The Experts below are selected from a list of 285 Experts worldwide ranked by ideXlab platform
Wei-bin Zhang - One of the best experts on this subject based on the ideXlab platform.
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Wealth and income distribution among heterogeneous households in a neoclassical growth model with one capital and multiple consumer goods
Economic Studies journal, 2020Co-Authors: Wei-bin ZhangAbstract:This paper brings heterogeneous households and heterogeneous sectors in the traditional Solow-Uzawa neoclassical growth model. It is influenced by the neoclassical growth theory and the post-Keynesian theory of growth and distribution. The model deals with not only the economic structure, but also income and wealth distributions between heterogeneous households. We show the transitional paths of the variables and determine the economic equilibrium for a two-group and two-sector economy. We also conduct out comparative dynamic analysis with regard to human capital, Propensity to Save, and population size. We demonstrate, for instance, that rises in the skilled and unskilled groups’ the propensities to Save have the same impacts on the national and sectoral production levels, input factor distributions, rate of interest, wage rate, and national wealth; but the skilled (unskilled) group’s wealth and consumption level are reduced (increased) and the wealth and consumption gaps between the two groups are diminished (enlarged) as a long-term consequence of a rise in the unskilled (skilled) group’s Propensity to Save.
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A SYNTHESIS OF THE UZAWA-LUCAS MODEL WITH THE WALRASIAN-GENERAL-EQUILIBRIUM AND NEOCLASSICAL-GROWTH THEORIES
Ekonomski Anali, 2020Co-Authors: Wei-bin ZhangAbstract:This paper proposes a dynamic economic model of wealth accumulation and human capital accumulation with endogenous education. It is an extension of the Uzawa-Lucas model of a heterogeneous household economy with multiple ways of human capital accumulation. In addition to learning by education in the Uzawa-Lucas model (Uzawa, 1965; Lucas, 1988), we also consider Arrow’s ‘learning by producing’ (Arrow, 1962) and Zhang’s ‘learning by consuming’ (creative learning, Zhang, 2007) in the human capital accumulation equation. The economic system consists of one production sector and one education sector. Households differ in Propensity to Save, to obtain education, to consume, and in learning abilities. The model describes a dynamic interdependence between wealth accumulation, human capital accumulation, and division of labour with endogenous wealth and income distribution in perfect competition. We simulate the model to demonstrate the existence of equilibrium points and the motion of the dynamic system. We also demonstrate how changes in the Propensity to obtain education, the population, the Propensity to Save, and the education sector’s total productivity affect economic development.
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Tradable, Non-Tradable and Education Sectors in a Multi-Country Economic Growth Model with Endogenous Wealth and Human Capital
Economic Research Guardian, 2020Co-Authors: Wei-bin ZhangAbstract:This study deals with international economic interactions with capital accumulation, human capital accumulation, economic structure and international trade by integrating the Solow growth model, the Uzawa two-sector growth model, the Uzawa-Lucas two-sector growth model, and the Oniki–Uzawa trade model within a comprehensive framework. In addition to learning by education in the Uzawa-Lucas model, we also consider Arrow’s learning by producing, and Zhang’s learning by consuming (creative learning) in the human capital accumulation equation. The model is built for any number of national economies and each national economy consists of one tradable, one non-tradable and one education sector. National economies are different in propensities to Save, to obtain education and to consume, and in learning abilities. We show that the dynamics of the J-country world economy can be described by 2J differential equations. We simulate the model to demonstrate existence of equilibrium points and motion of the dynamic system. We also demonstrate how changes in the Propensity to obtain education, the population, the Propensity to Save, and the education sector’s total productivity affect global economic development.
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Business Cycles in a Three-sector Growth Model with Portfolio Equilibrium between Land, Gold and Capital
Margin: The Journal of Applied Economic Research, 2018Co-Authors: Wei-bin ZhangAbstract:This study generalises a growth model proposed by Zhang (2016) through allowing all the time-dependent variables to be time-dependent. Zhang’s model deals with dynamic interdependence between capital accumulation and environmental change, with portfolio equilibrium among land, gold and physical wealth in a multi-sector general equilibrium framework. The model explains the dynamics of prices, rents and distribution of land, gold, physical wealth and environmental change on the basis of micro-economic foundation. This article generalises the model to explain business cycles due to different exogenous shocks. We simulate the motion of the economy and conduct comparative dynamic analysis to demonstrate business cycles due to periodic oscillations in the Propensity to use gold, the Propensity to consume housing, the Propensity to consume industrial goods, the Propensity to consume agricultural goods, the Propensity to Save, and the tax rate on the consumption of industrial goods. JEL Classification: O41, D41, E32
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tourism trade and wealth accumulation with endogenous income and wealth distribution among countries
Ecoforum, 2015Co-Authors: Wei-bin ZhangAbstract:The purpose of this study is to study dynamic interactions among economic growth, structural change, international trade and tourist flows. It builds a multi-country growth model with endogenous wealth accumulation and tourism. The model is unique in that it introduces endogenous tourism within a general dynamic equilibrium framework. The model is built on microeconomic foundations. It not only integrates the three well-known Solow growth model, Oniki-Uzawa trade model, and the Uzawa two-sector model, but also introduces tourist flows between economies for any number of national economies. After building the model, we demonstrate that the motion of the J - country world economy can be described by J differential equations. We also simulate the global economy with three countries, showing that the world dynamics has a unique equilibrium. We carry out comparative dynamic analysis with regard to one country's total productivity factor, the Propensity to Save, the Propensity to tour other countries, and the population.
Mitsuyoshi Yanagihara - One of the best experts on this subject based on the ideXlab platform.
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The transfer paradox in a pay-as-you-go pension system
International Economics and Economic Policy, 2017Co-Authors: Kojun Hamada, Akihiko Kaneko, Mitsuyoshi YanagiharaAbstract:We examine how international transfers affect the welfare levels of a donor with a higher marginal Propensity to Save and a recipient with a lower marginal Propensity to Save when both countries adopt a pay-as-you-go (PAYG) pension system using a one-sector overlapping generations model. We demonstrate that in a dynamically efficient economy, except at the golden rule, when a per capita PAYG pension contribution of either a donor or a recipient increases marginally, the effect of the transfer on the donor’s welfare can be reduced, whereas whether the effect of the transfer on the recipient’s welfare is reduced is ambiguous. These results imply that the existence of a PAYG pension might hinder the effectiveness of the transfer on the donor’s welfare, and the adoption of a PAYG pension system is likely to cause a weak transfer paradox in which both a donor and a recipient immiserize. Our results also suggest that the introduction of a PAYG pension system, which is used as a domestic policy instrument for intergenerational income redistribution, reduces the donor’s incentive to make an international transfer to a recipient, which is a form of international income redistribution.
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The transfer paradox in a pay-as-you-go pension system
International Economics and Economic Policy, 2016Co-Authors: Kojun Hamada, Akihiko Kaneko, Mitsuyoshi YanagiharaAbstract:We examine how international transfer affects welfare levels of a donor with a higher marginal Propensity to Save and a recipient with a lower marginal Propensity to Save, when both countries adopt a pay-as-you-go (PAYG) pension system using a one-sector overlapping generations model. A PAYG pension scheme is found to lead to impairment of the donor and of the recipient as a result of the transfer under the dynamic efficiency condition. This is because the transfer increases the divergence in the rate of return between PAYG and private savings.
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Donor Altruism and the Transfer Paradox in an Overlapping Generations Model
Review of International Economics, 2014Co-Authors: Kojun Hamada, Mitsuyoshi YanagiharaAbstract:This paper examines the transfer problem between two countries when a donor exhibits altruistic utility toward a recipient in a one-sector overlapping generations model. We demonstrate that if the donor has a larger marginal Propensity to Save than the recipient, the donor's altruism never contributes to donor enrichment irrespective of the degree of the donor's altruism. Donor enrichment occurs only if the donor has a smaller marginal Propensity to Save and a sufficiently high level of altruism. These findings imply that the altruism of a donor toward a recipient does not necessarily explain the motivation to voluntarily provide a transfer.
Marcella Veronesi - One of the best experts on this subject based on the ideXlab platform.
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Teaching Children to Save: What is the Best Strategy for Lifetime Savings?
Journal of Economic Psychology, 2014Co-Authors: Alessandro Bucciol, Marcella VeronesiAbstract:We study the effect of alternative parental teaching strategies on the Propensity to Save and the amount Saved during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching to Save increases the likelihood that an adult will Save by 16%, and the saving amount by about 30%. The best strategy involves a combination of different methods (giving pocket money, controlling money usage, and giving advice about saving and budgeting). The effect of parental financial socialization is persistent with age, but decays at elder age for the Propensity to Save.
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Teaching Children to Save and Lifetime Savings: What is the Best Strategy?
SSRN Electronic Journal, 2013Co-Authors: Alessandro Bucciol, Marcella VeronesiAbstract:We study the effect of alternative parental teaching strategies on the Propensity to Save and the amount Saved during adulthood. Using a panel dataset from the Dutch DNB Household Survey we find that parental teaching to Save increases the likelihood that an adult will Save by 16%, and the saving amount by about 30%. The best strategy involves a combination of different methods (giving pocket money, controlling money usage, and giving advice about saving and budgeting). The effect of parental teaching is persistent with age, but decays at elder age for the Propensity to Save.
Luca Spataro - One of the best experts on this subject based on the ideXlab platform.
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Rate of Growth of Population and Aggregate Saving in the Basic Life-Cycle Model
Economia Politica, 2020Co-Authors: Carlo Casarosa, Luca SpataroAbstract:In this paper we explore the impact of the life-cycle dynamics of family composition on the aggregate Propensity to Save and on the relationship between the latter and the rate of growth of population, in the hypothesis of life-cycle behaviour. We depart from Modigliani-Brumberg's basic model by assuming that the household, rather than the individual, is the relevant economic unit. In this framework we point out that in an economy with a steadily growing population the aggregate Propensity to Save is a function of several demographic parameters and, in particular, of the timing of births (T) and of the number of children generated by each household (f). We then explore the impact of T and f on the co-movements of the rate of growth of population and of the aggregate Propensity to Save. We show that, when the change of the rate of growth of population is brought about by a change of the number of children generated by each household, the aggregate Propensity to Save and the rate of growth of population move in the same direction, as suggested by Modigliani-Brumberg, unless the timing of births is very low and the number of children generated by each household relatively high. On the contrary, when the rate of growth of population changes because the timing of birth changes, the aggregate Propensity to Save and the rate of growth of population move in opposite directions unless the number of children generated by each household is very close to two and therefore the rate of growth of population very close to zero.
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Propensione aggregata al risparmio, rapporto ricchezza-reddito e distribuzione della ricchezza nel modello del ciclo di vita "egualitario": il ruolo delle variabili demografiche
2020Co-Authors: Carlo Casarosa, Luca SpataroAbstract:In this paper we explore the impact of demographic variables on the aggregate Propensity to Save (PS), on the aggregate wealth income ratio (WIR) and on the distribution of wealth (WD), in the life cycle (LC) "egalitarian" model. We depart from Modigliani and Brumberg (1954) and Atkinson (1971) pioneering papers by assuming that the household, rather than the individual, is the relevant economic unit. More precisely, we allow parents to care about their children, such that consumption (and saving) of the household change when children are born and until the latter join the labor force and form a new household. Under this scenario we show that, in a stationary economy, the timing of births strongly affects both the WIR and the WD, while the dispersion, within each household, of such a timing affects the WD only. In a steadily growing economy due to population growth, the impact of the timing of births and of the number of children turns out to be significant for the PS, the WIR and the WD, in a much stronger manner than in the traditional LC model; moreover, we find that the aggregate Propensity to Save is a decreasing function of the population growth rate when the latter changes: i) due to the timing of births or ii) due to the number of children and provided that the age of parenthood is sufficiently low. The latter results are in clear contrast with one of the fundamental propositions of the traditional LC theory.
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Rate of Growth of Population, Saving and Wealth in the Basic Life-cycle Model when the Household is the Decision Unit
2007Co-Authors: Carlo Casarosa, Luca SpataroAbstract:In this paper we explore the impact of the life-cycle dynamics of family composition on the aggregate wealth-income ratio and on the aggregate Propensity to Save in the hypothesis of life-cycle behaviour. We depart from Modigliani-Brumberg’s basic model by assuming that the household, rather than the individual, is the relevant economic unit. In this framework we first explore the single household’s life-cycle paths of consumption, saving and wealth and point out the impact on such paths of the timing of births and of the rearing period of the children. We then show that both in a stationary economy and in economy with a steadily growing population the life-cycle dynamics of family composition affects strongly the aggregate wealth-income ratio and the distribution of wealth among the age-cohorts. Further and more importantly, we show that in an economy with a steadily growing population the aggregate Propensity to Save and the rate of growth of population move in opposite directions for a wide range of values of the timing of births and of the number of children per-household.
Fabio Freitas - One of the best experts on this subject based on the ideXlab platform.
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The Trouble with Harrod: The fundamental instability of the warranted rate in the light of the Sraffian Supermultiplier
Metroeconomica, 2018Co-Authors: Franklin Serrano, Fabio Freitas, Gustavo BheringAbstract:The paper argues that Harrodian instability is an instance of what Hicks in his book Capital and Growth (1965) called static instability, related to the direction (and not to the intensity) of the disequilibrium adjustment process. We show why such instability obtains in demand‐led growth models in which the ratio of capacity creating private investment to output ratio is given exogenously by the aggregate marginal Propensity to Save. We also show that Sraffian Supermultiplier model overcomes the Harrodian instability and that its demand‐led equilibrium is statically stable. It is explained that the latter results do not follow from the presence of autonomous non‐capacity creating expenditure component as such but from its presence within a model in which investment is driven by the capital stock adjustment principle (i.e., the flexible accelerator). Finally, we argue that, although being statically stable, the equilibrium growth path of the Sraffian Supermultiplier model can be dynamically stable or unstable depending on the intensity of the reaction of investment to demand. We then provide a discrete time sufficient condition for the dynamic stability of such equilibrium that implies that the marginal Propensity to invest remains lower than the marginal Propensity to Save during the adjustment process, a modified Keynesian stability condition.
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The Sraffian supermultiplier as an alternative closure for heterodox growth theory
European Journal of Economics and Economic Policies: Intervention, 2017Co-Authors: Franklin Serrano, Fabio FreitasAbstract:This paper aims to show that the Sraffian supermultiplier model provides an alternative closure for the heterodox analysis of economic growth. The new closure follows from the assumption of the existence of autonomous non-capacity-creating expenditures, which implies that the ratio of the average to the marginal Propensity to Save is an endogenous variable whose determination allows the marginal Propensity to invest to determine the saving ratio without the need for changes in income distribution. Provided it is also assumed that capitalist competition leads to gradual changes in the marginal Propensity to invest in order to adjust productive capacity to demand, the new closure (in contrast to the Cambridge and neo-Kaleckian closures) allows us to reconcile demand-led growth, exogenous distribution, and a tendency towards normal capacity utilization.
