341 research outputs found

    A model of credit limits and bankruptcy with applications to welfare and indebtedness

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    This paper presents a macroeconomic model of unsecured consumer debt and default where credit conditions consist of pre-approved interest rates and borrowing limits, a feature of actual credit cards. All loans, irrespective of their size and risk, take place against the same type of credit line, and some borrowers are credit constrained. This type of situation is shown to arise in a free-entry competitive equilibrium if there are fixed costs in banking and the banks' decisions on interest rates and on credit limits are made separately. Numerical experiments are conducted to study, on one hand, the macroeconomic and welfare effects of the consumer bankruptcy code, and on the other hand, the consequences of various factors for both indebtedness and bankruptcy. Restricting bankruptcy filings - be it through a stricter Chapter 7 means testing or a longer period of credit exclusion - leads to sizable welfare loses. The recent rise in filing rates and debt is best explained by a combination of lower intermediation costs and more severe non-discretionary expenditures shocks. The endogenous response ofthe credit limit proves to be crucial for these findings Keywords; bankruptcy, unsecured credit, general equilibrium, default risk, credit limits

    Schooling and distortions in a vintage capital model

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    This paper integrates the analysis of choices on education and on technology adoption to study international economic disparities. Two candidate explanations are considered: di¤erences in distortions that a¤ect the cost of technology adoption and di¤erences in the e¤ectiveness of schools. The implications of these two factors for di¤erences in output per capita, educational attainment, and the age of technologies across-countries are assessed in a vintage capital model with technology-speci…c learning-by-doing. Predictions are obtained for a parameterized economy that matches US aggregate observations and evidence on learning. Di¤erences in investment distortions produce plausible correlations only if the major role of education is to improve the ability to learn technologies. On the other hand, di¤erences in school e¤ectiveness produce plausible results only if the role of education is to provide a productive ability that is independent of learning.

    Wage inequality and unemployment with overeducation

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    A skill-biased change in technology can account at once for the changes observed in a number of important variables of the US labour market between 1970 and 1990. These include the increasing inequality in wages, both between and within education groups, and the increase in unemployment at all levels of education. In contrast, in previous literature this type of technology shock cannot account for all of these changes. The paper uses a matching model with a segmented labour market, an imperfect correlation between individual ability and education, and a fixed cost of setting up a job. The endogenous increase in overeducation is key to understand the response of unemployment to the technology shock.Unemployment, wage premium, overeducation, SBTC

    Are changes in education important for the wage premium and unemployment?

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    A generalized rise in unemployment rates for both college and high-school graduates, a widening education wage premium, and a sharp increase in college education participation are characteristic features of the transformations of the U.S. labor market between 1970 and 1990. This paper investigates the interactions between these changes in the labor market and in educational attainment. First, it develops an equilibrium search and matching model of the labor market where education is endogenously determined. Second, calibrated versions of the model are used to study quantitatively whether either a skill-biased change in technology or a mismatch shock can explain the above facts. The skill-biased shock accounts for a considerable part of the changes but fails to produce the increase in unemployment for the educated labor force. The mismatch shock explains instead much of the change in the four variables, including the wage premium.Education, wage Premium, unemployment

    Twisted electrons as an imaging tool for probing chiral molecules in strong field ionization

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    Orbital angular momentum (OAM) carried by vortex beams has seen an explosion of interest across fields and this is particularly true in attosecond physics. Given that twisted electrons have been shown to be sensitive to the chirality of molecules, exploring this sensitivity on the attosecond scale is a particularly exciting prospect. The OAM of photoelectrons has been theoretically studied discussing ways to measure and understand the ionization via an analytic formalism. This opens up the possibility of using the photoelectron OAM as an imaging tool. However, in most of the earlier studies the effects of the initial state on the photoelectron OAM have been neglected. In this project, using an analytic formalism to produce chiral hydrogen states, we have investigated how the photoelectron OAM in strong field ionization can be used to image molecular chirality

    The European demographic transition

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    This paper investigates the factors that shaped the demographic transition in a number of European countries (Sweden, England, and France) since the mid 18th century. The analytical framework is a version of the neoclassical growth model with dynastic preferences calibrated to match the Swedish experience. This setup is studied quantitatively to asses the contribution of various factors to the explanation of the observed demographic patterns, both over time and across countries. The factors considered are mortality changes, technological progress, and the evolution of the cost of children. The analysis suggests that the contribution of observedmortality rates and technology is only partial. A substantial part of the demographic-transition facts must be attributed to unobservable variation in the cost of children, both over time and across countries Keywords; altruism, growth, demographic transition, mortality, fertility

    Demographics and the politics of capital taxation in a life-cycle economy

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    This article studies the effects of demographics on the mix of tax rates on labour and capital. It uses a quantitative general-equilibrium overlapping-generations model where tax rates are voted without past commitments in every period and characterized as a Markov equilibrium. In the U.S., the younger voting-age population in 1990 compared to 1965 accounts for the observed decline in the relative capital tax rate between those two years. A younger population rises the net return to capital, leads voters to increase their savings, and results in a preference for lower taxes on capital Conversely, ageing might increase capital taxation. Keywords; markov policies, demographic change, capital and labor taxation

    Evaluating Youth Empowerment : The Construction and Validation of an Inventory of Dimensions and Indicators

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    Empowerment is a concept that has become increasingly used over recent years. However, little research has been undertaken into how empowerment can be evaluated, particularly in the case of young people. The aim of this article is to present an inventory of dimensions and indicators of youth empowerment. The article describes the various phases in the construction and validation of the inventory. These phases were (1) a contrast of the inventory of dimensions and indicators against specialized published writings on youth empowerment; (2) the validation of the resulting inventory by experts; and (3) a contrast with young people through four participatory evaluation processes and six life stories. The tool is scientifically and practically useful and enables the impact of youth empowerment programmes to be evaluated; it also serves to plan and implement socio-educational processes aimed at influencing the empowerment of young people
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