https://www.sfu.ca/~wainwrig/Econ400/jensen-meckling.pdf

Theory of the firm: Managerial behavior, agency costs and ownership structure

In this paper, the concept of social capital is introduced and illustrated, its forms are described, the social structural conditions under which it arises are examined, and it is used in an analys...

/pdf/social-capital-in-the-creation-of-human-capital-1836wo2872.pdf

Social Capital in the Creation of Human Capital

The social world is accumulated history, and if it is not to be reduced to a discontinuous series of instantaneous mechanical equilibria between agents who are treated as interchangeable particles, one must reintroduce into it the notion of capital and with it, accumulation and all its effects. Capital is accumulated labor (in its materialized form or its ‘incorporated,’ embodied form) which, when appropriated on a private, i.e., exclusive, basis by agents or groups of agents, enables them to appropriate social energy in the form of reified or living labor. It is a vis insita, a force inscribed in objective or subjective structures, but it is also a lex insita, the principle underlying the immanent regularities of the social world. It is what makes the games of society – not least, the economic game – something other than simple games of chance offering at every moment the possibility of a miracle. Roulette, which holds out the opportunity of winning a lot of money in a short space of time, and therefore of changing one’s social status quasi-instantaneously, and in which the winning of the previous spin of the wheel can be staked and lost at every new spin, gives a fairly accurate image of this imaginary universe of perfect competition or perfect equality of opportunity, a world without inertia, without accumulation, without heredity or acquired properties, in which every moment is perfectly independent of the previous one, every soldier has a marshal’s baton in his knapsack, and every prize can be attained, instantaneously, by everyone, so that at each moment anyone can become anything. Capital, which, in its objectified or embodied forms, takes time to accumulate and which, as a potential capacity to produce profits and to reproduce itself in identical or expanded form, contains a tendency to persist in its being, is a force inscribed in the objectivity of things so that everything is not equally possible or impossible. And the structure of the distribution of the different types and subtypes of capital at a given moment in time represents the immanent structure of the social world, i.e. , the set of constraints, inscribed in the very reality of that world, which govern its functioning in a durable way, determining the chances of success for practices.

Forms of Capital

This paper considers the prospects for constructing a neoclassical theory of growth and international trade that is consistent with some of the main features of economic development. Three models are considered and compared to evidence: a model emphasizing physical capital accumulation and technological change, a model emphasizing human capital accumulation through schooling, and a model emphasizing specialized human capital accumulation through learning-by-doing.

The mechanics of economic development

http://individual.utoronto.ca/zheli/sa1.pdf

On the mechanics of economic development

K EYNESIAN models have been used extensively in recent decades to predict and interpret movements in income. In its simplest form a Keynesian model contains one key relation, a consumption function connecting current expenditures on consumption with current income and perhaps other variables as well. This function yields an estimate of autonomous consumption and of the multiplier. These, in turn, yield an estimate of the level of income corresponding to any assumed or predicted level of investment (or, more generally, autonomous non-consumption expenditures). This model has been complicated in many ways; in all its variants, however, the consumption function plays a central role. In consequence, much attention has been devoted to empirical studies of the consumption function. The ultimate objective of predicting income has been replaced by the proximate objective of predicting consumption from current income and other variables. An unnoticed result of this shift in objective has been the adoption of a criterion for judging alternative consumption functions that, however relevant for the proximate objective, can be seriously misleading for the ultimate objective. The aim of this paper is to document this assertion and point out some of its implications. Since this can be done fully with the simplest model, and since the point in question I We are indebted to Phillip Cagan and Carl Christ for helpful comments. has no direct relation to the controversy that has raged about the Keynesian approach, we shall assume throughout that the simple model described in the preceding paragraph is both theoretically and empirically applicable. In judging alternative empirical consumption functions, the major criterion typically used is the error made on the average in estimating consumption from the function, albeit with some allowance for such considerations as the number of degrees of freedom used in estimating the function, the economic plausibility of the signs of the parameters, and so on. Suppose that two alternative empirical functions are estimated for the same historical period and are alike with respect to the subsidiary considerations and that the standard error of estimate of consumption is S per cent of the mean value of consumption for one function and 10 per cent for the other. Suppose that these functions are used to estimate retrospectively income in each year of the same historical period from the known magnitude of investment in that year. Does it follow that the first function will give more accurate estimates of income than the second? Surprisingly enough, the answer is "No." The error in the estimate of income depends not only on the accuracy of the estimate of consumption but also on the form of the consumption function -in particular, on the fraction of consumption which it designates as "autonomous." Section I of this paper demonstrates

A Statistical Illusion in Judging Keynesian Models

Medical care at the end of life, estimated to contribute up to a quarter of US health care spending, often encounters skepticism from payers and policy makers who question its high cost and often minimal health benefits. It seems generally agreed upon that medical resources are being wasted on excessive care for end-of-life treatments that often only prolong minimally an already frail life. However, though many observers have claimed that such spending is often irrational and wasteful, little explicit and systematic analysis exists on the incentives that determine end of life health care spending. There exists no positive theory that attempts to explain the high degree of end-of life spending and why differences across individuals, populations, or time occur in such spending. This paper attempts to provide the first rational and systematic analysis of the incentives behind end of life care. The main argument we make is that existing theoretical and empirical analysis of the value of life do not apply, and often under-values, the value of life near its end and terminal care. We argue that several factors drive up the value of life near its end including the low opportunity cost of medical spending near ones death, the value of hope including living into new innovations, and potential positive effect of on the value of life from being frail. We calibrate the ex-post value of hope associated with treatments for HIV patients to be as much as five times as high as standard estimates of treatment value.

/pdf/the-value-of-life-near-its-end-and-terminal-care-1jtbtnxtdv.pdf

The Value of Life Near its End and Terminal Care

A number of commentators have expressed concern about the high level of debt incurred by the average American While high debt is an appropriate response to low interest rates and an expected growth in income, it has also been suggested that it reflects consumption patterns that are suboptimal1 One possibility is that a competition for social status, via the purchase of conspicuous goods, has led to excessive consumption2 Indeed, the purchase of many visible goods— such as cars, boats, home appliances, jewelry, and electronic equipment—appears to be motivated, at least in part, by a desire to advance in the social ranking In this race, where one consumer’s gain is another’s loss, there can be no winners on average, and the resources deployed are thus wasted from a social perspective3 Wasteful consumption, however, is not necessarily the same as excessive borrowing Consumers, for instance, might be as eager to outspend their neighbors in the future as they are in the present—

/pdf/peer-comparisons-and-consumer-debt-1wm2pwmmoj.pdf

Peer Comparisons and Consumer Debt

This paper concentrates on both the positive and normative effects of punishments that enforce laws to make production and consumption of particular goods illegal, with illegal drugs as the main example. Optimal public expenditures on apprehension and conviction of illegal suppliers obviously depend on the extent of the difference between the social and private value of consumption of illegal goods, but they also depend crucially on the elasticity of demand for these goods. In particular, when demand is inelastic, it does not pay to enforce any prohibition unless the social value is negative and not merely less than the private value. We also compare outputs and prices when a good is legal and taxed with outputs and prices when the good is illegal. We show that a monetary tax on a legal good could cause a greater reduction in output and increase in price than would optimal enforcement, even recognizing that producers may want to go underground to try to avoid a monetary tax. This means that fighting a war on drugs by legalizing drug use and taxing consumption may be more effective than continuing to prohibit the legal use of drugs.

/pdf/the-economic-theory-of-illegal-goods-the-case-of-drugs-32j89its2u.pdf

Gary S. Becker

Papers

A Statistical Illusion in Judging Keynesian Models

The Value of Life Near its End and Terminal Care

Peer Comparisons and Consumer Debt

The Economic Theory of Illegal Goods: The Case of Drugs

The Economics of Discrimination.