Inequality, trust, and sustainability

Instrumental arguments linking inequality to sustainability often suppose a negative relationship between inequality and social cohesion, and empirical studies of inequality and social trust support the assumption. If true, then redistribution should increase levels of social cohesion and thereby ease the implementation of policies that require collective action to achieve shared benefits. However, an examination of the data suggests that at least part of the relationship may be explained by income level, rather than income distribution, suggesting that growth, rather than redistribution, may achieve the same goal. This paper tests for the possibility and suggests that income is indeed important in explaining differences in levels of social trust. However, the effect of income level is insufficient to explain all of the dependence on income inequality; both income level and income distribution are correlated with social trust. The analysis is done at the income decile level using individual response data from the World Values Survey. While the analysis is limited by the availability and reliability of the underlying data, the results suggest that neither redistribution nor growth alone is sufficient to raise a low-trust country to a position of medium or high trust. Rather, using the parameters estimated in this paper, a combination of growth with narrowing income distributions could, over a period of perhaps two decades, produce a significant change in levels of social trust.income inequality; social trust; social cohesion; composition effect; World Values Survey

Confronting the Kaya Identity with Investment and Capital Stocks

Scaling relations, such as the IPAT equation and the Kaya identity, are useful for quickly gauging the scale of economic, technological, and demographic changes required to reduce environmental impacts and pressures; in the case of the Kaya identity, the environmental pressure is greenhouse gas emissions. However, when considering large-scale economic transformation, as with a shift to a low-carbon economy, the IPAT and Kaya identities and their cousins fail to capture the legacy of existing capital, on the one hand, and the need for new investment, on the other. While detailed models can capture these factors, they do not allow for rapid exploration of widely different alternatives, which is the appeal of the IPAT and Kaya identities. In this paper we present an extended Kaya identity that includes investment and capital stocks. The identity we propose is a sum of terms, rather than a simple scaling relation. Nevertheless, it allows for quick analysis and rapid exploration of a variety of different possible paths toward a low-carbon economy.Comment: 7 figure

The \u3cem\u3emir-51\u3c/em\u3e Family of MicroRNAs Functions in Diverse Regulatory Pathways in \u3cem\u3eCaenorhbditis elegans\u3c/em\u3e

The mir-51 family of microRNAs (miRNAs) in C. elegans are part of the deeply conserved miR-99/100 family. While loss of all six family members (mir-51-56) in C. elegans results in embryonic lethality, loss of individual mir-51 family members results in a suppression of retarded developmental timing defects associated with the loss of alg-1. The mechanism of this suppression of developmental timing defects is unknown. To address this, we characterized the function of the mir-51 family in the developmental timing pathway. We performed genetic analysis and determined that mir-51 family members regulate the developmental timing pathway in the L2 stage upstream of hbl-1. Loss of the mir-51 family member, mir-52, suppressed retarded developmental timing defects associated with the loss of let-7 family members and lin-46. Enhancement of precocious defects was observed for mutations in lin-14, hbl-1, and mir-48(ve33), but not later acting developmental timing genes. Interestingly, mir-51 family members showed genetic interactions with additional miRNA-regulated pathways, which are regulated by the let-7 and mir-35 family miRNAs, lsy-6, miR-240/786, and miR-1. Loss of mir-52 likely does not suppress miRNA-regulated pathways through an increase in miRNA biogenesis or miRNA activity. We found no increase in the levels of four mature miRNAs, let-7, miR-58, miR-62 or miR-244, in mir-52 or mir-52/53/54/55/56 mutant worms. In addition, we observed no increase in the activity of ectopic lsy-6 in the repression of a downstream target in uterine cells in worms that lack mir-52. We propose that the mir-51 family functions broadly through the regulation of multiple targets, which have not yet been identified, in diverse regulatory pathways in C. elegans

Capital stranding cascades: The impact of decarbonisation on productive asset utilisation

This article develops a novel methodological framework to investigate the exposure of eco- nomic systems to the risk of physical capital stranding. Combining Input-Output (IO) and network theory, we define measures to identify both the sectors likely to trigger relevant capital stranding cascades and those most exposed to capital stranding risk. We show how, in a sample of ten European countries, mining is among the sectors with the highest external asset strand- ing multipliers. The sectors most affected by capital stranding triggered by decarbonisation include electricity and gas; coke and refined petroleum products; basic metals; and transporta- tion. From these sectors, stranding would frequently cascade down to chemicals; metal products; motor vehicles water and waste services; wholesale and retail trade; and public administration. Finally, we provide an estimate for the lower-bound amount of assets at risk of transition-related stranding, which is in the range of 0.6-8.2% of the overall productive capital stock for our sample of countries, mainly concentrated in the electricity and gas sector, manufacturing, and mining. These results confirm the systemic relevance of transition-related risks on European societies.Series: Ecological Economic Paper

Cost-share induced technological change and Kaldor’s stylized facts

This paper presents a theory of induced technological change in which firms pursue a random, local, and bounded search for productivity-enhancing innovations. Firms implement profitable innovations at fixed prices, which then spread through the economy. After diffusion, all firms adjust prices and wages. The model is consistent with a variety of price-setting behaviors, which determine equilibrium positions characterized by constant cost shares and productivity growth rates. Target-return pricing yields Harrod-neutral technological change with a fixed wage share as a stable equilibrium, consistent with Kaldor’s stylized facts, while allowing for deviations from equilibrium, as observed in the longer historical record

Inequality, trust, and sustainability

Instrumental arguments linking inequality to sustainability often suppose a negative relationship between inequality and social cohesion, and empirical studies of inequality and social trust support the assumption. If true, then redistribution should increase levels of social cohesion and thereby ease the implementation of policies that require collective action to achieve shared benefits. However, an examination of the data suggests that at least part of the relationship may be explained by income level, rather than income distribution, suggesting that growth, rather than redistribution, may achieve the same goal. This paper tests for the possibility and suggests that income is indeed important in explaining differences in levels of social trust. However, the effect of income level is insufficient to explain all of the dependence on income inequality; both income level and income distribution are correlated with social trust. The analysis is done at the income decile level using individual response data from the World Values Survey. While the analysis is limited by the availability and reliability of the underlying data, the results suggest that neither redistribution nor growth alone is sufficient to raise a low-trust country to a position of medium or high trust. Rather, using the parameters estimated in this paper, a combination of growth with narrowing income distributions could, over a period of perhaps two decades, produce a significant change in levels of social trust

A middle-manager model of wage and salary distribution within firms

Management structure affects income distribution within the firm. We construct a model in which the managerial wage bill is determined by the number of direct reports to each manager (the “span of control”) and the increase in pay between levels in the managerial hierarchy. The model explains, in a natural way, one of the best-documented observations in firm compensation: that CEO pay increases with the size of the firm. It also shows that rising span of control will normally lead to a decline in the ratio of the managerial wage bill to that of production workers. As span of control has been rising in recent decades, this appears to be inconsistent with the widely-documented rise in income inequality. The discrepancy is explained by the rapid expansion of equity-based compensation