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.

Interactive Epistemology and Reasoning: On the Foundations of Game Theory

Game theory describes and analyzes strategic interaction. It is usually distinguished between static games, which are strategic situations in which the players choose only once as well as simultaneously, and dynamic games, which are strategic situations involving sequential choices. In addition, dynamic games can be further classified according to perfect and imperfect information. Indeed, a dynamic game is said to exhibit perfect information, whenever at any point of the game every player has full informational access to all choices that have been conducted so far. However, in the case of imperfect information some players are not fully informed about some choices. Game-theoretic analysis proceeds in two steps. Firstly, games are modelled by so-called form structures which extract and formalize the significant parts of the underlying strategic interaction. The basic and most commonly used models of games are the normal form, which rather sparsely describes a game merely in terms of the players' strategy sets and utilities, and the extensive form, which models a game in a more detailed way as a tree. In fact, it is standard to formalize static games with the normal form and dynamic games with the extensive form. Secondly, solution concepts are developed to solve models of games in the sense of identifying the choices that should be taken by rational players. Indeed, the ultimate objective of the classical approach to game theory, which is of normative character, is the development of a solution concept that is capable of identifying a unique choice for every player in an arbitrary game. However, given the large variety of games, it is not at all certain whether it is possible to device a solution concept with such universal capability. Alternatively, interactive epistemology provides an epistemic approach to game theory of descriptive character. This rather recent discipline analyzes the relation between knowledge, belief and choice of game-playing agents in an epistemic framework. The description of the players' choices in a given game relative to various epistemic assumptions constitutes the fundamental problem addressed by an epistemic approach to game theory. In a general sense, the objective of interactive epistemology consists in characterizing existing game-theoretic solution concepts in terms of epistemic assumptions as well as in proposing novel solution concepts by studying the game-theoretic implications of refined or new epistemic hypotheses. Intuitively, an epistemic model of a game can be interpreted as representing the reasoning of the players. Indeed, before making a decision in a game, the players reason about the game and their respective opponents, given their knowledge and beliefs. Precisely these epistemic mental states on which players base their decisions are explicitly expressible in an epistemic framework. In this PhD thesis, we consider an epistemic approach to game theory from a foundational point of view. In Chapter 1, basic game-theoretic notions as well as Aumann's epistemic framework for games are expounded and illustrated. Also, Aumann's sufficient conditions for backward induction are presented and his conceptual views discussed. In Chapter 2, Aumann's interactive epistemology is conceptually analyzed. In Chapter 3, which is based on joint work with Conrad Heilmann, a three-stage account for dynamic games is introduced and a type-based epistemic model is extended with a notion of agent connectedness. Then, sufficient conditions for backward induction are derived. In Chapter 4, which is based on joint work with Jérémie Cabessa, a topological approach to interactive epistemology is initiated. In particular, the epistemic-topological operator limit knowledge is defined and some implications for games considered. In Chapter 5, which is based on joint work with Jérémie Cabessa and Andrés Perea, Aumann's impossibility theorem on agreeing to disagree is revisited and weakened in the sense that possible contexts are provided in which agents can indeed agree to disagree.

Generic Nekhoroshev theory without small divisors

In this article, we present a new approach of Nekhoroshev theory for a generic unperturbed Hamiltonian which completely avoids small divisors problems. The proof is an extension of a method introduced by P. Lochak which combines averaging along periodic orbits with simultaneous Diophantine approximation and uses geometric arguments designed by the second author to handle generic integrable Hamiltonians. This method allows to deal with generic non-analytic Hamiltonians and to obtain new results of generic stability around linearly stable tori.

New developments and applications in modelling occupational exposure to airborne contaminants

Résumé: L'évaluation de l'exposition aux nuisances professionnelles représente une étape importante dans l'analyse de poste de travail. Les mesures directes sont rarement utilisées sur les lieux même du travail et l'exposition est souvent estimée sur base de jugements d'experts. Il y a donc un besoin important de développer des outils simples et transparents, qui puissent aider les spécialistes en hygiène industrielle dans leur prise de décision quant aux niveaux d'exposition. L'objectif de cette recherche est de développer et d'améliorer les outils de modélisation destinés à prévoir l'exposition. Dans un premier temps, une enquête a été entreprise en Suisse parmi les hygiénistes du travail afin d'identifier les besoins (types des résultats, de modèles et de paramètres observables potentiels). Il a été constaté que les modèles d'exposition ne sont guère employés dans la pratique en Suisse, l'exposition étant principalement estimée sur la base de l'expérience de l'expert. De plus, l'émissions de polluants ainsi que leur dispersion autour de la source ont été considérés comme des paramètres fondamentaux. Pour tester la flexibilité et la précision des modèles d'exposition classiques, des expériences de modélisations ont été effectuées dans des situations concrètes. En particulier, des modèles prédictifs ont été utilisés pour évaluer l'exposition professionnelle au monoxyde de carbone et la comparer aux niveaux d'exposition répertoriés dans la littérature pour des situations similaires. De même, l'exposition aux sprays imperméabilisants a été appréciée dans le contexte d'une étude épidémiologique sur une cohorte suisse. Dans ce cas, certains expériences ont été entreprises pour caractériser le taux de d'émission des sprays imperméabilisants. Ensuite un modèle classique à deux-zone a été employé pour évaluer la dispersion d'aérosol dans le champ proche et lointain pendant l'activité de sprayage. D'autres expériences ont également été effectuées pour acquérir une meilleure compréhension des processus d'émission et de dispersion d'un traceur, en se concentrant sur la caractérisation de l'exposition du champ proche. Un design expérimental a été développé pour effectuer des mesures simultanées dans plusieurs points d'une cabine d'exposition, par des instruments à lecture directe. Il a été constaté que d'un point de vue statistique, la théorie basée sur les compartiments est sensée, bien que l'attribution à un compartiment donné ne pourrait pas se faire sur la base des simples considérations géométriques. Dans une étape suivante, des données expérimentales ont été collectées sur la base des observations faites dans environ 100 lieux de travail différents: des informations sur les déterminants observés ont été associées aux mesures d'exposition des informations sur les déterminants observés ont été associé. Ces différentes données ont été employées pour améliorer le modèle d'exposition à deux zones. Un outil a donc été développé pour inclure des déterminants spécifiques dans le choix du compartiment, renforçant ainsi la fiabilité des prévisions. Toutes ces investigations ont servi à améliorer notre compréhension des outils des modélisations ainsi que leurs limitations. L'intégration de déterminants mieux adaptés aux besoins des experts devrait les inciter à employer cet outil dans leur pratique. D'ailleurs, en augmentant la qualité des outils des modélisations, cette recherche permettra non seulement d'encourager leur utilisation systématique, mais elle pourra également améliorer l'évaluation de l'exposition basée sur les jugements d'experts et, par conséquent, la protection de la santé des travailleurs. Abstract Occupational exposure assessment is an important stage in the management of chemical exposures. Few direct measurements are carried out in workplaces, and exposures are often estimated based on expert judgements. There is therefore a major requirement for simple transparent tools to help occupational health specialists to define exposure levels. The aim of the present research is to develop and improve modelling tools in order to predict exposure levels. In a first step a survey was made among professionals to define their expectations about modelling tools (what types of results, models and potential observable parameters). It was found that models are rarely used in Switzerland and that exposures are mainly estimated from past experiences of the expert. Moreover chemical emissions and their dispersion near the source have also been considered as key parameters. Experimental and modelling studies were also performed in some specific cases in order to test the flexibility and drawbacks of existing tools. In particular, models were applied to assess professional exposure to CO for different situations and compared with the exposure levels found in the literature for similar situations. Further, exposure to waterproofing sprays was studied as part of an epidemiological study on a Swiss cohort. In this case, some laboratory investigation have been undertaken to characterize the waterproofing overspray emission rate. A classical two-zone model was used to assess the aerosol dispersion in the near and far field during spraying. Experiments were also carried out to better understand the processes of emission and dispersion for tracer compounds, focusing on the characterization of near field exposure. An experimental set-up has been developed to perform simultaneous measurements through direct reading instruments in several points. It was mainly found that from a statistical point of view, the compartmental theory makes sense but the attribution to a given compartment could ñó~be done by simple geometric consideration. In a further step the experimental data were completed by observations made in about 100 different workplaces, including exposure measurements and observation of predefined determinants. The various data obtained have been used to improve an existing twocompartment exposure model. A tool was developed to include specific determinants in the choice of the compartment, thus largely improving the reliability of the predictions. All these investigations helped improving our understanding of modelling tools and identify their limitations. The integration of more accessible determinants, which are in accordance with experts needs, may indeed enhance model application for field practice. Moreover, while increasing the quality of modelling tool, this research will not only encourage their systematic use, but might also improve the conditions in which the expert judgments take place, and therefore the workers `health protection.

Three Essays on the Formation and Impact of Economic Policy

Introduction In my thesis I argue that economic policy is all about economics and politics. Consequently, analysing and understanding economic policy ideally has at least two parts. The economics part, which is centered around the expected impact of a specific policy on the real economy both in terms of efficiency and equity. The insights of this part point into which direction the fine-tuning of economic policies should go. However, fine-tuning of economic policies will be most likely subject to political constraints. That is why, in the politics part, a much better understanding can be gained by taking into account how the incentives of politicians and special interest groups as well as the role played by different institutional features affect the formation of economic policies. The first part and chapter of my thesis concentrates on the efficiency-related impact of economic policies: how does corporate income taxation in general, and corporate income tax progressivity in specific, affect the creation of new firms? Reduced progressivity and flat-rate taxes are in vogue. By 2009, 22 countries are operating flat-rate income tax systems, as do 7 US states and 14 Swiss cantons (for corporate income only). Tax reform proposals in the spirit of the "flat tax" model typically aim to reduce three parameters: the average tax burden, the progressivity of the tax schedule, and the complexity of the tax code. In joint work, Marius Brülhart and I explore the implications of changes in these three parameters on entrepreneurial activity, measured by counts of firm births in a panel of Swiss municipalities. Our results show that lower average tax rates and reduced complexity of the tax code promote firm births. Controlling for these effects, reduced progressivity inhibits firm births. Our reading of these results is that tax progressivity has an insurance effect that facilitates entrepreneurial risk taking. The positive effects of lower tax levels and reduced complexity are estimated to be significantly stronger than the negative effect of reduced progressivity. To the extent that firm births reflect desirable entrepreneurial dynamism, it is not the flattening of tax schedules that is key to successful tax reforms, but the lowering of average tax burdens and the simplification of tax codes. Flatness per se is of secondary importance and even appears to be detrimental to firm births. The second part of my thesis, which corresponds to the second and third chapter, concentrates on how economic policies are formed. By the nature of the analysis, these two chapters draw on a broader literature than the first chapter. Both economists and political scientists have done extensive research on how economic policies are formed. Thereby, researchers in both disciplines have recognised the importance of special interest groups trying to influence policy-making through various channels. In general, economists base their analysis on a formal and microeconomically founded approach, while abstracting from institutional details. In contrast, political scientists' frameworks are generally richer in terms of institutional features but lack the theoretical rigour of economists' approaches. I start from the economist's point of view. However, I try to borrow as much as possible from the findings of political science to gain a better understanding of how economic policies are formed in reality. In the second chapter, I take a theoretical approach and focus on the institutional policy framework to explore how interactions between different political institutions affect the outcome of trade policy in presence of special interest groups' lobbying. Standard political economy theory treats the government as a single institutional actor which sets tariffs by trading off social welfare against contributions from special interest groups seeking industry-specific protection from imports. However, these models lack important (institutional) features of reality. That is why, in my model, I split up the government into a legislative and executive branch which can both be lobbied by special interest groups. Furthermore, the legislative has the option to delegate its trade policy authority to the executive. I allow the executive to compensate the legislative in exchange for delegation. Despite ample anecdotal evidence, bargaining over delegation of trade policy authority has not yet been formally modelled in the literature. I show that delegation has an impact on policy formation in that it leads to lower equilibrium tariffs compared to a standard model without delegation. I also show that delegation will only take place if the lobby is not strong enough to prevent it. Furthermore, the option to delegate increases the bargaining power of the legislative at the expense of the lobbies. Therefore, the findings of this model can shed a light on why the U.S. Congress often practices delegation to the executive. In the final chapter of my thesis, my coauthor, Antonio Fidalgo, and I take a narrower approach and focus on the individual politician level of policy-making to explore how connections to private firms and networks within parliament affect individual politicians' decision-making. Theories in the spirit of the model of the second chapter show how campaign contributions from lobbies to politicians can influence economic policies. There exists an abundant empirical literature that analyses ties between firms and politicians based on campaign contributions. However, the evidence on the impact of campaign contributions is mixed, at best. In our paper, we analyse an alternative channel of influence in the shape of personal connections between politicians and firms through board membership. We identify a direct effect of board membership on individual politicians' voting behaviour and an indirect leverage effect when politicians with board connections influence non-connected peers. We assess the importance of these two effects using a vote in the Swiss parliament on a government bailout of the national airline, Swissair, in 2001, which serves as a natural experiment. We find that both the direct effect of connections to firms and the indirect leverage effect had a strong and positive impact on the probability that a politician supported the government bailout.

Research and teaching: a holy or an unholy alliance?

Much of the self-image of the Western university hangs on the idea that research and teaching are intimately connected. The central axiom here is that research and teaching are mutually supportive of each other. An institution lacking such a set of relationships between research and teaching falls short of what it means to be a university. This set of beliefs raises certain questions: Is it the case that the presence of such a mutually supportive set of relationships between research and teaching is a necessary condition of the fulfilment of the idea of the university? (A conceptual question). And is it true that, in practice today, such a mutually supportive set of relationships between research and teaching characterises universities? (An empirical question). In my talk, I want to explore these matters in a critical vein. I shall suggest that: a) In practice today, such a mutually supportive set of relationships between research and teaching is in jeopardy. Far from supporting each other, very often research and teaching contend against each other. Research and teaching are becoming two separate ideologies, with their own interest structures. b) Historically, the supposed tight link between research and teaching is both of recent origin and far from universally achieved in universities. Institutional separateness between research and teaching is and has been evident, both across institutions and even across departments in the same institution. c) Conceptually, research and teaching are different activities: each is complex and neither is reducible to the other. In theory, therefore, research and teaching may be said to constitute a holy alliance but in practice, we see more of an unholy alliance. If, then, in an ideal world, a positive relationship between research and teaching is still a worthwhile goal, how might it be construed and worked for? Seeing research and teaching as two discrete and unified sets of activity is now inadequate. Much better is a construal of research and teaching as themselves complexes, as intermingling pools of activity helping to form the liquid university that is emerging today. On this view, research and teaching are fluid spaces, ever on the move, taking up new shapes, and themselves dividing and reforming, as the university reworks its own destiny in modern society. On such a perspective, working out a productive relationship between research and teaching is a complex project. This is an alliance that is neither holy nor unholy. It is an uneasy alliance, with temporary accommodations and continuous new possibilities.

Conflict prevention and decentralized governance: some remarks about the state of the art in theory and practice

Is there a link between decentralized governance and conflict prevention? This article tries to answer the question by presenting the state of the art of the intersection of both concepts. Provided that social conflict is inevitable and given the appearance of new threats and types of violence, as well as new demands for security based on people (human security), our societies should focus on promoting peaceful changes. Through an extensive analysis of the existing literature and the study of several cases, this paper suggests that decentralized governance can contribute to these efforts by transforming conflicts, bringing about power-sharing and inclusion incentives of minority groups. Albeit the complexity of assessing its impact on conflict prevention, it can be contended that decentralized governance might have very positive effects on the reduction of causes that bring about conflicts due to its ability to foster the creation of war/violence preventors. More specifically, this paper argues that decentralization can have a positive impact on the so-called triggers and accelerators (short- and medium-term causes).

A critical application of securitization theory: overcoming the normative dilemma of writing security

This article addresses the normative dilemma located within the application of `securitization,’ as a method of understanding the social construction of threats and security policies. Securitization as a theoretical and practical undertaking is being increasingly used by scholars and practitioners. This scholarly endeavour wishes to provide those wishing to engage with securitization with an alternative application of this theory; one which is sensitive to and self-reflective of the possible normative consequences of its employment. This article argues that discussing and analyzing securitization processes have normative implications, which is understood here to be the negative securitization of a referent. The negative securitization of a referent is asserted to be carried out through the unchallenged analysis of securitization processes which have emerged through relations of exclusion and power. It then offers a critical understanding and application of securitization studies as a way of overcoming the identified normative dilemma. First, it examines how the Copenhagen School’s formation of securitization theory gives rise to a normative dilemma, which is situated in the performative and symbolic power of security as a political invocation and theoretical concept. Second, it evaluates previous attempts to overcome the normative dilemma of securitization studies, outlining the obstacles that each individual proposal faces. Third, this article argues that the normative dilemma of applying securitization can be avoided by firstly, deconstructing the institutional power of security actors and dominant security subjectivities and secondly, by addressing countering or alternative approaches to security and incorporating different security subjectivities. Examples of the securitization of international terrorism and immigration are prominent throughout.

Vintage capital growth theory: three breakthroughs

Vintage capital growth models have been at the heart of growth theory in the 60s. This research line collapsed in the late 60s with the so-called embodiment controversy and the technical sophisitication of the vintage models. This paper analyzes the astonishing revival of this literature in the 90s. In particular, it outlines three methodological breakthroughs explaining this resurgence: a growth accounting revolution, taking advantage of the availability of new time series, an optimal control revolution allowing to safely study vintage capital optimal growth models, and a vintage human capital revolution, along with the rise of economic demography, accounting for the vintage structure of human capital similarly to physical capital age structuring. The related literature is surveyed.

A New open economy macroeconomic model with endogenous portfolio diversification and firms entry

This paper provides a new benchmark for the analysis of the international diversi…cation puzzle in a tractable new open economy macroeconomic model. Building on Cole and Obstfeld (1991) and Heathcote and Perri (2009), this model speci…es an equilibrium model of perfect risk sharing in incomplete markets, with endogenous portfolios and number of varieties. Equity home bias may not be a puzzle but a perfectly optimal allocation for hedging risk. In contrast to previous work, the model shows that: (i) optimal international portfolio diversi…cation is driven by home bias in capital goods, independently of home bias in consumption, and by the share of income accruing to labour. The model explains reasonably well the recent patterns of portfolio allocations in developed economies; and (ii) optimal portfolio shares are independent of market dynamics.

Social Interaction Effects on Fertility: Intentions and Behaviors

The existing literature shows that social interactions in individuals' networks affect their reproductive attitudes and behaviors through three mechanisms: social influence, social learning, and social support. In this paper, we discuss to what extent the Theory of Planned Behavior (TPB), an individual based theorization of intentions and behavior used to model fertility, takes these social mechanisms into account. We argue that the TPB already integrates social influence and that it could easily accommodate the two other social network mechanisms. By doing so, the theory would be enriched in two respects. First, it will explain more completely how macro level changes eventually ends in micro level changes in behavioral intentions. Indeed, mechanisms of social influence may explain why changes in representations of parenthood and ideal family size can be slower than changes in socio-economic conditions and institutions. Social learning mechanisms should also be considered, since they are crucial to distinguish who adopts new behavioral beliefs and practices, when change at the macro level finally sinks in. Secondly, relationships are a capital of services that can complement institutional offering (informal child care) as well as a capital of knowledge which help individuals navigate in a complex institutional reality, providing a crucial element to explain heterogeneity in the successful realization of fertility intentions across individuals. We develop specific hypotheses concerning the effect of social interactions on fertility intentions and their realization to conclude with a critical review of the existing surveys suitable to test them and their limits.

Introduction : la normalisation des services dans la mondialisation

This book examines the role of technical standards in the regulation of services at the international level. It brings together scholarship in international political economy, French regulation theory, and economic sociology in order to discuss the following questions: Which services are most likely to be internationalised and what actors are the most concerned by the phenomenon? What is the relationship between the internationalisation of services and their institutional environment? What is more particularly the role of technical standards in delivering and using services? The introductory chapter presents a comprehensive analysis of cutting edge research on these questions. It argues that technical standards shape new forms of collective action and transnational authority. The chapter suggests some hypotheses for a new research agenda.

Accepting Methadone: The Evolution of an Institutional Decision

This is a study of organisational decision making among senior civil servants in the Department of Health (DOH) in relation to the acceptance of methadone maintenance as a valid treatment modality for opiate misuse in Ireland. A qualitative strategy was adopted with an emergent design and grounded theory perspective. The data was collected using a naturalistic mode of inquiry and comprised of documentary analysis and semi-structured interviews. The aspects of decision making chosen for the study were: 1. Identifying the actors involved considering the heretofore dominant 'corporation sole' culture of the Irish public administration. 2. Identifying two (out of the myriad) processes involved in decision making. 3. Identifying what theoretical model(s) of decision making most closely approximates to this case. The findings were as follows: 1. Actors involved at all levels of the decision making could be identified, albeit with some difficulty. This as a result of the strategic management initiative. Previously, it may not have been possible. Stages or phases could not, in this case, be readily identified though limitations of this study may prove significant. 2. Both the processes selected in decision-making in this case were confirmed. Personal and professional support provided by peers and seniors is crucial to decision making. Decision making does occur within networks: these tend to be those that are formally appointed rather than informal ones. 3. The model closest to that of this case was that of incremental decision making within network settings.This resource was contributed by The National Documentation Centre on Drug Use.