nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2012‒09‒03
three papers chosen by
Karl Petrick
University of the West Indies

  1. Veblen effect, search for status goods, and negative utility of conspicuous leisure. By Malakhov, Sergey
  2. Optimal Learning on Climate Change: Why Climate Skeptics should reduce Emissions By Sweder van Wijnbergen; Tim Willems
  3. Regional Monetary Cooperation in Latin America By Ocampo, José Antonio; Titelman, Daniel

  1. By: Malakhov, Sergey
    Abstract: When expected savings on purchases are greater than the wage rate, the optimal search results in the negative marginal utility of leisure. The search transforms the classical backward bending effect and the leisure becomes complementary to the search. Consumers compensate “bad” leisure by status goods of exceptional quality on markets with high price dispersion. Status consumption complements “bad” conspicuous leisure and produces the Veblen effect as well as the “gardening aboard the boat” effect.
    Keywords: Veblen effect, search, status goods, negative utility, conspicuous leisure
    JEL: D11 D83
    Date: 2012–08–20
  2. By: Sweder van Wijnbergen (University of Amsterdam); Tim Willems (Oxford University)
    Abstract: Climate skeptics argue that the possibility that global warming is exogenous implies that we should not take additional action towards reducing greenhouse gas emissions until we know more. However this paper shows that even climate skeptics have an incentive to reduce emissions: such a change of direction facilitates their learning process on the causes of global warming. Since the optimal policy action depends on these causes, they are valuable to know. Although an increase in emissions would also ease learning, that option is shown to be inferior because emitting greenhouse gases is irreversible. Consequently the policy implications of the different positions in the global warming debate turn out to coincide - thereby diminishing the relevance of this debate from a policy perspective. Uncertainty is no reason for inaction.
    Keywords: climate policy; global warming; climate skepticism; active learning; irreversibilities
    JEL: D83 Q54 Q58
    Date: 2012–08–20
  3. By: Ocampo, José Antonio (Asian Development Bank Institute); Titelman, Daniel (Asian Development Bank Institute)
    Abstract: Latin American has the longest history of regional integration efforts in the developing world. This paper analyzes the experience of regional monetary cooperation in Latin America over the past three decades. This experience has been overall successful but also uneven, both in terms of country coverage and services provided. Although strictly not a form of monetary cooperation, development financing does play a useful complementary role by proving counter-cyclical or at least stable financing during crises, when private financing for developing countries dries up.
    Keywords: regional monetary cooperation; latin america; regional integration; development financing
    JEL: O23 O54
    Date: 2012–08–13

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