This study theoretically and empirically examines altruistic and joyof-giving motivations underlying contributions to charitable activities. The theoretical analysis shows that in an economy with an infinitely large number of donors, impurely altruistic preferences lead to either asymptotically zero or complete crowd-out. The paper then establishes conditions on preferences that are sufficient to yield zero crowd-out in the limit. These conditions are fairly weak and quite plausible. An empirical representation of the model is estimated using a new 1986‐92 panel of donations and government funding from the United States to 125 international relief and development organizations. Besides directly linking sources of public and private support, the econometric analysis controls for unobserved institution-specific factors, institution-specific changes in leadership, year-to-year changes in need, and expenditures by related organizations. The estimates show little evidence of crowd-out from either direct public or related private

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Altruistic and Joy‐of‐Giving Motivations in Charitable Behavior

Publisher Summary This chapter discusses that the mathematical model of a competitive economy conceived as an attempt to explain the state of equilibrium reached by a large number of small agents interacting through markets. Four distinct, but closely related, approaches to the existence problem are recognized. At first, proofs of existence of an economic equilibrium were uniformly obtained by application of a fixed-point theorem of the Brouwer type or Kakutani type or by analogous arguments. This approach, which has remained of central importance to the present, is the subject of the chapter. Second, in the past decade, efficient algorithms of a combinatorial nature for the computation of an approximate economic equilibrium were developed. Third, recently, the theory of the fixed-point index of a map and the degree theory of maps were used to establish the existence of an economic equilibrium, and finally a differential process was proposed whose generic convergence to an economic equilibrium provides an alternative constructive solution of the existence problem.

Chapter 15 Existence of competitive equilibrium

Publisher Summary Traditional general equilibrium theory has, for a long time, studied an economic model that is essentially static, where the agent's expectations are self-fulfilling and the equilibrium is achieved solely by the price system. The chapter presents the conceptual framework underlying temporary equilibrium models. This chapter discusses the central role played by an agent's expectations in his or her decision-making process. This model is the microeconomic foundation of the whole theory. A few models using the temporary competitive equilibrium method are also studied in the chapter. It is postulated that prices move fast enough in each period to match supply and demand. The first problem studied is the issue of the existence of an equilibrium in asset markets that is very important in any theory of financial markets. In the framework of a simple model, a necessary and sufficient condition for the existence of a competitive equilibrium in asset markets is some partial agreement among economic agents concerning expected future spot prices of these assets. The chapter studies the temporary equilibrium with the quantity rationing method and to the possible contributions of this approach to the theory of employment and inflation. The basic axiom of this approach is that in the short run, quantities adjust infinitely faster than prices. One is thus led to study a model where prices are temporarily fixed in each period and equilibrium is achieved by quantity rationing. The chapter also presents an evaluation of the equilibrium concepts used in this area.

Chapter 19 Temporary general equilibrium theory

Optimal tax and spending allocation rules are derived in an endogenous growth model where raw labor must be educated to become productive and infrastructure services affect the schooling technology. Growth- and welfare-maximizing solutions are compared under nonseparable utility in consumption and government-provided services. Among other results, it is shown that the optimal share of spending on infrastructure depends not only on production elasticities but also on the quality of schooling and the degree to which infrastructure services affect the production of educated labor. Congestion costs in education raise the optimal share of spending on infrastructure. Copyright 2008 , Oxford University Press.

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Fiscal policy and endogenous growth with public infrastructure

Dedicated to the late Professors David Hawkins and Hukukane Nikaido Abstract. It is shown that (a weak version of) the Hawkins-Simon condition is satisfied by any real square matrix which is inverse-positive after a suitable permutation of columns or rows. One more characterization of inverse-positive matrices is given concerning the Le Chatelier-Braun principle. The proofs are all simple and elementary.

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Two characterizations of inverse-positive matrices: the hawkins-simon condition and the le chatelier-braun principle ∗

Growth versus welfare in a model of nonrival infrastructure

Comparative Statics for the Private Provision of Public Goods in a Conjectural Variations Model with Heterogeneous Agents

The paper constructs a model of endogenous growth where infrastructure is an accumulable stock generating a nonrival input service. A typical market economy cannot attain the socially optimum steady state path, since nonrivalry precludes competitive pricing of infrastructure. However, there exist agent specific prices for the infrastructural service, a price for the infrastructural stock, a rate of interest, and a subsidy for the representative household that can sustain the optimal path as a dynamic Lindahl equilibrium. The rates of return from physical and infrastructural capital equal the rate of interest. Investment programs are socially optimum. The government's budget is balanced.

Lindahl Pricing, Nonrival Infrastructure, and Endogenous Growth

Dynamics, Consistent Conjectures, and Heterogeneous Agents in the Private Provision of Public Goods

The book deals with Growth Theory, one of the most interesting as well as important subjects universities across the world teach at the Master's level. It is based on lectures delivered to Master's level students and Research Scholars at the Indian Statistical Institute, the Jawaharlal Nehru University, the Delhi School of Economics, the Indian Institute of Technology, Kharagpur, Kobe University, Japan, and the City University of Hong Kong. In order to take into account student inputs, several batches of students were exposed to the ideas presented here, who provided their feedbacks to the author. The book provides an in depth treatment of Old Growth Theory and then follows it up with the best known works in New Growth Theory. In addition, to ensure that the book serves the purpose of a classroom textbook, the exercises have been added at the end of each chapter that teachers can use to test the understanding of the students. The first two chapters deal with Control Theory which is explained in detail with reference to the best known of Growth Theory Models, viz. Robert Solow's neoclassical model of growth. These ideas extend easily to the later chapters as well. The first two chapters of the book can be used for a first year Master's level course in Macroeconomics as well, though the book as a whole deals with the subject of Economic Growth, which is usually taught as a special paper at the second year Master's level. Finally, given that the book starts off with numerical examples relating to the Indian economy, it should appeal to students studying in Indian universities. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/economicsfinance/9780198069966/toc.html

Dipankar Dasgupta

Papers

Growth versus welfare in a model of nonrival infrastructure

Comparative Statics for the Private Provision of Public Goods in a Conjectural Variations Model with Heterogeneous Agents

Lindahl Pricing, Nonrival Infrastructure, and Endogenous Growth

Dynamics, Consistent Conjectures, and Heterogeneous Agents in the Private Provision of Public Goods

Modern Growth Theory