Endogenous Cycles and Liquidity Risk

Using an overlapping generations model with liquidity risk, we show that equilibrium aggregate investment and asset prices are cyclical. In an economy with neither a beginning nor an ending date, a stationary equilibrium can be obtained. In a startable equilibrium however, economic activity is highly cyclical. The first generations and consecutive odd ones invest most of their wealth in new long lived technologies, while even generations flock to seasoned claims that are sold by liquidity challenged older cohorts. We find that this liquidity driven cyclicality is driven by the optimal length of the investment horizon, not by agent live spanBusiness Cycles, Overlapping Generations, Liquidity

How Participation Creates Citizens: Participatory Governance as Performative Practice

Participation is a prominent feature of many decision-making and planning processes. Among its proclaimed benefits is its potential to strengthen public support and involvement. However, participation is also known for having unintended consequences which lead to failures in meeting its objectives. This article takes a critical perspective on participation by discussing how participation may influence the ways in which citizens can become involved. Participation unavoidably involves (1) restrictions about who should be involved and about the space for negotiation, (2) assumptions about what the issue at stake is, and (3) expectations about what the outcome of participation should be and how the participants are expected to behave. This is illustrated by a case study about the Dutch nature area, the Drentsche Aa. The case study demonstrates how the participatory process that took place and the restrictions, assumptions, and expectations that were involved resulted in six forms of citizen involvement, both intended and unintended, which ranged between creativity, passivity, and entrenchment. Based on these findings, the article argues that participation does not merely serve as a neutral place in which citizens are represented, but instead creates different categories of citizens. Recognizing this means reconceiving participation as performative practice. Such a perspective goes beyond overly optimistic views of participation as a technique whose application can be perfected, as well as pessimistic views of participation as repression or domination. Instead, it appreciates both intended and unintended forms of citizen involvement as meaningful and legitimate, and recognizes citizenship as being constituted in interaction in the context of participatio