This paper uses a tractable macroeconomic model with idiosyncratic human capital risk and incomplete markets to analyze the growth and welfare effects of business cycles. The analysis is based on the assumption that the elimination of business cycles eliminates the variation in idiosyncratic risk. The paper shows that a reduction in the variation in idiosyncratic risk decreases the ratio of phy...

T H E welfare states of the affluent democracies now stand at the centre of political discussion and social conflict. Analysts frequently portray these conflicts as fundamental struggles between supporters and opponents of the basic principles of the post-war social contract. They often emphasize that the politics of social policy are played out against the backdrop of a transformed global econ...

Prescriptive economics requires that, unless there are very good reasons to the contrary, economic policy should be based on the principle that individuals’ preferences should count. Indeed, the entire body of ‘welfare economics’ centres round the formal identity of the statement “X prefers A to B” and the statement “X has higher welfare in A rather than B”. This combination of a seemingly inno...

troversies involves the relationship between globalization and the state, and especially economic globalization and the welfare state. Scholars, public figures, analysts, and theorists all have contributed to an extensive and rapidly growing literature. Among many, a consensus is emerging that globalization has at least some type of relationship with the welfare state, even if the exact nature ...

We analyze in this paper the growth and welfare consequences arising from the lack of auditing commitment in a credit market with costly state verification. Specifically, two endogenous growth models, of which one allows lenders to commit to costly auditing strategies to identify borrowers’ investment returns and the other does not, are compared. We show that the inability to commit acts as an ...

We analyze in this paper the growth and welfare consequences arising from the lack of auditing commitment in a credit market with costly state verification. Specifically, two endogenous growth models, of which one allows lenders to commit to costly auditing strategies to identify borrowers’ investment returns and the other does not, are compared. We show that the inability to commit acts as an ...

Editorials Can the economic crisis have an impact on tuberculosis in the EU/EEA? Each year, 24 March marks World Tuberculosis Day in an attempt to raise public awareness about the epidemic. The European Parliament Committee on the Environment, Public Health and Food Safety will exchange their views on tuberculosis (TB) in Europe in a debate on 21 March 2012. In preparation of this debate concer...

Many of the Organization for Economic Cooperation and Development countries use global budgeting to control all or certain portions of their health care expenditures. Although the use of global budgets as a cost-containment tool has not been implemented in the United States in any comprehensive way, recent health care reform initiatives have increased the need for research into such tools. In g...