Metroeconomica最新文献

The purpose of this paper is to provide a micro-economic foundation for an argument that the direct employment by the government is more desirable than the government purchase of private goods to eliminate unemployment. A general equilibrium model with monopolistic competition is devised, and the effects of policies (government purchase, tax rate operation, and government employment) on macroeconomic variables (consumption, price, and profit) are investigated. It is shown that (1) the government purchase is inflationary in the sense that additional effective demand by the government not only increases private employment but also raises prices; (2) the government employment can achieve full employment without causing a rise in prices.

Carbon prices have grown remarkably in the European Union (EU) Emissions Trading System (ETS) in recent years, raising distributional concerns. Revenues are expected to grow with higher carbon prices, thus providing resources to address distributional issues. Beyond a certain point, however, higher prices can discourage the purchase of allowances and ultimately reduce revenues, describing a Carbon Laffer Curve (CLC). We empirically investigate the CLC in the EU ETS between 2012 and 2021 using auction revenues at the country level. Results indicate that ETS revenues follow an inverted-U relationship in both the volume and the price of auctioned allowances, with an estimated optimal price between 86 and 125 euros.

In contrast to Mandler's generic determinacy of steady-state equilibria, we first show that any non-trivial steady-state equilibrium is indeterminate under a general overlapping generation (OLG) economy with a fixed Leontief technique. We also check that this indeterminacy is generic. These results are obtained by explicitly introducing a general model of every generation's utility function and individual optimization program to the OLG economy, which also verifies that Mandler's claim on generic determinacy is invalid. We also argue the distinctiveness of our results in comparison with the standard literature of OLG indeterminacy.

This article models the process of structural transformation and catching-up in a demand-led Southern economy constrained by its balance of payments. Starting from the Sraffian Supermultiplier Model, we model a dual-sector small open economy with a traditional and a modern sector that interacts with a technologically advanced Northern economy. We propose two (alternative) autonomous elements that define the growth rate of this demand-led economy: government spending and exports. Drawing from the Structuralist literature, productivity in the technologically laggard Southern economy grows by absorbing technology from the Northern economy, by both embodied and disembodied spillovers, and potentially closing the technology gap. The gap affects the income elasticity of exports, bringing a supply-side mediation to the growth rates in line with the Balance of Payments Constrained Model. We observe that a demand-led government policy plays a central role in structural change, pushing the modern sector to a larger share of employment than what results under export-led growth. Such a demand policy is the only way in which partial catching up (in productivity and GDP per capita) can result, and this is facilitated by a global market place in which the balance of payments constraint is relatively soft.

This paper analyzes the transfer pricing decision of the multinational firm. There are differences in profit tax rates between home-country and host-country. The multinational firm determines the transfer price to its overseas affiliate and delegates the responsibility of deciding on the final sales to its affiliate manager. We find that: (1) The multinational firm will set a higher transfer price if its affiliate hires a manager. If the host-country firm also hires a manager, the managerial delegation may lead to an asymmetry “prisoner's dilemma”. (2) When home-country's tax rate is higher than that in the host-country, multinational firm tends to set a lower transfer price relative to the marginal production cost. (3) When host-country's tax rate is higher than that in the home-country, an increase in the host-country corporate tax rate decreases multinational firm's profit and the consumer surplus, while its impact on the host-country firm's profit is non-monotone; an increase in the home-country tax rate decreases host-country firm's profit, increases consumer surplus, but has a non-monotone impact on multinational firm's profit.

We integrate the notion of task-based automation into a two-class model and study the interaction between endogenous automation and the wealth distribution between capitalists and workers. We find that, as the economy becomes more automated, the possibility of a sustained capitalist class naturally arises. We show that capital-augmenting technical progress induces automation and that it can generate a historical path from the dual equilibrium (where workers own all wealth), over the Pasinetti equilibrium (where capitalists own some wealth) to the anti-dual outcome (where capitalists own all wealth). The model's implications are related to Piketty's account of rising wealth inequality.

This study presents a trade model with (1) intermediate inputs, (2) link commodities, and (3) Keynesian unemployment. The model has linear input coefficients, stable commodity prices, and short-run adjustment of the quantity supplied on the occasion of demand changes, making it compatible with international input–output tables and analysis. Given production techniques, labor endowments, upper limits of unemployment rates, markup rates, and final demand in each country, this model specifies feasible trade patterns and determines commodity prices, wage rates, gross outputs, employment/unemployment rates, national income, income distribution, and trade volumes/values for each pattern. Starting with a two-country, three-commodity case, this model expands to a multi-country, multi-commodity case.

By promoting economic growth, human capital may contribute to the rise in CO2 emissions, but it may also stimulate emission-reducing technologies. Starting from a Green Solow model augmented with human capital, we show that the former effect dominates the latter when human capital is below a critical value, while the opposite is true when human capital becomes sufficiently high. We also find that this result may delay the observability of an EKC and that human capital is more important than savings and depreciation rates in predicting CO2 growth. This evidence has relevant policy implications regarding which factors should be considered to mitigate carbon emissions.

This study explores the interaction between private and public physical capital accumulation within a Lewis development framework, in which public infrastructure is subject to congestion. The model shows that when both levels of capital are relatively low, a crowding-out of private investment creates the necessary conditions for the emergence of a development trap, from which a surplus labor economy, if left to the free play of its structural forces, may never escape. Once caught in such a trap, the economy can potentially be released through a big push of public or private capital or a sufficiently balanced combination of both.

In finance, the economic evaluation of an intertemporal flow of investments may lead to opposite conclusions according as the present value criterion or the internal rate of return (IRR) criterion is retained. However, when the lifetime of the project results from an economic choice, the criteria are reconciled for the competitive sequence. When the flows are expressed in physical terms, a generalization of the notion of IRR allows us to show that multisector fixed-capital models with a given real wage behave like single-product systems. The competitive rate of return has a maximality property. The paper revises the logical and chronological relationships between neo-Austrian and Sraffian fixed-capital models.