Showing papers in "Recherches Economiques De Louvain-louvain Economic Review in 1991"

Keynes' aggregate supply function and the principle of effective demand

Abstract: The principle of effective demand decomposes in two distinct propositions, one pertaining to the analysis of actual, the other to the analysis of equilibrium states. The authors suggest that Keynes' apparatus of aggregate supply and demand decomposes correspondingly in two pairs of aggregate functions. They thus extend to the supply side a duality which had already been noticed on the demand side. Such an extension leads to a reconsideration of the debate between two conflicting views of the aggregate supply function which originated in Patinkin's contributions. The authors' argument emphasizes the role of aggregation over optimizing producers, and the status of intermediate goods and imperfect competition.

Diminution des cotisations patronales à la sécurité sociale et création d'emplois en Belgique

Abstract: Cet article analyse l'effet sur l'emploi d'une baisse des cotisations patronales a la securite sociale. Selon la version belge du modele macrosectoriel HERMES, cet effet est assez faible, en particulier si on le compare a des resultats issus du modele de desequilibre concu au sein du European Unemployment Program. L'article decrit le modele HERMES et presente une simulation des effets de baisse de cotisation patronale. Trois sources d'explication sont avancees pour expliquer le desaccord entre le modele macrosectoriel HERMES et le modele macroeconomique de desequilibre: (1) le caractere keynesien predominant d'HERMES par opposition a l'approche de desequilibre, (2) les equations d'exportation et (3) les effets de substitution entre le capital et le travail.

Cross Section Engel Curves over Time

Abstract: Methods for nonparametric estimation and comparison of cross section Engel curves are presented and applied to U.K. expenditure data. Real Engel curves (with quantity demanded and real total expenditure on the axes) vary over time, but their shapes are generally quite stable. Mean normalized Engel curves are defined and are found not to vary greatly over time. Consequences of such invariance for the testing of microeconomic demand models are investigated.

Interrelation, structural changes and cointegration in a model for manufacturing demand in the Nederlands

Abstract: This paper is concerned with dynamic factor demand systems First, for the intertemporal expected profit maximization problem given quadratic adjustment costs, it is shown that interrelations between factor inputs result from specific characteristics of the innovations in the technology – not from substitution or adjustment costs trade-off possibilities Second, in line with the Lucas critique, the impact of a structural change in the process of the explanatory variables on the factor demand decision rules is analyzed Third, the non-stationarity of the factor demand series can be accounted for by that of relative factor prices when demand and price series are cointegrated The model which allows for structural changes in the processes of the explanatory variables and for cointegration is applied to quarterly data for manufacturing in the Netherlands for the period 19711 – 1984 IV

Double risque moral et délégation

Abstract: Cet article etudie un modele principal-agent dans lequel se pose un probleme de double risque moral: ni le comportement de l'agent ni celui du principal sont des variables verifiables. On montre que si le principal doit fournir un effort qui affecte les interets de l'agent, iltrouve alors toujours profitable de deleguer cette tâche a une tierce partie — plutot que de la prendre en charge lui-meme. Cette analyse permet, entre autres choses, de justifier une structure hierarchique a trois niveaux, meme dans des contextes tres simples. On discute des inefficacites que l'existence de coalitions entre les differents niveaux de la hierarchie peut provoquer dans une telle structure. Finalement, on compare la structure hierarchique proposee a une structure a la Mirrlees.

Les anticipations rationnelles et la rationalité: examen de quelques modèles d'apprentissage

Abstract: On se propose ici d'explorer la semantique de l'hypothese d'anticipations rationnelles telle qu'on la trouve formalisee chez Muth et Lucas. On montre tout d'abord que cette hypothese appelle une interpretation tantot comme condition d'equilibre, tantot comme exigence de rationalite individuelle. On s'interroge ensuite sur la compatibilite de ces deux interpretations, avant de conclure par la negative. Il n'est meme pas etabli qu'une fois a l'equilibre d'anticipations rationnelles, des agents rationnels ne devraient pas en devier. L'hypothese apparait comme un concept formel de stationnarite en univers stochastique plutot qu'elle ne decrit la rationalite cognitive des agents. L'argumentation repose sur une analyse des difficultes et paradoxes qui surgissent dans les modeles de revision des croyances (ou d'“apprentissage des anticipations rationnelles”).

On the Difference between Income and Consumption Taxes when the Return to Savings is Uncertain

Abstract: The taxation of income is usually criticized for the efficiency loss that results from distorting the intertemporal consumption decision. This argument is rejected in a world where the return to savings is random. It is shown that a distorting marginal tax on uncertain interest income serves as partial insurance and that this effect outweighs the efficiency loss, if only the first marginal dollar in tax revenue is valued less elastically than the last dollar spent on private consumption. A consumption tax — even one with intertemporally differentiated rates — would not provide insurance under these circumstances. The explicit consideration of uncertainty thus gives support to taxes that allow differentiation between the safe withdrawal of savings and the random return thereon.

Vertical product differentiation and taste differences

Abstract: The finiteness condition of vertical product differentiation models is translated into the taste distribution model first analyzed by Mussa and Rosen. For a utility function linear in quality, the necessary and sufficient condition for finiteness is that the cost function with respect to quality is strictly concave. Furthermore, for these cost functions, in duopoly, higher quality always implies a higher market share at the Nash equilibrium in prices. The n-firm case is briefly discussed, and some implications for marketing strategy of new products are presented.

Ratios de fonds propres et comportement des banques

Abstract: On analyse l'effet sur les risques pris par les banques et la structure de leur actif de l'imposition d'un rapport minimal entre leurs fonds propres et les actifs qu'elles detiennent. Ces effets dependent en particulier de la representation du comportement des banques: comme une firme subissant un risque de faillite ou comme un agent economique realisant un choix optimal de portefeuille. Ils resultent aussi de la nature de la regle de capitalisation, differenciee ou non, et du mode de remuneration des depots bancaires.

Induced Socio-economic Behavior in Long Waves: The Recurrence of Normal and Revolutionary Economic Science

Abstract: The progression of economic thought can be characterized as the periodic incidence of major advances, including Adam Smith's The Wealth of Nations, David Ricardo's Principles of Political Economy and Taxation, Alfred Marshall's Principles of Economics, and John Maynard Keynes' The General Theory. In the Kuhnian context of revolutionary and normal science, each revolutionary advance generates a theoretical structure that dominates the normal scientific study of economics for several decades. However, in contrast to the conventional Kuhnian explanation, this research hypothesizes that revolutionary and normal science in economics is part of a general pattern of socioeconomic behavior induced by long waves.

Demand Management Towards Internal and External Balance in an Open Economy with Centralized Wage Setting

Abstract: The efficiency of demand management policies is considered in a two- sector model of a small and open economy with centralized wage bargaining. Differences in labour demand between sectors are shown to have qualitative implications for the responsiveness of wages to changes in out- put prices. Wage increases induced by increased demand in one sector may, thus, crowd out activity in other sectors, and this has important con- sequences for the effects of demand management policies on internal and external goals. An often proposed and practised policy of switching demand from tradeables to non-tradeables to ensure internal and external balance is extensively discussed.

Races of research and development between firms with different incentives to innovate

Abstract: In this paper we study a one-shot game of R & D between two firms which differ in their incentives to innovate. We analyse this problem when the R & D technology displays smoothly decreasing returns as well as when increasing returns in the form of indivisibilities prevail. In the first case we show that the magnitude of the ratio between the discount rate and the productivity of R & D expenditure may be a critical parameter in ranking firms' probabilities of winning the race. In the second case, we prove that the firm with the higher profit incentive invests in R & D at least as much as the firm with the higher competitive threat. We then apply these results to a homogeneous duopoly under Bertrand or Cournot competition in the product market.

A macro disequilibrium model for Switzerland

Abstract: This paper presents a disequilibrium model for Switzerland, focusing on the production sector and the associated spillover effects. Firms' decisions on output supply, labor demand and investment are analysed on basis of a vintage approach, involving pressure of demand, profitability and relative prices as determinants. Macro relationships are derived by aggregating over micro markets on which regimes are allowed to differ. In the resulting nonlinear macro structure the response of output and employment to demand-side and supply-side factors varies through the cycle, depending on the regime-mix (measured by survey data). Inventories and unfilled orders act as buffer stocks, modifying the dynamic link between current demand and output.

On the Role of Monetary Factors in Business Cycle Models

Abstract: Granger-causality tests and innovation analyses based on Vector Autoregression models seem to deny any role for monetary factors in generating and shaping business cycle fluctuations. The present paper shows that such empirical support for Real Business Cycle theories is flawed. In particular, it is demonstrated that an extended version of the Lucas paradigm can explain the existing evidence rather accurately, when changes in policy regimes are explicitly modelled.

Non-Wage Labour Costs and Productivity Shifts in an Efficiency-Wage-Hours Model

Abstract: The efficiency-wage-hours model allows for efficiency effects from both wages and working hours. It is shown that it is essential for static-comparative results to distinguish between working hours per worker and the number of workers in an efficiency-wage-hours model contrary to the basic efficiency-wage model. The wage rate and working hours increase with increasing non-wage labour costs while the employment level decreases. This yields the possibility to influence these variables by means of government action. There does not only exist an efficiency wage but also an efficiency working time. Both are invariant with respect to changes in productivity.

Introduction aux processus d'évolution du prix des actions en temps continu et efficience du marché boursier

Abstract: L’objet premier du papier est de presenter les principales hypotheses economiques necessaires a l’elaboration des processus “Ito” de diffusion en temps continu decrivant l’evolution du rendement des actifs financiers. Le papier discute le degre de generalite de ces hypotheses et fournit egalement une derivation utile du lemme d’Ito. Dans le contexte de l’efficience du marche financier, il est demontre qu’un processus Ito ne repond pas de facon generale aux proprietes de la martingale ou du “random walk” pas plus qu’il n’implique que les rendements soient necessairement normalement distribues.

Efficience informationnelle du marché boursier: vérification empirique et implications théoriques

Abstract: Dans la litterature financiere, le concept d'efficience des marches illustre, en fonction du critere retenu, trois situations differentes. Ainsi, un marche est considere comme efficient du point de vue de l'allocation des ressources, lorsque le prix des actifs evolue de maniere a egaliser les taux marginaux de rendement ajustes pour le risque entre tous les epargnants et tous les investisseurs. Alternativement, un marche est defini comme efficient d'un point de vue operationnel, si les couts de transaction sont fixes a des niveaux tels que les teneurs de marches realisent des profits concurrentiels. Enfin, un marche est juge efficient d'un point de vue informationnel, quand le prix des actifs prend en compte toute l'information disponible de facon a refleter les valeurs economiques sous-jacentes de ces derniers. Bien que ces trois situations soient visiblement interdependantes, ce travail se focalise uniquement sur l'efficience informationnelle du marche boursier.