Corruption and production: a policy analysis.

� This paper analyzes the relation existing between corruption, monitoring and output in an economy. By solving a dynamic game we prove that equilibrium output is a non-linear upper-hemicontinuous function (MP function) of the monitoring level implemented by the State on corruption, presenting 3 different equilibrium scenarios. According to our model, we analyze the optimal strategy depending on the policy objective of the State and we prove that if the State is budget constrained the optimal policy can lead the economy to an equilibrium with widespread corruption and maximum production.Policy analysis,Equilibrium production,Corruption,Dynamic game

Exchange rate policy and income distribution in an open developing economy

In this work we are going to deal with the issue of the distribution of income in an open economy within a simplified macroeconomic model with constant prices. This type of model could apply to middle-income developing countries, which have succeeded in fighting inflation through a policy of high interest rates. It will be assumed that the implicit target of monetary policy now becomes the exchange rate and interest rates are set at a high level to lower the exchange rate (defined as the price of the foreign currency in terms of the domestic one). Even if this strategy may work it may produce negative effects on output growth and the distribution of income. The lowering of the exchange rate target would have the following effects on distribution. It would cause a reduction in the growth of output, it would lower the wage rate. Domestically-produced income distributed abroad should increase instead. The domestic interest rate would rise only for suitable small values of the parameter, which links imports to income. The effect on the profit share is indeed uncertain.Exchange rate target,Administrative incentive pricing,Income distribution

Chaos in credit–constrained emerging economies with Leontief technology

This work provides a framework to analyze the role of financial development as a source of endogenous instability in emerging economies subject to moral hazard problems. We study a piecewise linear dynamic model describing a small open economy with a tradable good produced by internationally mobile capital and a country specific production factor, using Leontief technology. We demonstrate that emerging markets could be endogenously unstable when large capital in–flows increase risk and exacerbate asymmetric information problems, according to empirical evidence. Using bifurcation and stability analysis we describe the properties of the system attractors, we assess the plausibility for complex dynamics and we find out that border collision bifurcations can emerge.border collision bifurcations,,complex dynamics,,emerging economies,,CEECs,,Endogenous instability,,moral hazard,,piecewise linear map.

Exchange rate policy and income distribution in an open developing economy

In this work we are going to deal with the issue of distribution of income in an open economy within a simplified macroeconomic model with constant prices.this type of model could apply to middle-income developing countries, which have succeeded in fighting inflation through a policy of high interest rates.It will be assumed that the implicit target of monetary policy now becomes the exchange rate and interest rates are set to a high level to lower the exchange rate. Even if this strategy may work it may produce negative effects on output growth and the distribution of income.The lowering of the exchange rate target would have the following effects on distribution.It would cause a reduction in the growth of output,it would lower the wage rate.Domestically-produced income distributed abroad should increase instead.The domestic interst rate would rise only for suitable small values of the parameter which links imports to income.The effect on the profit share is indeed uncertain.exchange rate policy balance of payments income distribution developing countries

Global attractor in Solow growth model with differential savings and endogenic labor force growth

In this paper we study the dynamics of a discrete triangular system T in capital per capita and population growth representing the neoclassical growth model with CES production function and differential savings, under the assumption that the labor force growth rate is endogenous and described by a generic iterative scheme having a unique positive globally stable equilibrium. The study herewith presented aims at confirming the existence of a compact global attractor for system T along the invariant line. Consequently asymptotic dynamics of growth models with constant population growth rate can be related to those with non-constant population growth if the steady state rate is globally stable. Furthermore we prove that the system exhibits cycles or even chaotic dynamics patterns if shareholders save more than workers, when the elasticity of substitution between production factors drops below one (so that capital income declines). The analytical results are supplemented by numerical simulations.chaotic dynamics,,Compact global attractor,,Developing Countries,endogenic population growth.

Global Attractors of Non-autonomous Difference Equations

The article is devoted to the study of global attractors of quasi-linear non-autonomous difference equations, in particular we give the conditions for the existence of a compact global attractor. The obtained results are applied to the study of a triangular economic growth model recently developed by Brianzoni S., Mammana C. and Michetti E.Global attractors,Solow growth model,CGE,quasi-linear non-autonomous,difference equations,Endogenous population growth

Income distribution in an open developing economy: do monetary and exchange rate policy matter?

In this work we are going to deal with the issue of the distribution of income in an open economy within a simplified macroeconomic model with constant prices. This type of model could apply to middle-income developing countries, which have succeeded in fighting inflation through a policy of high interest rates. It will be assumed that the target of monetary policy now becomes the exchange rate and interest rates are set at a high level to lower the exchange rate (defined as the price of the foreign currency in terms of the domestic one). Even if this strategy may work it may produce negative effects on output growth and the distribution of income. The lowering of the exchange rate target would have the following e®ects on distribution. It would cause a reduction in the growth of output, it would lower the wage share. The share of domestically produced income distributed abroad should increase instead. The domestic interest rate share would rise only for suitable small values of the parameter, which links imports to income. The effect on the capital share is indeed uncertain

Updating Wealth in an Asset Pricing Model with Heterogeneous Agents

We consider an asset-pricing model with wealth dynamics in a market populated by heterogeneous agents. By assuming that all agents belonging to the same group agree to share their wealth whenever an agent joins the group (or leaves it), we develop an adaptive model which characterizes the evolution of wealth distribution when agents switch between different trading strategies. Two groups with heterogeneous beliefs are considered: fundamentalists and chartists. The model results in a nonlinear three-dimensional dynamical system, which we have studied in order to investigate complicated dynamics and to explain wealth distribution among agents in the long run

Local and Global Dynamics in a Discrete Time Growth Model with Nonconcave Production Function

We study the dynamics shown by the discrete time neoclassical one-sector growth model with differential savings while assuming a nonconcave production function. We prove that complex features exhibited are related both to the structure of the coexixting attractors and to their basins. We also show that complexity emerges if the elasticity of substitution between production factors is low enough and shareholders save more than workers, confirming the results obtained while considering concave production functions

Local and Global Dynamics in a Neoclassical Growth Model with NonConcave Production Function and NonConstant Population Growth Rate

In this paper we analyze the dynamics shown by the neoclassical one-sector growth model with differential savings as in Bohm and Kaas [J. Econom. Dynam. Control, 24 (2000), pp. 965--980] while assuming a sigmoidal production function as in [V. Capasso, R. Engbers, and D. La Torre, Nonlinear Anal., 11 (2010), pp. 3858--3876] and the labor force dynamics described by the Beverton--Holt equation (see [R. J. H. Beverton and S. J. Holt, Fishery Invest., 19 (1957), pp. 1--533]). We prove that complex features are exhibited, related both to the structure of the coexisting attractors (which can be periodic or chaotic) and to their basins (which can be simple or nonconnected). In particular we show that complexity emerges if the elasticity of substitution between production factors is low enough and shareholders save more than workers, confirming the results obtained with concave production functions. Anyway, in contrast to previous studies, the use of the S-shaped production function implies the existence of a poverty trap: by performing a global analysis we study the properties of the regions generating trajectories converging to it