Ricerche Economiche最新文献

This paper proposes a new route to rationalize cyclical policies in concave two-state variable, economic control problems. The essential ingredients are: positive growth; a (positive) externality of the stock; and sluggish control, such that actual control is the sum over historical changes. Given these conditions, it is amazingly simple to generate stable limit cycles, even for separable models. A simple renewable resource model is used to verify this claim.

Given an extensive game G, three subsets of the normal-form equivalence class of G are defined: the subset of simultaneous games [denoted by Sim(G)] the subset of subgame-proserving quasi-simultaneous games [denoted by SubSim(G)] and, finally, the subset consisting of the game G itself. We show that by applying the notion of rational profile of beliefs (which is formulated independently of the notion of strategy and therefore of Nash equilibrium) to the games in Sim(G) one obtains exactly the Nash equilibria of G, by applying it to the games in SubSim(G) one obtains exactly the subgame-perfect equilibria of G and, finally, by applying it to G itself one obtains a (strict) refinement of subgame-perfect equilibrium.

The paper introduces a Keynes-Wicksell type model which generalizes a textbook model of Sargent (1987). It shows that the steady state of the model is locally asymptotically stable if two economically meaningful conditions are imposed on it. We then investigate two important limit cases with further stability properties. Case 1 has characteristics which are close to Sargent's Friedman version of such a Keynes-Wicksell dynamics, while case 2 is of a twofold Classical cross-dual type, with features of the process of equalizing profit rates as well as socalled profit-squeeze mechanisms. We close the paper with some numerical simulations of the latter approach to a Classical type of business cycle theory.

This paper reconsiders the conditions under which a government may engage in debt roll-over schemes by financing interest payments through the issue of new debt. Output growth rates in excess of interest rates on government debt have traditionally been considered grounds for sustaining such schemes. A government may avoid debt repayment, or even run a primary deficit forever, and yet maintain a bounded debt-to-income ratio. Recent research has pointed at the stronger constraints placed on government behaviour by uncertain output growth. We show that this is not the case when an alternative criterion for solvency is used, namely that the debt-to-income ratio converges almost surely in the long run. In this case, the government is solvent when the asymptotic growth rate of the economy exceeds the asymptotic interest rate on debt, a natural extension of a familiar criterion in a deterministic environment.

Convergence to the long-run outcome may, however, be a slow process. For realistic parameter values, long-run-stable fiscal plans may resemble unsustainable plans over long horizons. This circumstance may explain the observed poor performance of debt ratios as indicators of fiscal sustainability.

Predatory pricing is feasible only if the minimax profit of the prey is strictly smaller than the expected profit in the corresponding Bertrand-Nash equilibrium. We completely characterize the conditions for feasibility of predatory pricing in Kreps and Scheinkman's model of capacity-constrained duopoly. The predator must have a capacity larger than that of the prey, and also larger than the Cournot capacity. Surprisingly, predatory pricing may be infeasible not only if the prey is too large but also if it is too small.

This paper deals with the Walrasian property of Nash and strong equilibria of a specific strategic market game which refers to a pure exchange economy involving purely indivisible commodities and no money. The game is of sealed-bid auction type and it is shown that any Nash equilibrium at which no agent is in status quo is a strong equilibrium and implements a Walrasian equilibrium. Moreover, it appears that two modifications of the game's rules ensure that any strong equilibrium outcome is Walrasian. These results are identical to those obtained by Svensson for markets involving purely indivisible goods and money.