|
on Heterodox Microeconomics |
|
Issue of 2018‒09‒10
twenty-two papers chosen by Carlo D’Ippoliti Università degli Studi di Roma “La Sapienza” |
| By: | Giovanni Scarano |
| Abstract: | Since 2013 various eminent mainstream economists have proposed reviving the doctrine of “secular stagnation”. According to these authors, the only explanation for this new trend could be a negative Wicksellian natural rate of interest, produced by an excess of saving over investment at any positive interest rate. But the idea that the real world economy has entered into a new stagnation trend is really the other side of the coin in explaining the extraordinary long-term growth that characterised the aftermath of World War II. This peculiar growth period has been the main research objective of Régulation Theory, which found accumulation regimes and corresponding modes of regulation as its major determinants. In the paper the theoretical explanations of the new secular stagnation theory are compared with those of Régulation theory and with the original Marxist approaches that initially inspired the French régulation theorists. |
| Keywords: | Equilibrium Interest Rate, Business Cycles, Crisis, Rate of Profit, Profitability |
| JEL: | B51 E11 E12 E32 E43 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0241&r=hme |
| By: | Hyun Woong Park (Denison University, Department of Economics); Dong–Min Rieu (Chungnam National University, Department of Economics) |
| Abstract: | In this paper, we report a puzzling result about the monetary expressions of labor time (MELTs) of the productive and unproductive sectors. Since part of the aggregate value produced in productive sectors is transferred to unproductive sectors, the productive sector’s MELT is a measure of value realized in productive sectors while the unproductive sector’s MELT is a measure of value transferred to unproductive sectors. Using the national income data for the U.S. economy during 1987-2016 and for the Korean economy during 1993-2016, it is found that the MELT of the aggregate productive sector and the MELT of the aggregate unproductive sector have been moving in a very close lockstep in both countries during the entire sample periods. We build a model which explicitly formalizes the unproductive sector as not producing any value but making the value production process efficient, and find that the co–movement of the two MELTs is not an optimal condition. We also suggest some ex post implications of it, including what the puzzling result implies on the relation between unproductive sector and capital accumulation. |
| Keywords: | unproductive labor, monetary expression of labor time |
| JEL: | B51 E11 D46 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2018-15&r=hme |
| By: | Lanz, Bruno; Dietz, Simon; Swanson, Tim |
| Abstract: | The world is banking on a major increase in food production, if the dietary needs and food preferences of an increasing, and increasingly rich, population are to be met. This requires the further expansion of modern agriculture, but modern agriculture rests on a small number of highly productive crops and its expansion has led to a significant loss of global biodiversity. Ecologists have shown that biodiversity loss results in lower plant productivity, while agricultural economists have linked biodiversity loss on farms with increasing variability of crop yields, and sometimes lower mean yields. In this paper we consider the macro-economic consequences of the continued expansion of particular forms of intensive, modern agriculture, with a focus on how the loss of biodiversity affects food production. We employ a quantitative, structurally estimated model of the global economy, which jointly determines economic growth, population and food demand, agricultural innovations and land conversion. We show that even small effects of agricultural expansion on productivity via biodiversity loss might be sufficient to warrant a moratorium on further land conversion. |
| Keywords: | agricultural productivity; biodiversity; endogenous growth; food security; land conversion; population |
| JEL: | N0 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:84194&r=hme |
| By: | Quentin Lippmann (Paris School of Economics); Claudia Senik (Sorbonne University and Paris School of Economics) |
| Abstract: | This paper argues that the socialist episode in East Germany, which constituted a radical experiment in gender equality in the labor market and other instances, has left persistent tracks on gender norms. We focus on one of the most resilient and pervasive gender gaps in modern societies: mathematics. Using the German division as a natural experiment, we show that the underperformance of girls in math is sharply reduced in the regions of the former GDR, in contrast with those of the former FRG. We show that this East-West difference is due to girls' attitudes, confidence and competitiveness in math, and not to other confounding factors, such as the difference in economic conditions or teaching styles across the former political border. We also provide illustrative evidence that the gender gap in math is smaller in European countries that used to be part of the Soviet bloc, as opposed to the rest of Europe. The lesson is twofold: (1) a large part of the pervasive gender gap in math is due to social stereotypes; (2) institutions can durably modify these stereotypes. |
| Keywords: | gender gap in math, institutions, German division, gender stereotypes. |
| JEL: | I2 J16 J24 P36 Z13 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2018-467&r=hme |
| By: | Terhi Ravaska (University of Tampere and Labour Institute for Economic Research, Finland) |
| Abstract: | In this paper I study Finnish top incomes from a gender perspective using the Finnish register-based panel data over the period of 1995-2012. I find that that the under-representation of women at the top has been quite persistent in the overall top but the proportion of women in the top 1\% has increased over 18 years. Women’s wage share at the top has increased while the self-employment income has decreased. The top income females more often have an entrepreneurial background and are more often sharing a household with a high-income spouse. The gender-specific income distributions show that female incomes are less dispersed. In this study I also test whether top incomes can be assumed to be Pareto distributed. While the joint and men’s top income distributions can be approximated with Pareto distribution throughout the observation period, the Pareto assumption gets more support for women after the year 2000. The female top income receivers have caught up with top earning men over time but I also show that females are more likely to move downwards from the top than men. |
| Keywords: | income distribution, gender inequality, top incomes, income mobility. |
| JEL: | D31 J16 D63 D30 |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2018-469&r=hme |
| By: | Up Sira Nukulkit |
| Abstract: | In this paper, I investigate the question of "the effect of progress upon distribution" based on the analyses of Hicks, Robinson, Harrod, Salter, Kaldor, Samuelson, and Kennedy. The paper aims to address a neglected and controversial theoretical argument on neutral technical progress related to the measure of value that preceded and then continued to the period of the Cambridge Capital Theory Controversy. I focus on Kennedy's writings and his solutions to the complications between the measure of value and technical progress. Important intuitions behind the measure of value are crucial to the formulation of neutral technical progress in both the post-Keynesian and the neoclassical-Keynesian endogenous growth models. The paper concludes with mathematical illustrations of neutral technical progress theories. |
| Keywords: | Neutral balanced growth, Capital controversy, Growth and distribution JEL Classification: B22, 033, E12 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2018_05&r=hme |
| By: | Krumbiegel, Katharina; Maertens, Miet; Wollni, Meike |
| Abstract: | The transformation of global agri‐food systems has led to the increased establishment of exportoriented horticultural plantations in developing countries. These labor intense production sites are associated with feminized employment patterns for the delicate handling of fruits and vegetables and therefore provide employment opportunities for women in rural areas. However, the social implications of these developments for women workers' roles in their households remain hardly understood. We address this research gap by assessing a wide range of indicators reflecting women’s empowerment. We use primary survey data of 422 married households in Ghana, living in areas of large‐scale pineapple plantations. We apply entropy balancing, a new re‐weighting technique, and combine this with regression analysis. We find that female horticultural wage workers contribute a major share to the household’s income, are more mobile, have better control over assets and reduced responsibilities in household chores. Women workers also report having more input into household decision‐making. |
| Keywords: | Agribusiness, Community/Rural/Urban Development, Consumer/Household Economics |
| Date: | 2017–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:257241&r=hme |
| By: | Addison, John T.; Portugal, Pedro; Vilares, Hugo |
| Abstract: | Against the backdrop of its industrial relations architecture, characteristic of the ‘southern European group’ and intimately linked to the recommendations of the Troika, this paper examines four key aspects of Portuguese collective bargaining. First, it provides definitive estimates of private sector union density for that nation. Second, it models the determinants of union density at firm level. Third, it yields estimates of the union wage gap for different ranges of union density. The final issue examined is contract coverage. The received notion that the pronounced reduction in the number of industry-wide agreements and extension ordinances of late is to be equated with a fall in coverage is shown to be a chimera, the number of workers covered by new and existing agreements remaining largely unaffected by the economic crisis. The reduced frequency of new agreements and extensions is instead attributed to downward nominal wage rigidity in low-inflation regimes. |
| JEL: | N0 |
| Date: | 2017–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:67962&r=hme |
| By: | Depenbusch, Lutz |
| Abstract: | Using survey data from Central Kenya, I find that the difference in prices received by female compared to male vegetable traders changes significantly in men's favor when the size of the transaction increases, ceteris paribus. This pattern in the price gap drives a gender difference in the value added by traders. If women had the same characteristics as men, they would make a 26.82 percent higher mark-up than men in the lowest quartile by traded quantities and receive the same price as men in the top quartile. Amongst suppliers, the price difference between men and women is significantly more favorable for women in rural compared to urban areas, when controlling for differences in other characteristics. Due to this effect, women experience a much smaller price reduction than men when selling in rural instead of urban areas. However, differences in the observable characteristics prevent female traders and suppliers from utilizing the advantage they have in part of the market. The results highlight the barriers in integrating women in large-scale vegetable trade, despite their traditional role in local vegetable trade. Furthermore, I show that gender values of the traders can explain the price gap among rural suppliers. This supports earlier findings connecting the gender price gap with gender stereotypes. |
| Keywords: | Industrial Organization, Institutional and Behavioral Economics, Marketing |
| Date: | 2017–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gagfdp:264021&r=hme |
| By: | Kerwin Kofi Charles; Jonathan Guryan; Jessica Pan |
| Abstract: | We study how reported sexism in the population affects American women. Fixed-effects and TSLS estimates show that higher prevailing sexism where she was born (background sexism) and where she currently lives (residential sexism) both lower a woman's wages, labor force participation and ages of marriage and childbearing. We argue that background sexism affects outcomes through the influence of previously-encountered norms, and that estimated associations regarding specific percentiles and male versus female sexism suggest that residential sexism affects labor market outcomes through prejudice-based discrimination by men, and non-labor market outcomes through the influence of current norms of other women. |
| JEL: | J12 J13 J16 J22 J31 J7 Z10 |
| Date: | 2018–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:24904&r=hme |
| By: | Mann, Stefan |
| Abstract: | The socioeconomic discourse on varieties of capitalism has revealed remarkable insights into prevailing macroeconomic patterns. This paper transforms this macro approach and uses the agricultural sector to test its applicability for the sectoral (meso) level. Agricultural policy indicators, environmental variables, average farm size, self-sufficiency and per capita food expenditures are used to cluster developed countries. Three groups emerge: one group consists of active exporters with large farms and low, if any, subsidies and a high level of emissions per output, while another group combines a high level of public support and high food expenditure with low self-sufficiency and good environmental performance. As the third group is mostly situated in between the other two, we conclude that the varieties of capitalist agriculture are largely placed on a one-dimensional scale. |
| Keywords: | Agricultural and Food Policy, International Development |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:261983&r=hme |
| By: | Tseveenbolor Davaa; David Kiefer; Valeria Szekeres |
| Abstract: | This paper examines the effects of macroeconomic policy reforms of trade and investment liberalization on gender earnings inequality during the post-transition period using panel data from Hungarian Wage and Earnings Survey and other statistical sources for 21 industrial categories. The results of the econometrics analysis with regression estimations show that while both women and men in foreign-invested enterprises earned more than their counterparts employed in domestically-owned enterprises, women earned less in export-oriented enterprises than in domestic market-oriented enterprises, while men’s earnings are not significantly different in export versus domestic. Also foreign direct investment (FDI) inflows and export orientation contributed to a greater gender earnings difference. While FDI enterprises dominantly contribute to export growth in Hungary, the tests indicate that these two features had independent effects on earnings levels and gaps. These results hold after controlling for human capital variables (average age and education level in industry), industrial segmentation (female share of employment), labor productivity, and the economic cycle (unemployment rates). This study, a first for Hungary, contributes to research of wage gaps in post-transition economies. |
| Keywords: | Gender earnings inequality, transition economy, economic liberalization, free trade, foreign direct investment JEL Classification: F6, J3, B540 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2018_03&r=hme |
| By: | Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | La problématique des limites de la sphère marchande est aujourd'hui centrale en science sociale. D'où proviennent ces limites ? Comment sont-elles justifiées d'un point de vue moral ? L'objectif de ce texte est de tenter de dégager le fondement moral du rejet de la marchandisation de certains objets. Pour ce faire, on partira de l'étude d'un type d'objet (au sens physique du terme) dont la marchandisation est aujourd'hui largement rejetée : le rein. On essaiera dans un premier temps de comprendre le fondement moral de ce rejet. On fera ensuite le parallèle entre cette « économie morale » et celle qui s'était dressée contre la montée en puissance de l'économie de marché au moment de la révolution industrielle. On observera alors une similarité certaine entre les deux cas. |
| Keywords: | marchés aux organes, Polanyi, Marx, aliénation, expropriation originelle |
| JEL: | A14 B00 D63 D64 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2018-19&r=hme |
| By: | Helena Fialová (Czech Technical University in Prague); Lenka Adamcová (Metropolitan University Prague); Alena Ambro?ová (Czech Technical University in Prague) |
| Abstract: | Modern economic theories develop the original three-sectors economy into four- or even five sectors economy when creating the quarternary (or even quinary) sector of the economy. The quarternary sector should play the role of ?an engine? pushing and pulling the economic growth of the respective country up. Industries included in the quaternary sector consists of intellectual activities often associated with technological innovations (called the knowledge economy) based on high degree of education of labor. Some economists go on and create the quinary sector separating activities of top executives and officials in fields as government, science, universities and culture and also activities covering childcare and education.This paper demonstrates another way of splitting the broad tertiary sector. It divides industries included in the tertiary sector into two groups: market and non-market services according to the definition of NACE or ISIC (statistical classifications used in EU or UN). The tertiary sector in the paper covers only market services. Non-market services on the other hand are represented by the quartenary sector and they comprise 4 NACE-CLIO branches. The basic idea for dividing the tertiary sector into two groups mentioned above was the similarity of market services with business activities included in the primary and secondary sectors. To some degree market services are closely connected with the performance of businesses in the primary and secondary sectors. Non-market services on the other hand, which are services provided usually free of charge or for a symbolic payment, include a special field of activities, which countries only on high economic levels ?can afford? to grant and only with inceasing economic level may enlarge and develop. The paper proves the conclusion of classical economists about changing shares of three production sectors with economic growth of a country in favor of the tertiary sector. The paper proved also a new hypothesis, namely that increasing economic level of a country is strongly linked to the growing share of non-market services, while the link to the share of market services is not so obvious.The analysis includes statistical series of data of main member countries of European Union. The mathematical background and applied analytical functions are described, as well. A specialised software IBM SPSS has been used for correlation and regression analyses. All results are presented in the form of tables and graphs. |
| Keywords: | National income analysis, three-sector analysis, share of labor force in GDP, tertiary sector, quartenary sector, market services, non-market services. |
| JEL: | A10 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:7809648&r=hme |
| By: | Wellner, Marie; Theuvsen, Ludwig |
| Abstract: | Community Supported Agriculture (CSA) erfährt als innovative Graswurzelbewegung des Agrar- und Ernährungssektors gegenwärtig einen großen gesellschaftlichen Zuspruch: Durch die Entkopplung des landwirtschaftlichen Einkommens von der Erntemenge und -qualität wird eine nachhaltigere Lebensmittelproduktion auf lokaler Ebene angestrebt, im Rahmen derer ethische Aspekte Berücksichtigung finden. Insbesondere für kleinere landwirtschaftliche Betriebe kann CSA als innovatives Bewirtschaftungskonzept einen Ausweg aus dem Dilemma des „Wachsen oder Weichen“ bieten und eine interessante Alternative zu etablierten Wertschöpfungsketten darstellen. Ziel des Beitrags ist es, die bislang unbekannten Einflussfaktoren auf die Teilnahmebereitschaft von Landwirten am CSA-Konzept zu analysieren und mögliche politische Förderansätze abzuleiten. Die Anwendung der Unified Theory of Acceptance and Use of Technology (UTAUT) zeigt, dass die Teilnahmebereitschaft der Landwirte an CSA positiv von ihrer hedonischen Motivation und begünstigend wirkenden betrieblichen Strukturen beeinflusst wird, während sich Aufwendungen, die als Folge der Umsetzung von CSA erwartet werden, hemmend auf die Teilnahmebereitschaft auswirken. Um die Verbreitung des CSA-Konzeptes und die damit verbundene Adaption landwirtschaftlicher Betriebe an veränderte gesellschaftliche Anforderungen zu fördern, wird (agrar-)politische Aufklärungsarbeit als notwendig erachtet. |
| Keywords: | Marketing |
| Date: | 2018–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi18:276223&r=hme |
| By: | Bobjonov, I.; Teuber, R. |
| Abstract: | This study discusses the importance of cooperation in Central Asian Uzbekistan. Determinants of cooperation as well as benefits from cooperation are investigated using survey data of 405 farms in the central grain producing region of Uzbekistan. The study distinguishes between formal and informal cooperation which could have vital importance in transition economies, which is not explicitly discussed in the existing literature so far. The analysis of the determinants shows that participation in cotton procurement mechanisms is the main factor which brings farmers to membership in formal cooperatives. Informal cooperation seems to be more pronounced among middle-scale and commercially-oriented farmers than among large-scale or subsistence-oriented household farms. Larger demand for informal cooperation than formal cooperation is explained by limited type of services in formal cooperatives designed to serve cotton producers. Therefore formal cooperatives need to diversify their services to cover wider demand currently fulfilled by informal cooperation. Besides, our results indicate that participation in both formal and informal cooperatives has a positive effect on wheat productivity. This positive impact of cooperation might stem from improved access to machinery, proper timing and increased input quality. |
| Keywords: | Agricultural and Food Policy, International Development |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae18:276002&r=hme |
| By: | Rommel, Jens; Weltin, Meike |
| Abstract: | In an analysis of articles published in ten years of the American Economic Review, Deirdre McCloskey and Stephen Ziliak have shown that economists often fail to adequately distinguish economic and statistical significance. In this paper, we briefly review their arguments and develop a ten-item questionnaire on the statistical practice in the Agricultural Economics community. We apply our questionnaire to the 2015 volumes of the American Journal of Agricultural Economics, the European Review of Agricultural Economics, the Journal of Agricultural Economics, and the American Economic Review. We specifically focus on the “sizeless stare” and the negligence of economic significance. Our initial results indicate that there is room of improvement in statistical practice. Empirical papers rarely consider the power of statistical tests or run simulations. The economic consequences of estimation results are often not adequately addressed. We discuss the implications of our findings for the publication process and teaching in Agricultural Economics. |
| Keywords: | Research Methods/ Statistical Methods |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:261998&r=hme |
| By: | - |
| Abstract: | Climate change is one of the greatest challenges of the twentyfirst century given its global causes and consequences and the scale of the coordinated efforts that will be needed to alleviate its negative impacts, adapt to new climate conditions and mitigate greenhouse gas emissions. The primary aim of this publication is to provide a concise, graphic presentation of the basic assumptions and statistical data relating to the economics of climate change in Latin America and the Caribbean. This presentation of a set of stylized facts is intended to serve as a tool for improving the design, instrumentation and evaluation of public policies for the twenty-first century that are focused on transforming the current style of development and transitioning into a more sustainable one. In addition to the preceding preface and this introduction, this study will explore nine theses regarding climate change in Latin America and the Caribbean along with seven of the challenges that it poses. |
| Keywords: | CAMBIO CLIMATICO, ASPECTOS ECONOMICOS, AGENDA 2030 PARA EL DESARROLLO SOSTENIBLE, OBJETIVOS DE DESARROLLO SOSTENIBLE, ASPECTOS SOCIALES, DESARROLLO ECONOMICO, MODELOS DE DESARROLLO, CONSUMO, AGRICULTURA, RECURSOS ENERGETICOS, INFRAESTRUCTURA FISICA, ZONAS URBANAS, RECURSOS HIDRICOS, BOSQUES, DIVERSIDAD BIOLOGICA, COSTAS, INDICADORES AMBIENTALES, GAS DE EFECTO INVERNADERO, INDICADORES ECONOMICOS, INDICADORES DEL DESARROLLO, CLIMATE CHANGE, ECONOMIC ASPECTS, 2030 AGENDA FOR SUSTAINABLE DEVELOPMENT, SUSTAINABLE DEVELOPMENT GOALS, SOCIAL ASPECTS, ECONOMIC DEVELOPMENT, DEVELOPMENT MODELS, CONSUMPTION, AGRICULTURE, ENERGY RESOURCES, PHYSICAL INFRASTRUCTURE, URBAN AREAS, WATER RESOURCES, FORESTS, BIOLOGICAL DIVERSITY, COASTS, ENVIRONMENTAL INDICATORS, GREENHOUSE GASES, ECONOMIC INDICATORS, DEVELOPMENT INDICATORS |
| Date: | 2018–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:43889&r=hme |
| By: | De Stefano, Valerio. |
| Abstract: | This paper aims at filling some gaps in the mainstream debate on automation, the introduction of new technologies at the workplace and the future of work. This debate has concentrated, so far, on how many jobs will be lost as a consequence of technological innovation. This paper examines instead issues related to the quality of jobs in future labour markets. It addresses the detrimental effects on workers of awarding legal capacity and rights and obligation to robots. It examines the implications of practices such as People Analytics and the use of big data and artificial intelligence to manage the workforce. It stresses on an oft-neglected feature of the contract of employment, namely the fact that it vests the employer with authority and managerial prerogatives over workers. It points out that a vital function of labour law is to limit these authority and prerogatives to protect the human dignity of workers. In light of this, it argues that even if a Universal Basic Income were introduced, the existence of managerial prerogatives would still warrant the existence of labour regulation since this regulation is about much more than protecting workers’ income. It then highlights the benefits of human- rights based approaches to labour regulation to protect workers’ privacy against invasive electronic monitoring. It concludes by highlighting the crucial role of collective regulation and social partners in governing automation and the impact of technology at the workplace. It stresses that collective dismissal regulation and the involvement of workers’ representatives in managing and preventing job losses is crucial and that collective actors should actively participate in the governance of technology-enhanced management systems, to ensure a vital “human- in-command” approach. |
| Keywords: | 1, 2, 3 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ilo:ilowps:994998792302676&r=hme |
| By: | Niedermayr, Andreas; Kantelhardt, Jochen |
| Abstract: | The aim of this study is to assess, whether estimation of the same innovation-adoption model at farm- and municipality-level results in an ecological fallacy, meaning that based on aggregated data, one would make inverse inferences about the driving forces influencing the adoption decision at the farm level. The adoption of an emerging alternative crop in Austria, the Styrian Oil Pumpkin, serves as an applied example. Our findings indicate the presence of an ecological fallacy. We therefore propose further research, which could consist of Monte Carlo simulations in order to analyse sensitivity of results with respect to the degree of aggregation. |
| Keywords: | Production Economics, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:262172&r=hme |
| By: | Bayer, Christian; Luetticke, Ralph |
| Abstract: | This paper describes a method for solving heterogeneous agent models with aggregate risk and many idiosyncratic states formulated in discrete time. It extends the method proposed by Reiter (2009) and complements recent work by Ahn et al. (2017) on how to solve such models in continuous time. We suggest first solving for the stationary equilibrium of the model without aggregate risk. We then write the functionals that describe the recursive equilibrium as sparse expansions around their stationary equilibrium counterparts. Finally we use the perturbation method of Schmitt-Grohé and Uribe (2004) to approximate the aggregate dynamics of the model. |
| Keywords: | Heterogeneous Agent Models; incomplete markets; linearization; Numerical Methods |
| JEL: | C63 E32 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13071&r=hme |
| By: | Karagiannis, Giannis; Kellermann, Magnus; Pröll, Simon; Salhofer, Klaus |
| Abstract: | In this paper we provide a method to separate the markup from product differentiation from other sources of market power, i.e. collusive behavior or market intransparency, based on the estimation of a single reduced form equation. We apply this method to a sample of 118 German breweries, since beer is a differentiated product and at the same time the sector has repeatedly been subject to collusive behavior. Our empirical results show that the “general” markup goes beyond the markup from product differentiation, but the latter accounts for most of the deviation of prices from marginal costs. Moreover, typically for a market with monopolistic competition, we observe average costs above marginal costs and, hence, a high markup does not necessarily translate into a high a profit margin. |
| Keywords: | Agribusiness, Industrial Organization, Production Economics |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi17:262148&r=hme |