Lived religion in a plural society: a resource or liability

Recently there is a renewed academic interest in religion bringing it back on the global political agenda. Religion in the post modern global order is fast emerging as a new organizing principle in the face of multi-polarity, trans-nationality and sweeping pluralisation of peoples. Contrary to the secularist self believe, the modern has failed to take over the tradition including religion. Rather a logical opposite seems to be happening, questioning the very presumptions of the modernity project. The present paper is a narrative on this creative tension in the religious modern and post modern. The paper is crafted into four sections. First section seeks to pin down the genesis of “religious” in the search for social order and consciousness beyond the material world. Second section deals with the unfolding of enlightenment project and its manifest consequence with the birth of secularism master theory. Third section delves deep into the immediate Indian religious lived experiences under foreign rule up to the sweeping spell of globalisation. Fourth and last part of the essay makes a case for universality of a multicultural world and religious secularism

mic Efficiency and Pareto Optimality in a Stochastic OLG Model with Production and Social Security

We analyze the interaction between risk sharing and capital accumulation in a stochastic OLG model with production. We give a complete characterization of interim Pareto optimality. Our characterization also subsumes equilibria with a PAYG social security system. In a competitive equilibrium interim Pareto optimality is equivalent to intergenerational exchange efficiency, which in turn implies dynamic efficiency. Furthermore, dynamic efficiency does not rule out a Pareto-improving role for a social security system. Social security can provide insurance against macroeconomic risk, namely aggregate productivity risk in the second period of life (old age) through dynamic risk sharing. We briefly relate our results to models without uncertainty where the notions of exchange efficiency, dynamic efficiency and interim Pareto optimality are all equivalent in a competitive equilibrium.Stochastic OLG Model, Dynamic Efficiency, Interim Pareto Optimality, Social Security, Risk Sharing

An adverse selection model of optimal unemployment insurance

We derive the shape of optimal unemployment insurance (UI) contracts when agents can exert search effort but face different search costs and have private information about their type. We derive a recursive solution of our dynamic adverse selection problem with repeated moral hazard. Conditions under which the UI agency should always offer separating contracts are identified. We show that the good searcher receives an information rent and that the bad searcher receives the minimal entitlement. From a methodological point of view, we achieve a precise characterization of the sets of jointly feasible entitlements. This allows us to map our analytical results one-toone to a numerical algorithm. According to our results the contract for the good searcher has a decreasing benefit profile, as the one he would be offered in a pure moral hazard environment. In contrast, the contract of the bad searcher is distorted by an adverse selection effect, so that it tends to have an upward-sloping benefit profile. We provide a comparative static analysis of changes in various parameters of our model. --Unemployment Insurance,Adverse Selection,Moral Hazard

Welfare Analysis in a Schumpeterian Growth Model with Capital

In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal solution. First, a monopoly distortion effect generates too little capital accumulation in the private solution because households' gross return per unit of capital will be lower than in the social optimum due to monopoly power. Second, a cost-benefit gap effect leads to excessive research in the private solution because the planner is interested in the average technology whereas the private researcher is interested in the leading-edge technology. Third, we decompose the well-known intertemporal spillover effect into three subeffects and clarify why the planner does not consider other factors than the interest rate to discount gains from innovation.Endogenous Growth Model

Langzeitarbeitslosigkeit in Deutschland: Fakten, Ursachen und Bekämpfung

Dieser Diskussionsbeitrag beleuchtet das Thema Langzeitarbeitslosigkeit aus der Perspektive neuerer wissenschaftlicher Forschung. Es wird einerseits ein Einblick in neuere empirische Fakten und Ergebnisse aus der Arbeitsmarktliteratur mit Fokus auf Deutschland gegeben. Andererseits werden Argumentationsmuster zum Thema aus der neueren makroökonomischen Literatur vorgestellt. Schließlich werden potentielle Maßnahmen und Handlungsempfehlungen gegen Langzeitarbeitslosigkeit im Lichte der Literatur bewertet. Im Bereich der Reformvorschläge existiert wenig Literatur, die mit quantitativen Empfehlungen zur Problemlösung beitragen kann. Viele der Vorschläge können als Denkanstöße interpretiert werden.This paper deals with long-term unemployment from the perspective of recent contributions to the topic. We present recent empirical facts and results from the labor economics literature with a focus on Germany as well as new arguments from the macro literature. We also evaluate potential measures against long-term unemployment in the light of the recent literature. We conclude that most of the literature does not offer reliable quantitative policy conclusions

The Zilcha criteria for dynamic inefficiency reconsidered

We reconsider necessary and sufficient conditions for dynamic inefficiency given in Zilcha (J Econ Theory 52:364-379, 1990, J Econ Theory 55:1-16, 1991) and a critique by Rangazas and Russell (2005). First, we show that the characterization given in Zilcha (1990) for nonstationary economies is correct and correct Zilcha's proof. Second, using this insight, we complement Rangazas and Russell's (Econ Theory 26:701-716, 2005) discussion of the counterexamples to Zilcha (J Econ Theory 55:1-16, 1991). Third, we discuss consequences of our results for applied tests of (in-)efficiency based on the Zilcha criteri

Efficiency Properties of Labor Taxation in a Spatial Model of Restricted Labor Mobility

We examine the efficiency properties of labor taxation. A spatial model of an economy is introduced whose key feature is a new approach to restricted labor mobility. We characterize the efficient allocation of labor and properties of a decentralized equilibrium. An efficient allocation of labor can be compatible with marginal productivity differentials stemming from binding mobility restrictions. We investigate two scenarios of labor taxation (firm-specific taxes and countryspecific taxes) and in both setups we give a complete characterization of the cases for which there is scope for redistribution without affecting effciency. Finally, we discuss the applicability of our model in the context of the place of employment and place of residence principle of taxation

Fostering Within-Family Human Capital Investment: An Intragenerational Insurance Perspective of Social Security

We develop a general equilibrium stochastic OLG model with heterogenous households. Households differ with respect to their productivity. Productivity depends stochastically on parents' unobservable investment in their child's human capital and an aggregate productivity shock. We introduce a PAYG social security system that conditions benefits on the aggregate wage sum and on the wage of one's child. We analyze the effects of such a social security system on the endogenous distribution of human capital and compare it to real world systems, which typically do not condition benefits on the wages of one's children. We decompose the effects of social security on the investment in human capital into an incentive effect, an insurance effect, a redistributive effect and a general equilibrium effect. Furthermore, we discuss the effects of social security on the long run distribution of human capital. Our approach suggests a novel role for a well-designed social security system: it can foster human capital accumulation and act as intragenerational insurance against human capital risk

Government Debt as Insurance against Macroeconomic Risk

Is there a role for debt beyond curing overaccumulation of capital? Does dynamic efficiency and the infeasibility of debt Ponzi schemes eliminate any Pareto-improving role for a government in a competitive economy with complete markets? Is there an optimal maturity structure of public debt? Using a stochastic Diamond OLG model, we tackle these questions. We show that government debt can Pareto-improve upon market allocations through a mechanism that resembles a Ponzi scheme. But instead of rolling over safe debt, we can interpret our scheme as one that rolls over an insurance contract generation for generation. This kind of dynamic risk-sharing can provide insurance against macroeconomic risk. Using the widespread welfare concept of interim Pareto optimality, we ensure that all generations voluntarily participate in our insurance scheme. Yet, the scheme cannot be replicated on capital markets. Exploiting information from the term structure of interest rates, we derive testable conditions both for dynamic efficiency and for interim Pareto optimality in terms of interest rates. We provide evidence that real world economies, while being dynamically efficient, are likely not to be interim Pareto optimal. We conclude that there may be a welfareimproving role for a well-designed maturity structure of debt