to the Russian Federation (2009) Decision on the processing of uranium stocks (2009) General requirements on environmental impact assessment (2009) SPAIN Regulation on the transboundary shipments of radioactive waste and spent fuel (2009) Regulation on installation and use of X-ray devices for medical diagnostic purposes (2009) UNITED ARAB EMIRATES Federal law on the peaceful use of nuclear energy (2009) UNITED STATES Final regulations criminalising unauthorised introduction of dangerous weapons (2009) |
3A1831641828.jsonld | Chapter 14 The core in perfectly competitive economies | This chapter presents the results on the cores of perfectly competitive exchange economies, that is economies in which the endowment of each agent is negligible on the scale of the whole economy. In the contributions of Edgeworth, Debreu and Scarf, and Aumann, the conclusion is: the core (in Aumann's case) or the intersection of the cores of all replicas (in the other cases) coincides with the set of Walrasian equilibria. One of the key elements of the Debreu and Scarf argument, the equal treatment property that permitted one to collapse the cores of all the different replicas into the same space, does not generalize even to sequences with different numbers of traders of the various types. The strong statement that the core (in Aumann's continuum setting) or the intersection of the cores (in the Debreu and Scarf replica setting) coincides with the set of Walrasian equilibria is simply not true in the case of general sequences of finite economies. Weaker forms of convergence must be substituted. Convexity of preferences, which plays no role whatever in Aumann's theorem, is seen to make a crucial difference in the form ofconvergence in large finite economies. The type of convergence that holds depends greatly on the assumptions on the sequence of economies. The various possibilities can best be thought of as lying on four largely (but not completely) independent axes: the type of convergence of individual consumptions to demands, the equilibrium nature of the price at which the demands are calculated, the degree to which the convergence is uniform over individuals, and the rate at which convergence occurs. |
3A1831634236.jsonld | Chapter 21 The Courts and Public School Finance: Judge-Made Centralization and Economic Research | This paper explores for economists how the school-finance litigation movement, which began with Serrano v. Priest in 1971, ought to be characterized in economic models. Its primary message is that this has become a national movement, not one confined to individual states. Economists should be wary of characterizing these cases as discrete events in which a state that loses to reform-minded plaintiffs is distinctly different from a state that succeeds in defending its system. I describe numerous instances in which states have attempted to head off defeat in the courts by conceding to reform-demands by the plaintiffs. School finance litigation does make a difference, however. Win or lose, states have been induced to reformulate their state-aid formulas. I show that the most common of these reforms, which focus on differences in tax-base per pupil, have altered the local tax price for education. This alteration causes the “property rich” districts to pay more for education. However, the correlation between “property rich” and “income rich” is essentially zero, largely because low-income communities are more willing to tolerate the nonresidential uses that lower their tax price. The result is that school-finance reform in most states is likely to reduce the efficiency of local public education because of tax-price distortion but not improve the lot of low-income students and taxpayers in any systematic way. |
3A1831653311.jsonld | Chapter 1. What Do We Learn From Schumpeterian Growth Theory? | Schumpeterian growth theory has operationalized Schumpeter’s notion of creative destruction by developing models based on this concept. These models shed light on several aspects of the growth process that could not be properly addressed by alternative theories. In this survey, we focus on four important aspects, namely: (i) the role of competition and market structure; (ii) firm dynamics; (iii) the relationship between growth and development with the notion of appropriate growth institutions; and (iv) the emergence and impact of long-term technological waves. In each case, Schumpeterian growth theory delivers predictions that distinguish it from other growth models and which can be tested using micro data. |
3A1831638479.jsonld | Chapter 7 Human capital: Education and agriculture | This chapter presents a review and synthesis of effects of education in agriculture, summarizes major contributions, and suggests major research gaps in the literature. Although growth in knowledge enables skill acquisition and specialization of labor, which generally raises labor productivity, and technical change, the dominant effect on agriculture has been technical change. A puzzle remains why schooling does not have broader direct impacts in agriculture. Furthermore, as we proxy education or general intellectual achievement by schooling in our empirical research, this has led to biased interpretations of impacts when general intellectual achievement of school graduates changes over time and perhaps in nonlinear ways. |
3A1831632039.jsonld | Subject Index of Volume 1 | This chapter lists the terms that have contributed to the book Handbook of Law and Economics Volume 1 , such as ability-based taxation, accidental harms, activity level, and others. For the ease of the reader, these terms have been mentioned along with the page numbers in which they have appeared in the book. |
3A73002718X.jsonld | The Telecommunications Sector in Russia | In some ways, the Russian telecommunications industry is a paradox. Parts of the industry are highly competitive – the number of operators in this market is in the thousands – but the existing regulatory regime is weak, particularly in ensuring access to essential facilities, and the longdistance market is dominated by the company Rostelecom. In spring 2001, experts from OECD countries met with senior Russian officials to discuss their experiences with regulatory reform in telecommunications. The issues discussed include tariff reform, promoting universal service and ensuring access to non-competitive services. Traditionally, in Russia, prices for local fixed telephone service have been held very low, leading to a shortage of supply and significant cross-subsidies from long-distance services. The cross-subsidies from long-distance services are being eroded by new entry, leaving local operators unable to expand the network to meet demand. As in other Russian industries, tariff rebalancing is essential, while putting in place programmes to ensure access to telecommunications services in remoter areas. Competition could be deepened and broadened through a stronger and more effective system of access to the remaining non-competitive services such as local loops. |
3A1831638061.jsonld | Chapter 33 The incidence of agricultural policy | This chapter first discusses what economists mean by “the incidence of agricultural policy” and why we care about it. Then it reviews models of the determinants of the differential incidence of different policies among interest groups such as suppliers of factors of production, consumers, middlemen, taxpayers, and others. Results are represented in terms of Marshallian economic surplus, and surplus transformation curves. After reviewing the results from standard models under restrictive assumptions, certain assumptions are relaxed in order to analyze the effects of imperfect supply controls, variability, cheating and imperfect enforcement of policies, and the dynamics of supply. |
3A1831642557.jsonld | Chapter 1 The transactions role of money | The transaction role of money is one of the most palpable of economic phenomena and offers one of the first challenges for the theory of exchange. A useful analogy can be made between the role of money as a record-keeping device and the theory of signaling. The chapter discusses that the theory of exchange was developed as a response to the challenges of price determination and allocation of resources. The frictions required for monetary exchangesuch as differential costs of spot and forward transactions and the strategic issues of incomplete information and incentive compatibilityare recent developments. It explains the slow growth of the transaction role of money as a branch of the theory of exchange. The transaction role of money challenges the implicit logistical and informational assumptions of the theory of exchange. The sequential nature of trade makes informational demands that go beyond the knowledge of prices that suffices in the traditional theory of exchange. The chapter also examines the rationale behind the transaction role of money in a model exhibiting this dichotomy. Exploring the properties of models in which budget enforcement problems are always a binding constraint on behavior helps illuminate the understanding of macroeconomics. |
3A729989372.jsonld | Highlights of Recent Trends in Financial Markets | Over the past few months, prices in major financial markets have remained strong despite further oil price increases. After major equity markets had shown a soft spot around March and April, they regained their upward trend in the second quarter. Terrorist attacks in London in July and the hurricane Katrina in the United States which hit the New Orleans region at the end of August did not disrupt markets, despite the large size of human, economic and insured losses associated with the latter event. |
3A183163743X.jsonld | Chapter 7 Regional and multiregional economic models: A survey | This chapter reviews a concise survey and a set of reflections concerning current regional and multiregional economic models. The notation current refers to the situation around the mid-1980s. A number of reviews of multiregional economic models undertaken in the first half of the 1980s forms the primary input for this survey. The chapter provides the use of such models. Three kinds of uses are envisaged: forecasting and scenario generation, policy impact analysis, and policy generation or design. Thus, the type of regional and multiregional economic models that are given attention in the chapter are used for decision-making support. Regional economic modelsto be usefulneed to pass both relevance and validity tests. The relevance test addresses the issue of modeling for specific situations or adhering to theoretical stringency. Policy-makers are often keen on detailed, but partial and simple models. Adaption mechanisms in a model are often not appreciated. The validity issue is related to the role of regional data for economic model building. Data problems make estimation and validation, especially of dynamic models, a problem in a regional context. This is a serious threat to the success of regional economic models for policy purposes, particularly in the current , generally less stable, economic environments. |
3A183163564X.jsonld | Chapter 16 Are financial assets priced locally or globally? | We review the international finance literature to assess the extent to which international factors affect financial asset demands and prices. International asset-pricing models with mean-variance investors predict that an asset's risk premium depends on its covariance with the world market portfolio and, possibly, with exchange rate changes. The existing empirical evidence shows that a country's risk premium depends on its covariance with the world market portfolio and that there is some evidence that exchange rate risk affects expected returns. However, the theoretical asset-pricing literature relying on mean-variance optimizing investors fails in explaining the portfolio holdings of investors, equity flows, and the time-varying properties of correlations across countries. The home bias has the effect of increasing local influences on asset prices, while equity flows and cross-country correlations increase global influences on asset prices. |
3A1831651416.jsonld | Chapter 4. The Economic and Cultural Value of Paintings: Some Empirical Evidence | A long-standing debate in the economics of art and culture is concerned with the adequacy or otherwise of the theory of value in economics to capture a full representation of the value of cultural phenomena. At a theoretical level it has been proposed that a distinct form of value is embodied in or yielded by cultural goods and services that is related to, but not synonymous with, the goods’ economic value. This form of value, termed cultural value, is congruent with the concepts of the value of art works that are discussed in aesthetics and the philosophy of art. Although the parallel existence of economic and cultural value can be proposed in theory, there is little or no empirical evidence to support a proposition that they are distinct phenomena or to explore the possible relationship between them. This chapter asks whether an economic assessment of the value of some cultural good will fully capture all relevant dimensions of the commodity’s cultural value or whether there will be some components of cultural value that remain resistant to monetary evaluation. We also ask whether it is possible to identify separate concepts of individualistic and collective value for cultural goods as expressed by an individual, where the former relates solely to the person’s own utility and the latter to some more disinterested view of value to the community or society in general. We illuminate these two areas with the aid of empirical evidence derived from a survey assessing consumer reactions to a group of paintings. |
3A183165380X.jsonld | Chapter 1. Personality Psychology and Economics | This chapter explores the power of personality traits both as predictors and as causes of academic and economic success, health, and criminal activity. Measured personality is interpreted as a construct derived from an economic model of preferences, constraints, and information. Evidence is reviewed about the “situational specificity” of personality traits and preferences. An extreme version of the situationist view claims that there are no stable personality traits or preference parameters that persons carry across different situations. Those who hold this view claim that personality psychology has little relevance for economics. The biological and evolutionary origins of personality traits are explored. Personality measurement systems and relationships among the measures used by psychologists are examined. The predictive power of personality measures is compared with the predictive power of measures of cognition captured by IQ and achievement tests. For many outcomes, personality measures are just as predictive as cognitive measures, even after controlling for family background and cognition. Moreover, standard measures of cognition are heavily influenced by personality traits and incentives. Measured personality traits are positively correlated over the life cycle. However, they are not fixed and can be altered by experience and investment. Intervention studies, along with studies in biology and neuroscience, establish a causal basis for the observed effect of personality traits on economic and social outcomes. Personality traits are more malleable over the life cycle compared with cognition, which becomes highly rank stable around age 10. Interventions that change personality are promising avenues for addressing poverty and disadvantage. |
3A1831640392.jsonld | Introduction to the series | The aim of the Handbooks in Economics series is to produce Handbooks for various branches of economics, each of which is a definitive source, reference, and teaching supplement for use by professional researchers and advanced graduate students. Each Handbook provides self-contained surveys of the current state of a branch of economics in the form of chapters prepared by leading specialists on various aspects of this branch of economics. |
3A730029352.jsonld | The Review Conference Mechanism in Nuclear Law : Issues and Opportunities | Over the past several decades the international community has increasingly come to rely on periodic multilateral conferences or meetings: 1) as a means for reviewing implementation of a wide variety of legal instruments, including those addressing nuclear non-proliferation, safety, waste management, physical protection and security. Also, the parties to some instruments that do not explicitly mandate review meetings have decided to conduct de facto review meetings to enhance implementation. Although the structure and procedures of these meetings differ in some particulars, they reflect a number of common objectives, organisational arrangements and procedures. This paper seeks to assess the major issues arising from reliance on the review conference; 2) mechanism as a measure for enhancing the effectiveness of multilateral legal instruments, particularly those in the nuclear field. In view of the perceived failure of the 2005 Review Conference of the Parties to the Treaty on the Non-Proliferation of Nuclear Weapons and the need to avoid a similar result at the upcoming 2010 Review Conference, it is hoped that this analysis will provide a timely – and possibly even useful – “review” of the review conference mechanism. |
3A1831638185.jsonld | Chapter 26 Applied general equilibrium analysis of agricultural and resource policies | This chapter reviews the literature on applied general equilibrium analysis of agricultural and resource policies. It begins with a historical overview, followed by an assessment of the benefits of this methodology for examining sectoral policies. The chapter then turns to questions of disaggregation of commodities, households, regions and factors of production. Parameter specification and model closure are discussed, as well as problems of modeling policies which affect agriculture. There are also special sections on agriculture and the environment, product differentiation and imperfect competition, and model validation. The chapter closes with a discussion of future challenges to the field. |
3A1831641631.jsonld | Chapter 29 Game theory models of peace and war | This chapter discusses the game theory models of peace and war. Game theory's relevance to peace and war was controversial from the start. The debate has continued up to the present day, but it has been conducted mostly in the abstract, with critics trying to prove a priori that game theory is inapplicable. Some aspects of international relations (IR) game theory discussed in the chapter are game analyses of specific international situations; the debate on realism and international cooperation; international negotiations; models of arms building, deterrence, and signaling resolve; the myth that game theory shaped nuclear-deterrence strategy; first-strike stability, and the outbreak of war, escalation; alliances; and arms-control verification. Game-theoretical studies of verification are divided into two groups. The first involves decisions about allocating inspection resources or a quota of inspections limited by treaty. The second asks whether to cheat and whether to accuse in the face of ambiguous evidence. The chapter also discusses military game theory. |
3A1831631865.jsonld | Subject Index of Volume 2 | This chapter lists the terms that have contributed to the book Handbook of Law and Economics, Volume 2 , such as abandonment, access pricing, administrative law, and others. For the ease of the reader, these terms have been mentioned along with the page numbers in which they have appeared in the book. |
3A1831642646.jsonld | Chapter 22 Economic perspectives on the politics of regulation | This chapter discusses the three themes of economics research on regulation. The first and oldest deals with market failures and the corrective actions that government can undertake to ameliorate them. The second examines the effects of regulatory policies and asks whether government intervention is efficient or more efficient than doing nothing. The third investigates the political causes of regulatory policy. The motivation arises from the disjointness in the first two areas of research: regulation as practiced commonly has been found to be inefficient and to adopt methods that do not appear to be the best choices for tackling their associated market failures. The chapter presents an interpretative survey of the third category of research. It focuses on research that employs the conceptual model and methods of economicsthat is, it assumes rational, goal-directed behavior by all relevant agentsthat uses economic theoretic discussions to make predictions about political behavior and, where relevant, that employs the methods of testing theoretical hypotheses that economists commonly employ. Regardless of the motives of political actors, an essential ingredient to a theory of regulatory policy when the Coase Theorem fails is the way political officials control agencies. Whether the aim of regulation is to maximize efficiency or to transfer wealth to a special interest, politicians face a principal agent problem in trying to assure reasonable bureaucratic compliance with the objectives behind a legislative mandate. |
3A1831647664.jsonld | Chapter 25 Technology and trade | This chapter discusses some aspects of technology and its impact on trade and economy. It provides a unified and synthetic treatment of various models so that their common elements can be appreciated and their essential distinguishing features can be understood. This chapter is divided into four sections. The first one reviews the literature that takes technology as exogenous and examines the implications of productivity differences for trade patterns and the effects of technical change on outputs and welfare. Sections 2 and 3 treat dynamic models in which the evolution of technology is endogenous. In Section 2, technological progress is viewed as an accidental byproduct of production activities, while in Section 3 it results from deliberate investment. The various sub-sections explore the implications of alternative assumptions about the form of industrial innovation and the nature of technological spillovers. The last section presents a discussion of the effects of trade and industrial policies, of trade based on imitation in a setting of imperfectly-protected intellectual property rights, and of direct foreign investment and international licensing as vehicles for technology transfer. |
3A1831644673.jsonld | Chapter 15 Job search and labor market analysis | The theory of search is an important young actor on the stage of economic analysis. It plays a major part in a dramatic new field, the economics of information and uncertainty. By exploiting its sequential statistical decision theoretic origins, the search theory has found success by specializing in the portrayal of a decision-maker who must acquire and use information to take rational action in an ever changing and uncertain environment. Although the search theory's specific characterizations can now be found in many arenas of applied economic analysis, most of the theory's original roles are found in the labor economics literature. This chapter reviews the search theory's performances to date in labor market analysis. In a given population of labor force participants, the steady state fractions that are unemployed are equal to the product of the average frequency and duration of unemployment spells. The data sources reveal that unemployment spells are typically frequent but short in all phases of the business cycle, although counter-cyclic increases in both frequency and duration contribute to the well-known time series behavior of unemployment rates. |
3A1831653141.jsonld | Chapter Nine. Competition in Health Care Markets | This chapter reviews the literature devoted to studying markets for health care services and health insurance. There has been tremendous growth and progress in this field. A tremendous amount of new research has been done since the publication of the first volume of this Handbook. In addition, there has been increasing development and use of frontier industrial organization methods. We begin by examining research on the determinants of market structure, considering both static and dynamic models. We then model the strategic determination of prices between health insurers and providers where insurers market their products to consumers based, in part, on the quality and breadth of their provider network. We then review the large empirical literature on the strategic determination of hospital prices through the lens of this model. Variation in the quality of health care clearly can have large welfare consequences. We therefore also describe the theoretical and empirical literature on the impact of market structure on quality of health care. The chapter then moves on to consider competition in health insurance markets and physician services markets. We conclude by considering vertical restraints and monopsony power. |
3A1831637847.jsonld | Chapter 53 Fertilizers and other farm chemicals | Demand for fertilizer in developing countries has expanded at a rapid rate over the past forty years. The relative scarcity of agricultural land has been a major underlying cause of this expansion in demand. More proximate causes include the development of complementary Green Revolution technologies – high yielding, fertilizer responsive seed varieties and expansion of irrigation or better water control within irrigated systems. At the same time, real fertilizer prices have declined over time, driven by technical change in fertilizer production. Expansion of fertilizer consumption has been particularly high in many Asian countries, and particularly low in much of Sub-Saharan Africa, where infrastructural and institutional constraints have restricted use. Pesticide use has also expanded in developing countries, albeit in more localized circumstances. Relative scarcity of agricultural labor has been one cause of increased herbicide demand. Disease pressure and the availability of disease-resistant cultivars have influenced insecticide and fungicide demand. Integrated pest management (IPM), over the past 20 years, and genetically modified crops, over the past five to ten years, are new technologies that have the potential to curb the growth in pesticide use. Price policies, environmental policies, and related investments in agricultural research and development, infrastructural expansion, or education all influence the markets for fertilizer and other farm chemicals in developing countries. One major policy issue is how to reduce or eliminate fertilizer subsidies at the same time that measures are taken to increase demand in areas such as Sub-Saharan Africa where fertilizer use is below the social optimum. At the same time, in intensive agricultural systems where agricultural chemical use is high, resource degradation and human health risks from pesticide use compromise productivity growth. In areas of both high and low use of chemical inputs, meeting the production and environmental challenges of the future will require increasing reliance on knowledge-intensive technology. |
3A183164892X.jsonld | Chapter 13. Collective Invention and Inventor Networks | Collective invention occurs when competing organizations share knowledge about the design and development of new technologies. Such exchange and circulation of ideas and practices among communities of inventors was relatively common in the nineteenth century, most notably in geographically localized industrial districts. This collective system of innovation was eclipsed in the early and mid-twentieth century by the rise to prominence of the large corporate R&D lab. Recent decades, however, have seen the decline of stand-alone, internal corporate labs and the resurgence of collective efforts by networks of inventors, distributed across organizations and spanning distant locations. We draw on literatures in economics, innovation studies, management, and sociology to posit explanations for this recent rise. Suggestive additional evidence is provided from comparative analyses of patent data from the 1970s and the present decade. |
3A73000354X.jsonld | Explaining Waiting-time Variations for Elective Surgery Across OECD Countries | Waiting times for publicly-funded elective surgery are a major health policy concern in many OECD countries (like Australia, Canada, Denmark, Finland, Ireland, Italy, the Netherlands, New Zealand, Norway, Spain, Sweden, and the United Kingdom), but are not a concern in others (like Austria, Belgium, France, Germany, Japan, Luxembourg, Switzerland, and the United States). This paper contains a comparative analysis of these two groups of countries. It is found... |
3A1831635186.jsonld | Chapter 20 Rockonomics: The Economics of Popular Music | This chapter considers economic issues and trends in the rock and roll industry, broadly defined. The analysis focuses on concert revenues, the main source of performers' income. Issues considered include: price measurement; concert price acceleration in the 1990s; the increased concentration of revenue among performers; reasons for the secondary ticket market; methods for ranking performers; copyright protection; and technological change. |
3A183163273X.jsonld | Chapter 79 Field-test Elicitations of Demand for Public Goods | A large group of experimentalists have analyzed the nature of free riding in the context of so-called public exchanges, a laboratory device for investigating the consequences of various aspects of non-rivalry in consumption related to voluntary public goods. However, there have been few attempts to identify and test practicable mechanisms for implementing consumer power over public-good decision making in real-world settings as a means of observing the extent of free riding in such contexts. Although it is difficult to speculate on the nature of an equilibrium state of such information, it was presumed that certain incentives to misrepresent WTP would be widely known and talked about, and that the organizers of the referendum would try to counter these incentives by referring to the duties' of citizens participating in this kind of public process and/or the meaninglessness of conducting referenda of this type if voters simply gave in to such incentives. |
3A1831643987.jsonld | Chapter 37 Technological change and technology strategy | This chapter addresses questions that are primarily microeconomic in nature. Investment is required to accomplish a particular technological change, which depends critically on two things: (1) the degree of external participation in its accomplishment, and (2) the internal technological capability acquired through previous investments in technology. Technology policy is made by public bodies at the international, national, and regional levels. Private enterprises and individuals also make policy, largely by responding to incentive systems established by public policy makers. The chapter discusses policy options for international and multilateral agencies, as well as for national governments. A methodology for addressing issues concerning externalities and spillover should be widely applied. Studies of foreign suppliers and domestic purchasers of technology add to the understanding of motivation and behavior. Distributional problems usually deal with policy instruments that do not affect the overall pace of technological development. |
3A1831638444.jsonld | Chapter 10 Agricultural finance: Credit, credit constraints, and consequences | The theory and methods used to analyze the market, management, and policy elements of agricultural finance draw substantially on modern finance concepts, but with significant tailoring to the unique characteristics of agricultural sectors throughout the world. Both developed and developing economies are considered in this chapter. Discussed in detail are lender-borrower relationships, financial growth and intertemporal analysis, portfolio theory and financial risk, investment analysis, the financial structure of agriculture, and private and public sector suppliers of financial capital. Other key issues involve the linkages between investment and finance, and the extent of credit rationing in agriculture. |
3A1831653567.jsonld | Chapter 21. Monetary Policy Regimes and Economic Performance : The Historical Record, 1979–2008 | This chapter updates the Bordo and Schwartz chapter in Volume 1A of the Handbook of Macroeconomics to 2008. |
3A73003447X.jsonld | New partnerships in development co-operation | Alongside the member countries of the OECD’s Development Assistance Committee (DAC), many other countries provide assistance to developing nations. These can be grouped into three categories: emerging donors, providers of South-South co-operation and Arab donors. Together, they accounted for USD 11.8 billion of global development co-operation in 2009, which is roughly 8% of total aid flows. Their own development achievements and different approaches to development co-operation make them an important force in the global effort to achieve the Millennium Development Goals. The DAC is seizing on its new opportunities for international partnerships for development. In opening its doors, it embraces diverse approaches and experiences in development co-operation. It also welcomes global dialogue on how to make international development co-operation as effective as possible. |
3A1831645483.jsonld | Chapter 8 The taxation of natural resources | This chapter discusses the possible effects that resource taxation may have on the timing and scale of resource development, emphasizing the potential conflicts between revenue-raising and economic efficiency. The chapter discusses the main issues that arise in the taxation and regulation of natural resources. Since natural resources are frequently owned or controlled by governments, as well as being subject to a variety of conventional taxes, the scope of the chapter must extend beyond conventional tax forms, since various royalties, rentals, bonus bids, direct government participation, and regulations are often used in combination with conventional taxes. Some attention must also be paid to overlapping jurisdictions, as natural resources are frequently the subject of taxation by more than one government, sometimes by different countries, since natural resource products are frequently traded goods. The chapter discusses fisheries, forests, mining, oil and natural gas, and hydro-electricity. |
3A1831637987.jsonld | Chapter 41 Food security and the world food situation | The major food projection agencies see per capita food supplies continuing to increase and real prices of foodstuffs continuing to decline. This trend in food prices has made, and will continue to make, achievement of food security possible for a greater proportion of the world's population. Therefore, projections of an impending or even distant global imbalance between population and food supplies are seen as unfounded. The major problems in the food supply system are either man-made (bad policies) or can be corrected through institutional developments. In particular, increasing water supplies will be difficult and costly; but much can be done to make the use of existing supplies more efficient. Water is too often unpriced to farmers and other users; despite the political difficulties, this has to change. Establishing long-term, secure access to land for farmers is the most urgent need in many developing and transition countries and will make a significant contribution to their food security as well as to global self-sufficiency. |
3A1831647958.jsonld | Chapter 12 Duality approaches to microeconomic theory | This chapter develops the duality between cost and production functions. The chapter derives the regularity conditions that a cost function C must have and shows how a production function is constructed from a given cost function. The chapter considers the duality between a (direct) production function F and the corresponding indirect production function G. Under certain regularity conditions, G can also completely describe the technology, and thus there is a duality between direct and indirect production functions. The duality theorems have two interpretations: one in the producer context and the other in the consumer context. The chapter discusses a variety of other duality theoremsthat is, other methods for equivalently describing tastes or technology, either locally or globally, in the one-output, N-inputs context. The mathematical theorems presented in the chapter appear to be only theoretical results devoid of practical applications. However, this is not the case. The chapter also surveys some of the applications of the duality theorems developed earlier. These applications fall in two main categories: (1) the measurement of technology or preferences and (2) the derivation of comparative statics results. |
3A1831640678.jsonld | Chapter 6. Models of Financial Stability and Their Application in Stress Tests | We review heterogeneous agent models of financial stability and their application in stress tests. In contrast to the mainstream approach, which relies heavily on the rational expectations assumption and focuses on situations where it is possible to compute an equilibrium, this approach typically uses stylized behavioral assumptions and relies more on simulation. This makes it possible to include more actors and more realistic institutional constraints, and to explain phenomena that are driven by out of equilibrium behavior, such as clustered volatility and fat tails. We argue that traditional equilibrium models and agent-based models are complements rather than substitutes, and review how the interaction between these two approaches has enriched our understanding of systemic financial risk. After presenting a brief summary of key terminology, we review models for leverage and endogenous risk dynamics. We then review the network aspects of systemic risk, including models for the three main channels of contagion: counterparty loss, overlapping portfolios, and funding liquidity. We give an overview of applications to stress testing, including both microprudential and macroprudential stress tests. Finally, we discuss future directions. These include a better understanding of dynamics on networks and interacting channels of contagion, models with learning and limited deductive reasoning that can survive the Lucas critique, and practical applications to risk monitoring using models estimated with the massive data bases currently being assembled by the leading central banks. |
3A730033910.jsonld | Prosecuting Cartels without Direct Evidence of Agreement | Circumstantial evidence is employed in cartel cases in all countries. The better practice is to use circumstantial evidence holistically, giving it cumulative effect, rather than on an item-by-item basis. Complicating the use of circumstantial evidence are provisions in national competition laws that variously define the nature of agreements that are subject to the law. There are two general types of circumstantial evidence: communication evidence and economic evidence. Of the two, communication evidence is considered to be the more important. Economic evidence is almost always ambiguous. It could be consistent with either agreement or independent action. Therefore it requires careful analysis. National treatment of cartels, such as whether they are prosecuted as crimes or as administrative violations, can affect the burden of proof that applies to the cases, and hence the use of circumstantial evidence. It can be difficult to convince courts to accept circumstantial evidence in cartel cases, especially where the potential liability for having violated the anti-cartel provisions of the competition law is high. There are circumstances in countries that are relatively new to anti-cartel enforcement that could affect the extent to which they rely on circumstantial evidence in their cases. |
3A1831644207.jsonld | Preface to the handbook | Modem labor economics has continued to grow and develop. The subject matter of labor economics continues to have at its core an attempt to systematically find empirical analyses that are consistent with a systematic and parsimonious theoretical understanding of the diverse phenomenon that make up the labor market. As before, many of these analyses are provocative and controversial because they are so directly relevant to both public policy and private decision making. In many ways the modern development in the field of labor economics continues to set the standards for the best work in applied economics. The European Association of Labour Economists, formed well before its American rival, has become the largest and most active organization of its kind. It seems likely that the explosive growth in the development and study of modem labor economics throughout the world will be a major development that will continue throughout the next decade. |
3A1831654709.jsonld | Chapter 68. Property Rights and Economic Development | This chapter develops a unified analytical framework, drawing on and extending the existing literature on the subject, for studying the role of property rights in economic development. It addresses two fundamental and related questions concerning the relationship between property rights and economic activity. (i) What are the mechanisms through which property rights affect economic activity? (ii) What are the determinants of property rights? In answering these, it surveys some of the main empirical and theoretical ideas from the extensive literature on the topic. |
3A1831650754.jsonld | Chapter 5. Polarization | This chapter reviews the basic conceptual foundations for the measurement of polarization, the origins of those foundations, how polarization is distinct from inequality and other ways of considering distances and differences across individuals, and how polarization can be measured in an economic, a social, and a hybrid socioeconomic perspective. The chapter focuses largely on concepts and measurement, with only cursory overviews both of the empirical polarization literature and of the theoretical polarization/conflict literature. The chapter distinguishes five types of polarization: income polarization (where the polarizing variable of interest is any one-dimensional cardinal variable), income bipolarization (the extent to which a population is polarized across two separate groups lying on either side of an income median), social polarization (for cases in which variables of interest are qualitative or have no particular cardinal content), socioeconomic polarization (where some income groups split along social characteristics), and multidimensional polarization (where identity and distances/alienation are measured by several variables of interest). |
3A1831637928.jsonld | Chapter 45 The Role of International Agricultural Research in Contributing to Global Food Security and Poverty Alleviation: The case of the CGIAR | Considering the deep pessimism about the limits to growth that prevailed throughout much of the 60s and early 70s, the rapid growth in food crop productivity and food supplies triggered by the Green Revolution was a remarkable achievement. The driving force behind this success was the application of modern science for enhancing food crop productivity, particularly in the favorable production environments. The CGIAR played a crucial role in adapting scientific knowledge to the conditions of developing countries as well as in coordinating international efforts in transferring technologies across national boundaries. Implicit in the CGIAR mission was, and still remains today, a primary focus on the production of international public goods (IPGs), i.e., goods that are non-exclusive in access and non-rival in use, and that have widespread applicability, i.e., of potential use beyond national boundaries. This chapter focus on the origins, evolution and major accomplishments of the CGIAR and its partners in meeting global food security and poverty reduction goals, and highlights the challenges facing the CGIAR in the decades ahead. Particular attention is paid to the existing evidence on the diffusion and impacts of CGIAR products and to the evidence on the rates of return to international agricultural research investments. The broader impacts of the CGIAR on poverty and food security are discussed. The chapter ends with a discussion of the future need for and the challenges facing the CGIAR. |
3A1831643839.jsonld | Chapter 58 Extended Family and Kinship Networks: Economic Insights and Evolutionary Directions | What do we know about the role of extended families and kinship networks for redistributing resources? What gaps in our knowledge most need to be filled? How can we best organize current work and identify priorities for future research? These questions are important for several reasons: households in developing countries depend on friends and relatives for their livelihood and sometimes their survival; help exchanged within extended families and kin networks affects the distribution of economic well-being, and this private assistance and exchange can interact with public income redistribution. Yet despite rapid recent progress there remain significant deficiencies in our understanding of the economics of extended families. Researchers confront a large and sometimes bewildering array of findings. We review and assess this literature by starting with an emphasis on standard economic concerns, most notably the possible interaction between government-provided social insurance and private kinship networks. Our review of the evidence suggests that the specter of complete “crowding out,” whereby introduction or expansion of public transfers merely supplants private transfers, appears quite remote, though not impossible. However, numerous studies do suggest partial – but nonetheless substantial – crowding out, on the order of a 20-to-30-cent reduction in private transfers per dollar increase in public transfers. But the range of estimated effects is exceedingly wide, with many studies suggesting little private transfer response at all. Reconciling and explaining these disparate findings is a priority for future research. Theorizing about the economics of families should move beyond its concentration on income effects. The empirical literature indeed indicates that non-economic variables, such as age and gender, can have a powerful association with private transfers. We suggest that economists tap into the extensive non-economic literature that takes an evolutionary approach to the family. We show that this literature provides valuable guidance for modeling the effects of age, sex and relatedness in the interactions among extended family members. The evolutionary literature has much to offer economists interested in family behavior by proposing novel interpretations of existing findings and pointing out new and fruitful directions for future research. We encourage economists to pay more attention to this approach when studying kinship networks. |
3A1831652145.jsonld | Chapter 2. Two Centuries of International Migration | This chapter provides an overview of trends and developments in international migration since the Industrial Revolution. We focus principally on long-distance migration to rich destination countries, the settler economies in the nineteenth century and later the OECD. The chapter describes the structure, direction, and determinants of migration flows and the assimilation experience of migrants. It also examines the impact of migration on destination and source countries, and explores the political economy behind the evolution of immigration policy. We provide an historical context for current debates on immigration and immigration policy and we conclude by speculating on future trends. |
3A1831648997.jsonld | Chapter 6. University Research and Public–Private Interaction | Universities’ centrality within the public research systems has been increasing over time, as it has their interactions with industry. Such interaction poses two dilemmas. One concerns individual scientists and the potential trade-off between basic research activities and those activities required to successfully develop and commercialize academic inventions. The second dilemma occurs at the system level, and it has to do with the tension between the industry’s need to rely upon clear and solid intellectual property rights (IPRs), and the cumulativeness of the scientific enterprise, which requires the results of academic research to be freely accessible. The empirical literature suggests that the first dilemma may not be as dramatic as expected by many. On the contrary, some evidence exists on the relevance of the second dilemma: commercial interests may exacerbate common threats to the commonality of research efforts; and the existence of IPRs over academic research results may discourage some scientists to build upon those results in order to advance knowledge. Existing bridging institutions, both internal and external to universities, seem to give only marginal contributions to the solution of both dilemmas. |
3A1831634740.jsonld | Chapter 22. A Global View of Economic Growth | This paper integrates in a unified and tractable framework some of the key insights of the field of international trade and economic growth. It examines a sequence of theoretical models that share a common description of technology and preferences but differ on their assumptions about trade frictions. By comparing the predictions of these models against each other, it is possible to identify a variety of channels through which trade affects the evolution of world income and its geographical distribution. By comparing the predictions of these models against the data, it is also possible to construct coherent explanations of income differences and long-run trends in economic growth. |
3A183163208X.jsonld | Chapter 11 International Law | This chapter reviews and synthesizes the work of economists and law and economics scholars in the field of public international law. The bulk of that work has been in the area of international trade, but many of the ideas in the trade literature have implications for other subfields. Recent years have seen a significant increase in research on other topics as well. The paper begins with a general framework for thinking about the positive and normative economics of public international law, and then proceeds to a treatment of specific topics including customary law, strategic alliances and the laws of war, international trade, international investment, international antitrust, human rights law, conflicts of law, and the international commons (fisheries). |
3A1831644010.jsonld | Chapter 34 Human resources: Empirical modeling of household and family decisions | This chapter reviews recent advances in the empirical literature on the role that households and families play in investing in human resources. It describes the estimation of reduced form demands for human capital, particularly education and health. Special attention is paid to the measurement and interpretation of the impact of household resources, particularly parental education, income, and impact of community resources, namelyprices and infrastructure. The process underlying the production of human capital is discussed. The chapter also discusses the difficulties in measuring inputs and input quality, and associated issues of estimation and interpretation. The chapter focuses on evidence regarding the influence of family background, school quality, ability, and self-selection. Models of household behavior in a dynamic setting are reviewed. The chapter discusses extensions to the model that is concerned with the flow and allocation of resources across and within households as well as to extensions that treat household boundaries as fluid. |
3A730005119.jsonld | The Universal Legal Framework Against Nuclear Terrorism | After the events of September 11, the United Nations Security Council adopted Resolution 1373 (2001) which has been called the “Counter-Terrorism Code” of the world, because it creates legal obligations for all 192 Member States of the United Nations. |
3A1831638525.jsonld | Chapter 2 Uncertainty, risk aversion, and risk management for agricultural producers | Uncertainty and risk are quintessential features of agricultural production. After a brief overview of the main sources of agricultural risk, we provide an exposition of expected utility theory and of the notion of risk aversion. This is followed by a basic analysis of agricultural production decisions under risk, including some comparative statics results from stylized models. Selected empirical topics are surveyed, with emphasis on risk analyses as they pertain to production decisions at the farm level. Risk management is then discussed, and a synthesis of hedging models is presented. We conclude with a detailed review of agricultural insurance, with emphasis on the moral hazard and adverse selection problems that arise in the context of crop insurance. |
3A183163385X.jsonld | Chapter 3 Altruistic Behavior and Altruistic Motivations | Altruism can be understood in a behavioral or in a psychological sense. Motivationally, altruism is the desire to enhance the welfare of others at a net welfare loss to oneself. Behaviorally, altruism is any act that could have resulted from altruistic motivations. The economic literature shows many examples of how altruistic behavior can be generated from self-interested motivations, in iterated games or in reputation-building. The chapter provides further categories and examples, notably from political behavior. Two main examples are taken from the debates at the Federal Convention in 1787 and the elections to the Estates-General in France in 1789. In addition, it is argued that altruistic acts may be caused by the emotions of the agents, notably pride and shame. A distinction is drawn between acts whose performance is conditional on seeing what other agents are doing, corresponding to quasi-moral norms of fairness or reciprocity, and acts whose performance is conditional on being observed by other agents, corresponding to social norms. The operation of quasi-moral norms is observed in experiments where subjects engage in one-shot anonymous interactions. Many subjects not only display cooperative and generous behavior, but are willing to spend resources on punishing those who do not. Since A's punishment of B may induce B to behave cooperatively with C in later interactions, it can be seen as an altruistic act. Experiments by Ernst Fehr and co-workers suggest that the motivation for such altruistic punishment may be non-altruistic, being related instead to a warm glow effect. Whether this conclusion is valid for more general forms of reciprocity, such as the tendency for A to punish B when he observes B harming C, remains to be seen. Throughout the chapter there is an attempt to trace the origin of these ideas back to writers such as Montaigne, Descartes, Pascal, Hume and Kant. |
3A1831641348.jsonld | Chapter 15 Economics of defense R&D | This chapter examines a number of aspects of defense R&D, including: mechanisms — design competitions, and independent R&D subsidies — used by the US government to encourage firms to invest their own funds in defense R&D; theory and evidence concerning both the private and social benefits of, or returns to, R&D conducted by defense contractors; the effect of defense R&D on nondefense R&D investment; the response of government decision-makers to cost information yielded by defense R&D; and the dynamic optimality of R&D projects. |
3A729992659.jsonld | Energy Security and Competition Policy | The OECD Competition Committee debated energy security and competition policy in February 2007. This roundtable examined the links between competition policy and energy security, with a focus on natural gas. The discussion began by addressing the questions of the meaning and importance of energy security; and the determinants of energy security, particularly as they relate to competition policy. It continued in dealing with gas supply, transportation, and distribution, addressing five aspects that relate to different aspects of energy security: (1) the role of substitutes for natural gas in fostering competitive gas supply; the role of regulation in promoting or inhibiting infrastructure investment; (2) how to promote an adequate level of infrastructure investment; (3) the role of unbundling in fostering competition and promoting energy security; (4) the role of storage capacity in system efficiency and buyer bargaining position; (5) and the determinants of entry into merchant sales of natural gas. |
3A73002914X.jsonld | Global SIFIs, Derivatives and Financial Stability | This paper looks at Global Systemically Important Financial Institutions (GSIFIs) and the global derivatives business. The derivatives business has grown exponentially versus global GDP in sharp contrast to the primary securities on which derivatives are based. Inter-connectedness risk and unconstrained potential leverage remain the most urgent tasks still facing the financial reform process. Concentrated oligopolistic derivatives markets and the ability of banks to shift promises and/or use their IRB models to estimate ex-ante risk capital – capital that might be needed in the event of a crisis – undermine the intent of financial reform. Nor do netting and clearing eliminate aggregate risk of losses and bankruptcy. The paper repeats the need to implement two of the OECD’s long-standing reform recommendations: a binding leverage ratio based on equity and the separation of high risk investment banking activities from traditional banking. A derivatives transactions tax is also put forward as a possible option that would counter the cross-subsidisation of risk from the too-big-to-fail (TBTF) problem. |
3A1831630761.jsonld | Chapter 3. Assessing Managerial Ability: Implications for Corporate Governance | A manager's current and potential future employers are continually assessing her or his ability. Such assessment is a crucial component of corporate governance and this chapter provides an overview of the research on that aspect of governance. In particular, we review how assessment generates incentives (both good and bad), generates risks that must be faced by both managers and firms, and affects the contractual relationships between those parties in important ways. Assessment (or learning) proves a key perspective from which to study, evaluate, and possibly even regulate corporate governance. Moreover, because learning is a behavior notoriously subject to systematic biases, this perspective is a natural avenue through which to introduce behavioral and psychological insights into the study of corporate governance. |
3A729987876.jsonld | Social Protection and Growth | Public social expenditure accounts for 25 per cent of GDP, or even more in some countries. That expenditure on this scale has some effect on growth seems very likely, but the direction of the effect is disputed by different schools of thought. Using new data sources and panel data econometric techniques, this paper sheds new light on the issue. Evidence is found in favour of the proposition that more social expenditure reduces growth. However, “active” social spending, including active labour market policies, make work pay policies and spending on family services, appears to have the opposite effect and may be growth-enhancing. |
3A1831644630.jsonld | Chapter 19 The economics of strikes | This chapter discusses the prospects for constructing a theoretical explanation of strike activity and reviews the evidence that strikes are systematically related to other economic variables. The economic analysis of strikes begins with the Hicks Paradox: it is impossible to build a bargaining model in which each side behaves optimally but the outcome is not Pareto optimal. This paradox can be circumvented in several ways. It is assumed that only one side behaves optimally. The joint cost theory treats bargaining as a black box, and it is assumed that there is a tendency toward Pareto optimal outcomes, which is stronger when strikes are more expensive. The private information theory is based on the idea that strikes are Pareto optimal after all, when incentive-compatibility constraints are taken into account. It is difficult to assess the extent of empirical knowledge on economic aspects of strikes. |
3A1831634961.jsonld | Subject Index | This chapter lists the terms that have contributed to the book Handbook of Economics of Art and Culture , such as ability bias, administrative burdens, appellation of origin, and others. These terms have been mentioned along with the page numbers in which they have appeared in the bookfor the ease of the reader. |
3A1831654717.jsonld | Chapter 67. Aid and Conditionality* | This chapter examines the conditions under which foreign aid will be effective in raising growth, reducing poverty, and meeting basic needs in areas such as education and health. The primary aim is not to draw policy conclusions, but to highlight the main questions that arise, the contributions of the academic literature in addressing them, and the areas where much remains unknown. After describing some key concepts and trends in aid, the chapter examines the circumstances under which aid might transform productivity, and when it can achieve things that private capital flows cannot. The chapter reviews the relevant theory and evidence. Next, it turns to some of the other considerations that might form part of a structural model linking outcomes to aid. These include Dutch Disease effects, the fiscal response to aid, and the important connections between aid and governance, both positive and negative. The second half of the chapter examines when donors should attach conditions to aid. It reviews the debates on traditional policy conditionality, and potential alternatives, including the ideas underpinning the new “partnership” model. This model gives greater emphasis to a combination of autonomy and accountability, for countries where governance is strong. In other cases, donors may seek to attach conditions based on governance reform, and introduce new versions of traditional policy conditionality. The chapter also discusses controversies over the appropriate role of country ownership of aid programs. It goes on to discuss some donor failings, the future roles of randomized trials and evaluation, and the scope for aid to meet basic needs. The chapter ends with a discussion of some of the most innovative ideas for the reform of aid, and a summary of the main conclusions. |
3A1831639815.jsonld | Chapter 17. Housing and Credit Markets : Booms and Busts | Prompted by the recent US experience, in this chapter, we study the interaction between cycles in credit markets and cycles in housing markets. There is a large growing literature exploring two different approaches: on the one hand, a boom–bust in house prices can generate a boom–bust in credit market and, on the other hand, a boom–bust in credit markets can generate a boom–bust in house prices. We start by presenting a stark mechanical model to formalize the interaction between housing prices and credit markets and explore these two channels in a mechanical way. Next, we present two simple models that highlight the two approaches. First, we propose a catastrophe model, where an increase in credit availability can generate first a boom and then a bust in mortgage markets because of multiple equilibria due to adverse selection: as lending expands, the composition of borrowers worsens and at some point this can generate a crash in credit market. Second, we propose a sentiment model, where house prices increase above fundamentals because investors buy assets under the irrational belief that there is always going to be an ever more foolish buyer, willing to buy at a higher price. In the course of the chapter, we relate our simple models to the large existing literature on these topics. At the end, we also point to some empirical papers that propose related facts. |
3A1831644029.jsonld | Chapter 33 Data and econometric tools for development analysis | This chapter discusses data and econometric tools for development analysis. Data issues lead directly into the econometrics. The chapter discusses household survey data, survey design in developing countries, data collection, measurement issues, and experience of using such data in econometric analysis. It describes national income accounts, index number, and other problems that underlie international comparisons of income levels and growth rates. Tools for microeconomic analysis are discussed in the chapter, with emphasis on the use of survey data through a range of more or less familiar econometric topics, methods for strengthening the robustness of inference, and common pitfalls and difficulties. Time-series techniques and their uses in the analysis of development questions are discussed in the chapter. Nonparametric techniques for estimating density functions, regression functions, and the derivatives of regression functions are also discussed. Non-parametric analysis requires a great deal of data, there are a number of questions in the development economics susceptible to non-parametric treatment using survey data. |
3A1831633108.jsonld | Chapter 42 Asset Pricing | This chapter focuses on the process of asset pricing. In field studies, it is customary to reject the random walk theory by identifying drift in prices. The drift is to be explained in terms of compensation for risk using some equilibrium asset pricing model. An alternative would be to view drift as evidence that equilibration forces are at work, verify whether the drift points in the direction of a given asset pricing equilibrium, and whether it eventually leads markets to this equilibrium. In the experiments discussed in this chapter, the data can best be understood in this fashion. Experiments make it easier to identify the forces of equilibrium asset pricing theory, because almost all parameters can be controlled. |
3A1831641585.jsonld | Chapter 34 Cost allocation | This chapter discusses the game-theory literature on cost allocation. Cost allocation not only provides internal signals that guide a firm's operations but also may be a response to external competitive pressures. Cost allocation is a kind of game in which costs (and benefits) are shared among different parts of an organization. The organization wants an allocation mechanism that is efficient, equitable, and provides appropriate incentives to its various parts. Cooperative game theory provides the tools for analyzing these issues. Cooperative game theory and cost allocation are closely intertwined in practice. Some of the central ideas in cooperative game theory, such as the core, were prefigured in the early theoretical literature on cost allocation. Others, such as the Shapley value, have long been used implicitly by some organizations. The chapter describes some of the central solution concepts in cooperative game theory. Axioms and conditions that are usually presented in an abstract setting often seem more compelling when interpreted in the cost-allocation framework. Cost allocation is a practical problem in which the salience of the solution depends on contextual and institutional details. The chapter presents various ways of modeling a cost allocation situation. |
3A1831643928.jsonld | Chapter 49 Public Action for Public Goods | This paper focuses on the relationship between public action and access to public goods. It begins by developing a simple model to capture the various mechanisms that are discussed in the theoretical literature on collective action. We use the model to illustrate the special assumptions embedded in many popular theories of collective action and show how their apparently conflicting predictions can be reconciled in a more general framework. This is followed by a review of empirical research on collective action and public goods. These studies, while broadly consistent with the theoretical literature, account for a small part of the observed variation in provision. Access to public goods is often better explained by “top-down” interventions rather than the “bottom-up” processes highlighted in the collective action literature. We conclude with a discussion of some historically important interventions of this type. |
3A730016455.jsonld | Regulation, market structure and performance in telecommunications | The paper uses an international database on regulation, market structure and performance in the telecommunications industry to investigate the effects of entry liberalisation and privatisation on productivity, prices and quality of service in long-distance (domestic and international) and mobile cellular telephony services in 23 OECD countries over the 1991-1997 period. The data on regulation and market structure is analysed by means of factor analysis techniques in order to group countries according to their policy and market environments. Controlling for technology developments and differences in economic structure, panel data estimates show that prospective competition (as proxied by the number of years remaining to liberalisation) and effective competition (as proxied by the share of new entrants or by the number of competitors) both bring about productivity and quality improvements and reduce the prices of all the telecommunications services considered in the analysis. No clear evidence could be found concerning the effects on performance of the ownership structure of the industry (as proxied by both the public share in the public telecommunications operators and years remaining to privatisation). |
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