This paper concerns a propagation mechanism in an economy where many individuals follow a threshold rule and interact with a positive feedback. We derive an asymptotic distribution of the propagation size when the number of the agents tends to infinity. The propagation distribution exhibits a slower convergence to a deterministic value than it would if the agents followed a smooth adjustment po...

This paper studies competitive equilibria of a production economy with aggregate productivity shocks. There is a continuum of consumers who face borrowing constraints and individual labor endowment shocks. The dynamic economy is described in terms of sequences of aggregate distributions. The existence of competitive equilibrium is proven and a recursive characterization is established. In parti...

In contrast to previous studies on the economic impact of universities that focus on the demand side, this study centres on universities’ effects on the supply side of the economy. Through a case study of the Spanish University System, this paper proposes a methodology based on counterfactual scenarios and growth accounting to estimate the long-term impacts of universities on their regional eco...

We study pure exchange economies with symmetries on preferences up to taste intensity transformations. In a 2-person, 2-good endowment economy, we show that bilateral symmetry on each utility functional precludes a rectangle in the Edgeworth box as the location of Pareto optimal allocations. Under strictly quasi-concave preferences, a larger set can be ruled out. The inadmissible region is stil...

The paper examines optimal monetary policy delegation in an economy where wages are set strategically by a single economy-wide union whose objectives relate to employment and the real wage. Crucially, the central bank exerts imprecise control over inflation, giving rise to a positive relationship between the mean value of inflation and its variance. In this context, union concerns with regard t...

The New Deal for Young People (NDYP) is one of the main components of the UK government’s Welfare-to-Work strategy aimed at raising employment and reducing benefit dependency. It combines elements of an active labour market programme with a stricter benefit regime. This paper evaluates its impact on the wider economy, emphasising the importance of the programme’s effect on wage pressure, which ...

The role of government expenditure is analyzed in the context of growing economy with endogenous labor supply and with investment adjustment costs. Assuming the dynasty model of representative consumer’s utility maximization i.e., the present value of over time felicity function maximization under the law of motion capital where felicity function depends consumption, leisure and government expe...

The aim of this research is to evaluate future retail developments in a medium-sized town and the indirect effects of individual behaviour on the local economy. Therefore we combine a spatial microsimulation model with a conditional logit model estimating the spatial shopping behaviour of households to simulate the effect of future retail developments. Then, we estimate the macro effects of the...

Informality as a Stepping Stone: Entrepreneurial Entry in a Developing Economy We model decisions with respect to formality or informality for entrepreneurs in a new industry for a developing economy. We show that informality allows a leader to explore, without significant sunk costs, the potential profitability of the industry; that is, informality may be a stepping stone, enabling an entrepre...

Based on the recursive preference approach, the dynamic and global properties of the two-country open economy are examined with one good and inputs of labor and capital, with capital being freely traded internationally. First by showing that the world’s consumption increases (resp. decreases) with an increase (resp. decrease) in the world’s capital, the global stability of the economy is obtain...