The Experts below are selected from a list of 249 Experts worldwide ranked by ideXlab platform
Giuseppe Medda - One of the best experts on this subject based on the ideXlab platform.
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government spending and growth in a Neoclassical Model
Mathematics and Financial Economics, 2011Co-Authors: Oliviero Antonio Carboni, Giuseppe MeddaAbstract:This paper develops a non-monotonic theoretical relationship between public spending and economic growth in a Neoclassical framework. The Model identifies the size of government and the composition of government spending which maximize the rate of growth and the long run level of per capita income. Transitional dynamics to the steady state can be rather long. This reinforces the need for short-medium term analysis such as in this work. Given the size of the government, different allocations of public resources lead to different growth rates in the transition dynamics, depending on their elasticity. We argue that neglecting the hypothesis of non-monotonicity and the different impact different kinds of public spending have on economic performance results in Models which suffer from mis-specification. Traditional linear regression analysis may thus be biased.
Harold Demsetz - One of the best experts on this subject based on the ideXlab platform.
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r h coase and the Neoclassical Model of the economic system
The Journal of Law and Economics, 2011Co-Authors: Harold DemsetzAbstract:AbstractR. H. Coase makes two claims in his most important articles: (1) a positive cost of using the price system is needed to explain the existence and importance of firms, and, therefore, Neoclassical theory, which treats the price system as free to all, offers no explanation for the existence of firms, and (2) Neoclassical theory’s important deduction—that a private ownership, competitive economy allocates resources efficiently—is valid only if there is no cost to the provision and use of a price system. I reject both claims in this article and go on to argue that the assumptions that underlie Neoclassical theory’s perfect competition Model are appropriate to the purpose for which it is intended; namely, to understand resource allocation in a private, decentralized economic system. The assumptions that underlie Coase’s reasoning serve a different purpose—to understand organization within firms.
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The Problem of Social Cost: What Problem? A Critique of the Reasoning of A.C. Pigou and R.H. Coase
Review of Law & Economics, 2011Co-Authors: Harold DemsetzAbstract:This essay discusses and refutes allegations by A.C. Pigou and R.H. Coase that a competitive, private-ownership economic system that conforms to the Neoclassical Model fails to allocate resources efficiently. The essay then suggests a source of inefficiency that differs from and is much more limited in application than are those offered by Pigou and Coase; and the suggested source, moreover, is compatible with the Neoclassical Model.
John Marangos - One of the best experts on this subject based on the ideXlab platform.
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a political economy approach to the Neoclassical Model of transition
The American Journal of Economics and Sociology, 2002Co-Authors: John MarangosAbstract:The Neoclassical Model of transition from a centrally-administered socialist economic system to a market-based economic system was implemented in Russia and Eastern Europe. The Neoclassical process took the form of either shock therapy or gradualism. However, each approach actually involved a combination of shock therapy and gradualist policies, making the distinction between the two approaches unfounded. In addition, both approaches suffered by the innate inadequacies of Neoclassical economic analysis as being politically/institutionally naked. Both shock therapy supporters and gradualist Neoclassical economists did not provide a specific process of institutional development, favouring a gradual market-driven institutional outcome. With regard to the political structure, democracy was inconsistent with shock therapy, while active state intervention during transition was inconsistent with the ultimate goal of the gradualist Neoclassical economists of competitive capitalism. Copyright 2002 The American Journal of Economics and Sociology.
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A Political Economy Approach to the Neoclassical Model of Transition
American Journal of Economics and Sociology, 2002Co-Authors: John MarangosAbstract:I Introduction THE DOMINANCE OF Neoclassical ECONOMICS in the economic literature and of economic policies in market economies was the only decisive factor in determining the transition strategy of Russia and Eastern Europe. The Neoclassical Model of transition from a centrally-administered socialist economy to a capitalist market economy provided a set of liberalisation, stabilisation, and privatisation policies based on the Neoclassical body of economic analysis. The Neoclassical Model of transition was also adopted as the only solution to the transition problem by the international financial institutions--International Monetary Fund (IMF) and the World Bank--that provided financial aid upon the implementation of policies recommended by the Neoclassical Model. Consequently, the debate on transition had nothing to do with the goal, method, or ideology underpinning the transition process. These elements had already been decided and imposed upon transition economies. The goal had to be competitive capitalism, the methodology Neoclassical economics, and the ideological foundation of the reform had to be self-interest. Nor were the initial conditions of each country a concern. As a result, the debate on transition was restricted to the speed of the reforms. The only concern was whether transition economies should immediately liberalise, stabilise, and privatise, the shock therapy approach, or implement the Neoclassical policies at a slow pace, the gradualist approach. The aim of this paper is to demonstrate that the debate between shock therapy supporters and the gradualist Neoclassical economists (1) was immaterial. Both transition approaches adopted a combination of shock therapy and gradualist strategies. A careful investigation of the reforms recommended and implemented with regard to price liberalisation and stabilisation, privatisation, monetary and fiscal policies, and international trade policies reveals contradictions and inconsistencies in each approach to the point that the distinction is, in fact, invalid. Meanwhile, it is important to recognise that the transition process also depended on developments in the institutional and political structure. Incorporating the institutional and political structure into the transition analysis, which is consistent with a political economy approach, further highlights the contradictions of shock therapy and gradualism, reinforcing the inadequacies of Neoclassical economic analysis as being politically/institutionally naked. II Economic Reforms in Transition Economies THE SHOCK THERAPY Model derived its name from Poland's stabilisation and liberalisation program, initiated on January 1, 1990. The countries that followed this approach are Czechoslovakia (starting on January 1, 1991), Bulgaria (February 1, 1991), Russia (February 2, 1992), Albania (July 1992), Estonia (September 1992), and Latvia (June 5, 1993). Jeffrey Sachs was an advisor to the Polish government and both he and Anders Aslund advised the Russian government and guided its shock therapy reform process in 1992 to 1993 (Schlack 1996:617). Aslund was, in fact, an economic advisor to the Russian government from November 1991 to January 1994 (Aslund 1995:xi). Sachs and Aslund "shared the belief that the economy tin Russia] was in such a terrible mess that a radical, comprehensive, liberal program would be needed to introduce any kind of rational order" (ibid., p.16). The shock therapy Model highlights the interdependent, mutually supportive, and interactive character of economic relationships, implying that reforms should be introduced simultaneously. Fragmented changes are ineffective. "The idea that there is choice between doing one radical measure or another is simply wrong. There is no trade-off but, on the contrary, complementarity" (Aslund 1997b:187). Thus macroeconomic and microeconomic reforms must be concurrent (Sachs 1990:21). This was why the reform program needed to be sweeping and expedient. …
Yi Wen - One of the best experts on this subject based on the ideXlab platform.
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A search-based Neoclassical Model of capital reallocation
European Economic Review, 2020Co-Authors: Feng Dong, Pengfei Wang, Yi WenAbstract:Abstract The purchase of used capital accounts for at least 25% of firms’ total investment and more importantly, cross-firm reallocation of used capital exhibits intriguing business-cycle properties, such as (i) the quantity of capital reallocated is procyclical; (ii) the prices of used capital are procyclical and more so than those of new capital; (iii) the benefits to capital reallocation—measured by the dispersion of firms’ TFP—is countercyclical; and (iv) the dispersion of firms’ gross investment rates is procyclical despite the fact that the dispersion of firms’ Tobin q is countercyclical. This set of stylized facts do not seem to be mutually consistent with each other; e.g., the third stylized fact appears contradicting the first stylized fact since the quantity of capital reallocation is expected to be larger when the benefits to capital reallocations are greater. We build a search-based Neoclassical Model with variable capacity utilization to explain these seemingly “contradictory” facts. We show that search frictions in the capital markets are essential for our empirical success but not sufficient—the right type of aggregate shocks (i.e., shocks to the matching efficiency instead of aggregate TFP) are also important for simultaneously accounting for all the stylized facts, especially regarding the dispersion of firm-level TFP and the dispersion of firms’ investment rate.
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A Search-Based Neoclassical Model of Capital Reallocation
2018Co-Authors: Feng Dong, Pengfei Wang, Yi WenAbstract:As a form of investment, the importance of capital reallocation between firms has been increasing over time, with the purchase of used capital accounting for 25% to 40% of firms total investment nowadays. Cross- firm reallocation of used capital also exhibits intriguing business-cycle properties, such as (i) the illiquidity of used capital is countercyclical (or the quantity of used capital reallocation across rms is procyclical), (ii) the prices of used capital are procyclical and more so than those of new capital goods, and (iii) the dispersion of firms' TFP or MPK (or the bene t of capital reallocation) is countercyclical. We build a search-based Neoclassical Model to qualitatively and quantitatively explain these stylized facts. We show that search frictions in the capital market are essential for our empirical success but not sufficient---fi nancial frictions and endogenous movements in the distribution of rm-level TFP (or MPK) and interactions between used-capital investment and new investment are also required to simultaneously explain these stylized facts, especially that prices of used capital are more volatile than that of new investment and the dispersion of firm TFP is countercyclical.
William Coleman - One of the best experts on this subject based on the ideXlab platform.
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gauging economic performance under changing terms of trade real gross domestic income or real gross domestic product
Economic Papers: A journal of applied economics and policy, 2008Co-Authors: William ColemanAbstract:The paper presents a simple theoretical case for the superiority of the notion of Real Gross Domestic Income to Gross Domestic Product. It is shown that, in a multi-period version of the familiar Neoclassical Model of a small, open economy, a temporary improvement in its terms of trade will increase welfare and RGDI, and produce a trade surplus in current prices; but will decrease real GDP, on account of it creating a trade deficit at constant prices.
