Cost-Based Models of Economic Growth

In this paper we highlight the importance of the operational costs in explaining economic growth and analyze how the industrial structure affects the growth rate of the economy. If there is monopolistic competition only in an intermediate goods sector, then production growth coincides with consumption growth. Moreover, the pattern of growth depends on the particular form of the operational cost. If the monopolistically competitive sector is the final goods sector, then per capita production is constant but per capita effective consumption or welfare grows. Finally, we modify again the industrial structure of the economy and show an economy with two different growth speeds, one for production and another for effective consumption. Thus, both the operational cost and the particular structure of the sector that produces the final goods determines ultimately the pattern of growth.

Lobbying, political competition, and local land supply: recent evidence from Spain

We analyze whether local land supply is influenced by the degree of political competition, and interpret the findings as being indicative of the influence wielded by land development lobbies. We use a new database including both political and land supply data for more than 2,000 Spanish municipalities for the period 2003-2007. In Spain, land use policies are largely a local responsibility with municipalities having periodically to pass compre- hensive land use plans. The main policy variable in these plans, and the one analyzed here, is the amount of land classified for potential development. We measure local political competition as the margin of victory of the incumbent government. We instrument this variable using the number of votes obtained by parties represented in local government when standing at the first national legislative elections following the re-establishment of democracy, and the number of votes they actually obtained regionally at the national legislative elections. The results indicate that stiffer political competition does indeed reduce the amount of new land designated for development. This effect is found to be most marked in suburbs, in towns with a high percent of commuters and homeowners, and in municipalities governed by the left.

Contracts, Reference Points, and Competition - Behavioral Effects of the Fundamental Transformation

In this paper we study the role of incomplete ex ante contracts for ex post trade. Previous experimental evidence indicates that a contract provides a reference point for entitlements when the terms are negotiated in a competitive market. We show that this finding no longer holds when the terms are determined in a non-competitive way. Our results imply that the presence of a "fundamental transformation" (i.e., the transition from a competitive market to a bilateral relationship) is important for a contract to become a reference point. To the best of our knowledge this behavioral aspect of the fundamental transformation has not been shown before.

Cost-Based Models of Economic Growth

In this paper we highlight the importance of the operational costs in explaining economic growth and analyze how the industrial structure affects the growth rate of the economy. If there is monopolistic competition only in an intermediate goods sector, then production growth coincides with consumption growth. Moreover, the pattern of growth depends on the particular form of the operational cost. If the monopolistically competitive sector is the final goods sector, then per capita production is constant but per capita effective consumption or welfare grows. Finally, we modify again the industrial structure of the economy and show an economy with two different growth speeds, one for production and another for effective consumption. Thus, both the operational cost and the particular structure of the sector that produces the final goods determines ultimately the pattern of growth.

The establishment of communication systems depends on the scale of competition

How communication systems emerge and remain stable is an important question in both cognitive science and evolutionary biology. For communication to arise, not only must individuals cooperate by signaling reliable information, but they must also coordinate and perpetuate signals. Most studies on the emergence of communication in humans typically consider scenarios where individuals implicitly share the same interests. Likewise, most studies on human cooperation consider scenarios where shared conventions of signals and meanings cannot be developed de novo. Here, we combined both approaches with an economic experiment where participants could develop a common language, but under different conditions fostering or hindering cooperation. Participants endeavored to acquire a resource through a learning task in a computer-based environment. After this task, participants had the option to transmit a signal (a color) to a fellow group member, who would subsequently play the same learning task. We varied the way participants competed with each other (either global scale or local scale) and the cost of transmitting a signal (either costly or noncostly) and tracked the way in which signals were used as communication among players. Under global competition, players signaled more often and more consistently, scored higher individual payoffs, and established shared associations of signals and meanings. In addition, costly signals were also more likely to be used under global competition; whereas under local competition, fewer signals were sent and no effective communication system was developed. Our results demonstrate that communication involves both a coordination and a cooperative dilemma and show the importance of studying language evolution under different conditions influencing human cooperation.

FDI from European Union to Western Balkan Countires: is the economic development being intensified in the region?

La inversió estrangera directa és important a causa dels seus avantatges per al país d'acollida, per exemple augmentarà la competitivitat i s’intensifica el desenvolupament. Els avantatges són significatives als països dels Balcans occidentals que s'enfronten a les dificultats de la competència i el creixement més baix de la UE-27. El treball analitza el tipus dominant de la IED de la UE-27 a la regió dels Balcans Occidentals a escala nacional i sectorial per formar les implicacions sobre el futur creixement de la competitivitat i la intensitat del desenvolupament econòmic. Es troba que la IED horitzontal domina als Balcans occidentals, per tant, el creixement de la competitivitat i el desenvolupament econòmic es va intensificar a la regió.

Convergence and divergence in global economy and social development : global perspectives on the contents of economic and soical development policy and its effects on rich and poor countries

The study of convergence and divergence in global economy and social development utilises comparative indicators to investigate the contents of economic and social development policy and their effects on the global samples that represent the rich industrial, semi-industrial and the poor developing nations. The study searchesfor answers to questions such as "what are the objectives of economic growth policies in globalisation under the imperatives of convergence and divergence, and how do these affect human well-being in consideration to the objectives of social policy in various nations?" The empirical verification of data utilises the concepts of the `logic of industrialism´ for comparative analysis that focuses mainly on identifying the levels of well-being in world nations after the Second World War. The perspectives of convergence and divergence in global economy and social development critically examine the stages of early development processes in global economy, distinguish the differences between economy and social development, illustrate the contents of economic and social development policies, their effects on rich and poor countries, and the nature of convergence and divergence in propelling economic growth and unequal social development in world nations. The measurement of convergence and divergence in global economy and social development utilised both economic and social data that were combined into an index that measures the precise levels of the effects of economic and social development policies on human well-being in the rich and poor nations. The task of finding policy solutions to resolve the controversies are reviewed through empirical investigations and the analyses of trends indicated within economic and social indicators and data. These revealed how the adoption of social policy measures in translating the gains from economic growth, towards promoting education, public health, and equity, generate social progress and longer life expectancy, higher economic growth, and sustain more stable macro economy for the nations. Social policy is concerned with the translation of benefits from objectives of global economic growth policies, to objectives of social development policy in nation states. Social policy, therefore, represents an open door whereby benefits of economic growth policies are linked with the broader objectives of social development policy, thereby enhancing the possibility of extending benefits from economic growth to all human being in every nation.

Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: with Applicatioon to the United States, 1973 and 1983

A full understanding of public affairs requires the ability to distinguish between the policies that voters would like the government to adopt, and the influence that different voters or group of voters actually exert in the democratic process. We consider the properties of a computable equilibrium model of a competitive political economy in which the economic interests of groups of voters and their effective influence on equilibrium policy outcomes can be explicitly distinguished and computed. The model incorporates an amended version of the GEMTAP tax model, and is calibrated to data for the United States for 1973 and 1983. Emphasis is placed on how the aggregation of GEMTAP households into groups within which economic and political behaviour is assumed homogeneous affects the numerical representation of interests and influence for representative members of each group. Experiments with the model suggest that the changes in both interests and influence are important parts of the story behind the evolution of U.S. tax policy in the decade after 1973.

Echno economic studies on industrial fishing in the upper east coast of India

The present scenario of industrial fishing in India is that most of large trawlers are based at Visakhapatnam and congregate in the potential shrimp ground in the upper East coast of India commonly known as the Sandheads. These are outriggcr vessels operating two or four trawl nets along with a testing trawl called try net. In the early Seventies these vessels were operating on a very high economic return which was evident from the steady increase in number of outriggers over a period of twenty years. Since the total allowable catch has to be shared by all vessels including the increasing fleet, reduction per vessel output is bound to happen. Therefore some of them could not survive the competition and withdrew from the scene. The number of outriggers did not increase subsequently. However, there arose a doubt whether the existing fleet of about 180 vessels are fishing economically or whether there is any scope for further introduction of industrial vessels in the region. This study is focussing to the techno economic aspects of industrial fishing in the upper East coast of India

Economic shocks and crime: evidence from the crash of ponzi schemes

In November 2008, Colombian authorities dismantled a network of Ponzi schemes, making hundreds of thousands of investors lose tens of millions of dollars throughout the country. Using original data on the geographical incidence of the Ponzi schemes, this paper estimates the impact of their break down on crime. We find that the crash of Ponzi schemes differentially exacerbated crime in affected districts. Confirming the intuition of the standard economic model of crime, this effect is only present in places with relatively weak judicial and law enforcement institutions, and with little access to consumption smoothing mechanisms such as microcredit. In addition, we show that, with the exception of economically-motivated felonies such as robbery, violent crime is not affected by the negative shock.

Dynamics of brand competition: Effects of unobserved social networks

Brand competition is modelled using an agent based approach in order to examine the long run dynamics of market structure and brand characteristics. A repeated game is designed where myopic firms choose strategies based on beliefs about their rivals and consumers. Consumers are heterogeneous and can observe neighbour behaviour through social networks. Although firms do not observe them, the social networks have a significant impact on the emerging market structure. Presence of networks tends to polarize market share and leads to higher volatility in brands. Yet convergence in brand characteristics usually happens whenever the market reaches a steady state. Scale-free networks accentuate the polarization and volatility more than small world or random networks. Unilateral innovations are less frequent under social networks.