Underemployment and capital irreversivility in a unionized overlaping generations economy

In a unionized OLG model, it is shown that steady-state underutilization of labour and equipment can be due to the combination of the two following elements: (i) Irreversibility of capital, technology and skill decisions, (ii) Firm specific shocks on productivity. The presence of unions is neither sufficient nor necessary for having unemployment. The result of Devereux and Lockwood (1991) that union power affect positively the capital stock in general equilibrium does not always hold under capital irreversibility

Irreversibility, uncertainty and underemployment equilibria

In a competitive overlapping generation model, underutilization of labor and equipment can be due to the combination of irreversibility of human capital, physical capital and technology with idiosyncratic productivity shocks. Irreversibilities and uncertainty generate an inefficient allocation of resources among sectors, which takes the form of underemployment and underutilization of capacities at the aggregate level and affects the equilibrium path of capital. We provide examples in which this missallocation, called structural "mismatch," can be responsible, a.o., for an "inescapable poverty trap," or for periodic orbits generating endogenous fluctuations in underemployment

The Q theory of investment under unit root tests

We test a q investment model for Belgium using a multivariate cointegration approach. The introduccion of the degree of capacity utilization duc, in addition to investment and average q, is necessary to determine the cointegration space. This support the idea that marginal q differs from average q by a factor which is a function of duc, as suggested by Licandro(1992)

Generation of planar tensegrity structures through cellular multiplication

Tensegrity structures are frameworks in a stable self-equilibrated prestress state that have been applied in various fields in science and engineering. Research into tensegrity structures has resulted in reliable techniques for their form finding and analysis. However, most techniques address topology and form separately. This paper presents a bio-inspired approach for the combined topology identification and form finding of planar tensegrity structures. Tensegrity structures are generated using tensegrity cells (elementary stable self-stressed units that have been proven to compose any tensegrity structure) according to two multiplication mechanisms: cellular adhesion and fusion. Changes in the dimension of the self-stress space of the structure are found to depend on the number of adhesion and fusion steps conducted as well as on the interaction among the cells composing the system. A methodology for defining a basis of the self-stress space is also provided. Through the definition of the equilibrium shape, the number of nodes and members as well as the number of self-stress states, the cellular multiplication method can integrate design considerations, providing great flexibility and control over the tensegrity structure designed and opening the door to the development of a whole new realm of planar tensegrity systems with controllable characteristics.Comment: 29 pages, 19 figures, to appear at Applied Mathematical Modelin

‘The child is father of the man’: implications for the demographic transition

We propose a new theory of the demographic transition based on the evidence that body development during childhood is an important predictor of adult life expectancy. Fertility, childhood development, longevity, education and income growth all result from individual decisions. Parents face a trade-off between the number of children they have and the spending they can afford on each of them in childhood. These childhood development spending will determine children longevity when adults. It is in this sense that we refer to Wordsworth's aphorism that "The Child is Father of the Man". Parents face a second trade-offin allocating their time between increasing their own human capital and rearing children. The model displays different regimes. In a Malthusian regime with no education fertility increases with adult life expectancy. In the modern growth regime, life expectancy and fertility move in opposite directions. The dynamics display the key features of the demographic transition, including the hump in both population growth and fertility, and replicate the observed rise in educational attainment, adult life expectancy and economic growth. Consistent with the empirical evidence, a distinctive implication of our theory is that improvements in childhood development precede the increase in education.life expectancy, height, human capital, fertility, mortality

Underemployment and capital irreversivility in a unionized overlaping generations economy.

In a unionized OLG model, it is shown that steady-state underutilization of labour and equipment can be due to the combination of the two following elements: (i) Irreversibility of capital, technology and skill decisions, (ii) Firm specific shocks on productivity. The presence of unions is neither sufficient nor necessary for having unemployment. The result of Devereux and Lockwood (1991) that union power affect positively the capital stock in general equilibrium does not always hold under capital irreversibility.Unemployment; Underutilization; Irreversibility; Investment; Union power;

Irreversibility, uncertainty and underemployment equilibria.

In a competitive overlapping generation model, underutilization of labor and equipment can be due to the combination of irreversibility of human capital, physical capital and technology with idiosyncratic productivity shocks. Irreversibilities and uncertainty generate an inefficient allocation of resources among sectors, which takes the form of underemployment and underutilization of capacities at the aggregate level and affects the equilibrium path of capital. We provide examples in which this missallocation, called structural "mismatch," can be responsible, a.o., for an "inescapable poverty trap," or for periodic orbits generating endogenous fluctuations in underemployment.Underemployment; Underutilization; Irreversibility; Poverty trap; Endogenous Fluctuations;

Vintage Capital

We highlight the salient characteristics and implications of the seminal contributions in the field of vintage capital growth theory (proposed entry for the new Palgrave dictionary of economics, 2nd edition)Obsolescence; embodiment; technology diffusion; vintage human capital

Vintage Capital

We highlight the salient characteristics and implications of the seminal contributions in the field of vintage capital growth theory (proposed entry for the New Palgrave Dictionary of Economics, 2nd edition).vintage capital, the embodied question, replacement echoes, technology diffusion, inequality, demographics

The Asymmetric Effects of Oil Shocks on an Oil-exporting Economy

We estimate the effects of unexpected changes in oil prices on output for the case of Venezuela, an oil-exporting economy. Following Hamilton (2003), Lee et al. (1995), and Mork (1989), we estimate measures of oil shocks and determine the effect of theseOil shocks, output fluctuations, nonlinear estimation