Second-best public debt with human capital externalities

This paper studies optinnal public debt in a dynastic model with human capital externalities that cause human capital investment (fertility) to be below (above) its socially optimal level. By reducing fertility and raising human capital investment, the optimal debt can exceed 10% of output for plausible parameterizations.

Macroeconomic policies, sector performance and firm response: the case of Chile's textile goods market

Includes bibliography

Cyclical and Welfare Effects of Public Sector Unions in a Real-Business-Cycle Model

Motivated by the highly-unionized public sectors, the high public shares in total employment, and the public sector wage premia observed in Europe, this paper examines the importance of public sector unions for macroeconomic theory. The model generates cyclical behavior in hours and wages that is consistent with data behavior in an economy with highly-unionized public sector, namely Germany during the period 1970-2007. The union model is a signifi cant improvement over a model with exogenous public employment. In addition, endogenously-determined public wage and hours add to the distortionary e ffect of contractionary tax reforms by generating greater tax rate changes, thus producing signi ficantly higher welfare losses.

The Emperor Has New Clothes: Empirical Tests of Mainstream Theories of Economic Growth

Modern macroeconomic theory utilises optimal control techniques to model the maximisation of individual well-being using a lifetime utility function. Agents face choices over current and future consumption (with resultant implied savings decisions) seeking to maximise the present value of current plus future well-being. However, such inter-temporal welfare-maximising assumptions remain empirically untested. In the work presented here we test whether welfare was in (historical) fact maximised in the US between 1870-2000 and find empirical support for the optimising basis of growth theory, but only once a comprehensive view of what constitutes a country’s wealth or capital is taken into account.

Are we all Keynesians?

This essay asks whether we are all becoming Keynesians again. It offers some thoughts about the impact of the financial crisis on macroeconomic theory and Keynesian theory, and on post-Keynesian theory in particular. It is argued that the crisis does have obvious effects on how Keynesianism is being perceived by decision makers, and that some effects are also observed on academia. However, there are forces within the economics profession and the population at large which are resistant to this second coming of the Keynesian revolution.

Re-measuring labor's share

Measuring labor's share of an economy's aggregate income seems straightforward, at least in principle. Count up wage and salary income, along with the value of benefits provided to employees, and divide it by total income. However, one fundamental concept of labor's share in macroeconomic theory is not the amount of aggregate income paid out to labor. Rather, it is the share of aggregate production that is attributable to "raw" units of labor. Or, otherwise stated, it is the share of aggregate income that would have been paid to laborers if they had no accumulated stocks of human capital.1 This share corresponds to an aggregate production function parameter: the elasticity of output with respect to physical (i.e. non-augmented or raw) units of labor (Robert Solow, 1957). In this paper we estimate annual raw labor’s share for the US, 1949 to 1996.

Economía matemática: antecedentes, evolución y algunos desarrollos recientes

Se presenta aquí, en forma breve, el origen de la matematización económica y el campo de la economía matemática. Un enfoque histórico inicial divide dicho campo en un primer periodo denominado marginalista, otro donde se utiliza la teoría de los conjuntos y modelos lineales y por último un periodo que integra los dos anteriores. Posteriormente, se analiza la evolución de la Teoría del Equilibrio General desde Quesnay, pasando por Walras y desarrollos posteriores hasta su culminación con los trabajos de Arrow, Debreu y sus contemporáneos. Finalmente, se describe la influencia de las matemáticas, en especial de la optimización dinámica, en la teoría macroeconómica y a otras áreas de la economía.

Aprendizagem, racionalidade limitada e comportamento econômico

O objetivo desta pesquisa é o de discutir o processo de aprendizagem na teoria econômica, especialmente na macroeconomia; assim como as conseqüências, para a política econômica, de considerar-se tal processo um importante elemento nas decisões econômicas.

Monetary dilemmas: Argentina in MERCOSUR

Includes bibliography

Manual on economic development projects

In this study, projects are not regarded as isolated economic units; they are considered within the context of the entire economic system of which they will form a part. Thus the Manual presents both macroeconomic and microeconomic concepts. From this it must not be inferred that the Manual attempts to offer a combined microeconomic and macroeconomic theory. It seeks to contribute more to an appreciation of the problem than to its solution, thus widening the outlook of those who prepare projects so that they may make the greatest possible compilation of useful data for their economic appraisal.

Keynes’s "Treatise on Money" and the role of the State

Este artículo hace una reconstrucción crítica de la visión de Keynes sobre la relación entre gasto público, tipo de interés, salarios y desempleo, tal y como se formula en su Tratado sobre el Dinero. El trabajo defiende que el enfoque de Keynes lleva a propuestas de política económica que enfatizan la necesidad de intervención estatal directa en la provisión de bienes y servicios. Esta conclusión se deriva de una interpretación circuitista de su obra.

When theories become practice - a metaphorical analysis of adult-education school-leaders’ talk

Marketization has changed the education system. If we say that education is a market, this transforms the understanding of education and influences how people act. In this paper, adult-education school-leaders’ talk is analysed and seven metaphors for education are found: education as administration, market, matching, democracy, policy work, integration and learning. Exploring empirical metaphors provides a rich illustration of coinciding meanings. In line with studies on policy texts, economic metaphors are found to dominate. This should be understood not only as representing liberal ideology, as is often discussed in analyses of policy papers, but also as representing economic theory. In other words, contemporary adult education can be understood as driven by economic theories. The difference and relation between ideology and theory should be further examined since they have an impact on our society and on our everyday lives. (DIPF/Orig.)