Time-consistent decisions and rational expectation equilibrium existence in DSGE models

Under some initial conditions, it is shown that time consistency requirements prevent rational expectation equilibrium (REE) existence for dynamic stochastic general equilibrium models induced by consumer heterogeneity, in contrast to static models. However, one can consider REE-prohibiting initial conditions as limits of other initial conditions. The REE existence issue then is overcome by using a limit of economies. This shows that significant care must be taken of when dealing with rational expectation equilibria

Inequality, Predation and Welfare

This paper studies the relation between inequality and welfare in a general- equilibrium model in which people can choose to be either producers or preda- tors. We assume some people (the privileged) are well endowed with human capital and other people (the unprivileged) are poorly endowed with human capital. We analyze how the choice of the privileged between deterring and tolerating predation by the unprivileged depends on the interpersonal distri- bution of human capital. We find that, if the number of unprivileged people is large, but a privileged person doesn't have too much human capital relative to an unprivileged person, then the privileged allocate enough time and effort to guarding against predation to deter the unprivileged from being predators. Otherwise, the privileged tolerate predation by the unprivileged. A distribu- tion of human capital that is more egalitarian in that the number of people who are unprivileged is smaller can result in the privileged choosing to tolerate rather than to deter predation by the unprivileged. Next, we partition the feasible distributions of human capital into sets of Pareto efficient and inefficient distributions. Interestingly, we find that if the average endowment of human capital is large, then the fully egalitarian distribution is not Pareto efficient. Instead, Pareto efficiency implies an unegalitarian distribution of human capital where each unprivileged person has only the endowment of human capital he had at birth. Also, this unegalitarian distribution satisfies the Rawlsian criterion of maximizing the consumption of the unprivileged. With this unegalitarian distribution the privileged tolerate predation by the unprivileged, which results in maximum consumption for all.

Rise of Social Media Influencers as a New Marketing Channel: Focusing on the Roles of Psychological Well-Being and Perceived Social Responsibility among Consumers

This empirical research investigated the structural relationships between social media influencer attributes, perceived friendship, psychological well-being, loyalty, and perceived social responsibility of influencers, focusing on the perspective of social media users. More specifically, this study conceptually identified social media influencer attributes such as language similarity, interest similarity, interaction frequency, and self-disclosure and examined the respective effects of each dimension on perceived friendship and psychological well-being, consequently resulting in loyalty toward social media influencers. The authors collected and analyzed data from 388 social media users in the United States via Amazon’s Mechanical Turk with multivariate analyses to test the hypothesized associations among the variables in this study. The findings indicated that perceived friendship was significantly influenced by language similarity, interest similarity, and self-disclosure, but did not have a significant impact on psychological well-being. Additionally, perceived friendship significantly affected psychological well-being and loyalty, and psychological well-being significantly influenced loyalty. Lastly, social media influencers’ social responsibility moderated the path from psychological well-being to loyalty. Based on these findings, this study proposes theoretical and managerial implications for the social media influencer marketing context

The Impact of Personal Values and Attitudes on Responsible Behavior toward the Environment

Prior research on nature-based tourism has examined determinants of tourists’ environmentally responsible behavior from a personal value perspective. However, a nature-based destination needs both the economic benefits from tourists’ spending and the environmental benefits from tourists’ environmentally responsible behavior. Thus, based on the value-belief-norm and trust transfer theories, this study integrated altruistic value and attitudes toward a nature-based destination’s eco-travel and the destination to predict destination loyalty and positive word-of-mouth about the eco-travel as well as environmentally responsible behavior among domestic tourists. This study collected and analyzed data from 289 domestic tourists visiting Jeju Island, South Korea. The results of the structural equation modeling indicated that altruistic value significantly influenced only attitude toward eco-travel, which positively affected attitude toward the destination, destination loyalty, environmentally responsible behavior, and positive word-of-mouth about the eco-travel. Attitude toward the destination significantly influenced destination loyalty. Based on these results, this study provided several theoretical and managerial implications for a sustainable nature-based destination

Extended Ricardian Equivalence Theorem for Helicopter Money

This paper develops the Extended Ricardian Equivalence Theorem for helicopter money. It is shown that helicopter money, or money printing, to finance fiscal spending is inconsistent with existence of an equilibrium under ordinary assumptions used to derive the Ricardian Equivalence theorem. By relaxing some equality constraints into inequality constraints or by an open economy assumption, one may be able to save helicopter money from not being a part of an equilibrium

Extended Ricardian Equivalence Theorem for Helicopter Money

This paper develops the Extended Ricardian Equivalence Theorem for helicopter money. It is shown that helicopter money, or money printing, to finance fiscal spending is inconsistent with existence of an equilibrium under ordinary assumptions used to derive the Ricardian Equivalence theorem. By relaxing some equality constraints into inequality constraints or by an open economy assumption, one may be able to save helicopter money from not being a part of an equilibrium