Michio Morishima
- Published in print:
- 1969
- Published Online:
- November 2003
- ISBN:
- 9780198281641
- eISBN:
- 9780191596667
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198281641.003.0013
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Chapter 10 was concerned with the Final State Turnpike Theorem on the assumptions that consumption of each good per worker is fixed throughout the planning period and that the authorities try to ...
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Chapter 10 was concerned with the Final State Turnpike Theorem on the assumptions that consumption of each good per worker is fixed throughout the planning period and that the authorities try to maximize the stocks of goods that they can bestow, at the horizon, upon the future citizens; this chapter looks at a Second Turnpike Theorem. The partial optimization for the sake of the future should more properly be superseded by a general mutual optimization, so that the benefits from the properties initially available are shared between the people living in the planning period and those after that; this would inevitably cause confrontation with one of the hardest problems of economics—the interpersonal and intertemporal comparisons of utilities. In this chapter, attempts to solve the crux of the problem are abandoned and the other extreme is addressed: the conditions are derived for Ramsey optimality as distinct from DOSSO efficiency, i.e. optimization is in favour of the people in the planning period, and the satisfaction of the future residents is pegged at a certain level, of which the present residents approve. Among all feasible programmes that leave, at the end of the planning period, necessary amounts of goods for the future residents, the question is whether the people living choose a single one that is most preferable from their own point of view, i.e. there is a switch over of ideology from abstinence for the future to satisfaction in the transient life. The different sections of the chapter include discussion of: two norms of optimum growth—the Golden Balanced Growth path and the Consumption Turnpike; the existence of the Consumption Turnpike; the Silvery Rule of Accumulation’ the singular case where there is no discrimination between the living and the coming people; the Consumption Turnpike Theorem—the cases of the subjective time‐preference factor not being greater than the growth factor of the population, and of the former being greater than the latter; and an example of a cyclic Ramsey‐optimum growth.Less
Chapter 10 was concerned with the Final State Turnpike Theorem on the assumptions that consumption of each good per worker is fixed throughout the planning period and that the authorities try to maximize the stocks of goods that they can bestow, at the horizon, upon the future citizens; this chapter looks at a Second Turnpike Theorem. The partial optimization for the sake of the future should more properly be superseded by a general mutual optimization, so that the benefits from the properties initially available are shared between the people living in the planning period and those after that; this would inevitably cause confrontation with one of the hardest problems of economics—the interpersonal and intertemporal comparisons of utilities. In this chapter, attempts to solve the crux of the problem are abandoned and the other extreme is addressed: the conditions are derived for Ramsey optimality as distinct from DOSSO efficiency, i.e. optimization is in favour of the people in the planning period, and the satisfaction of the future residents is pegged at a certain level, of which the present residents approve. Among all feasible programmes that leave, at the end of the planning period, necessary amounts of goods for the future residents, the question is whether the people living choose a single one that is most preferable from their own point of view, i.e. there is a switch over of ideology from abstinence for the future to satisfaction in the transient life. The different sections of the chapter include discussion of: two norms of optimum growth—the Golden Balanced Growth path and the Consumption Turnpike; the existence of the Consumption Turnpike; the Silvery Rule of Accumulation’ the singular case where there is no discrimination between the living and the coming people; the Consumption Turnpike Theorem—the cases of the subjective time‐preference factor not being greater than the growth factor of the population, and of the former being greater than the latter; and an example of a cyclic Ramsey‐optimum growth.
Matthew P. Drennan
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780300209587
- eISBN:
- 9780300216349
- Item type:
- chapter
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300209587.003.0006
- Subject:
- Political Science, Public Policy
Traces the development of the economic theory of consumption from Malthus and Ricardo to Keynes and Milton Friedman. The arguments of critics of the prevailing Friedman–Modigliani–Brumberg paradigm ...
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Traces the development of the economic theory of consumption from Malthus and Ricardo to Keynes and Milton Friedman. The arguments of critics of the prevailing Friedman–Modigliani–Brumberg paradigm are presented, leading to the outline of a theory to replace it. In the existing paradigm, there is no place for income distribution. Consequently, public policy analysis of the Great Recession leaves out of consideration a major cause of the Great Recession and the slow recovery.Less
Traces the development of the economic theory of consumption from Malthus and Ricardo to Keynes and Milton Friedman. The arguments of critics of the prevailing Friedman–Modigliani–Brumberg paradigm are presented, leading to the outline of a theory to replace it. In the existing paradigm, there is no place for income distribution. Consequently, public policy analysis of the Great Recession leaves out of consideration a major cause of the Great Recession and the slow recovery.
Matthew P Drennan
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780300209587
- eISBN:
- 9780300216349
- Item type:
- book
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300209587.001.0001
- Subject:
- Political Science, Public Policy
This book tells two stories. First, it shows that rising income inequality played a major role in causing the financial crisis and Great Recession of 2008-2009. While others have argued that rising, ...
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This book tells two stories. First, it shows that rising income inequality played a major role in causing the financial crisis and Great Recession of 2008-2009. While others have argued that rising, indeed surging, household debt in the 1990s and 2000s contributed to the financial collapse, none have related rising household debt to the dramatic rise in income inequality. The rise in household debt was not the result of a rash of luxury, but instead was the effort to maintain consumption despite stagnant incomes. Part of that effort is reflected in the unprecedented drop in the rate of saving from around 10 percent to near zero. It is also reflected in the sharp rise of relative spending on three necessities of a middle class lifestyle -- housing, education, and health. Some of that jump in relative spending was brought about by steep price increases. Their prices were bid up by those whose incomes had skyrocketed. Thus to the usual suspects causing the recession–unsustainable residential mortgage debt, low interest rates, predatory lending and the housing price bubble–income inequality must be included. The second story is that mainstream economists have misunderstood the causes of the recession because they have adhered to a macroeconomic theory that ignores the role of income distribution. Mainstream economic theory maintains that inequality has no impact on macroeconomic outcomes. That view is incorrect and led most economists to ignore the serious consequences of rising inequality, despite the striking parallel with the Great Depression.Less
This book tells two stories. First, it shows that rising income inequality played a major role in causing the financial crisis and Great Recession of 2008-2009. While others have argued that rising, indeed surging, household debt in the 1990s and 2000s contributed to the financial collapse, none have related rising household debt to the dramatic rise in income inequality. The rise in household debt was not the result of a rash of luxury, but instead was the effort to maintain consumption despite stagnant incomes. Part of that effort is reflected in the unprecedented drop in the rate of saving from around 10 percent to near zero. It is also reflected in the sharp rise of relative spending on three necessities of a middle class lifestyle -- housing, education, and health. Some of that jump in relative spending was brought about by steep price increases. Their prices were bid up by those whose incomes had skyrocketed. Thus to the usual suspects causing the recession–unsustainable residential mortgage debt, low interest rates, predatory lending and the housing price bubble–income inequality must be included. The second story is that mainstream economists have misunderstood the causes of the recession because they have adhered to a macroeconomic theory that ignores the role of income distribution. Mainstream economic theory maintains that inequality has no impact on macroeconomic outcomes. That view is incorrect and led most economists to ignore the serious consequences of rising inequality, despite the striking parallel with the Great Depression.
Matthew P. Drennan
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780300209587
- eISBN:
- 9780300216349
- Item type:
- chapter
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300209587.003.0008
- Subject:
- Political Science, Public Policy
Rising income inequality has had deleterious effects upon household debt and saving. The overhang of debt and revived saving by households post 2007 will be a drag on economic expansion for some ...
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Rising income inequality has had deleterious effects upon household debt and saving. The overhang of debt and revived saving by households post 2007 will be a drag on economic expansion for some years. The adverse aftereffects of the Great Recession will be much longer than those of the recent past. One thing is clear: the cause of the Great Recession is mostly not economic—it is mostly political. So the solution, if ever devised, will be mostly political. Another financial and economic crash just as bad or worse than the last might focus Congress on correcting causes of income inequality. I present a plea for a more fact-based economics than an authority-based economics. Why have today’s economists failed to jettison the mainstream theory of consumption in the face of so much evidence to the contrary?Less
Rising income inequality has had deleterious effects upon household debt and saving. The overhang of debt and revived saving by households post 2007 will be a drag on economic expansion for some years. The adverse aftereffects of the Great Recession will be much longer than those of the recent past. One thing is clear: the cause of the Great Recession is mostly not economic—it is mostly political. So the solution, if ever devised, will be mostly political. Another financial and economic crash just as bad or worse than the last might focus Congress on correcting causes of income inequality. I present a plea for a more fact-based economics than an authority-based economics. Why have today’s economists failed to jettison the mainstream theory of consumption in the face of so much evidence to the contrary?
Michio Morishima
- Published in print:
- 1969
- Published Online:
- November 2003
- ISBN:
- 9780198281641
- eISBN:
- 9780191596667
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198281641.003.0016
- Subject:
- Economics and Finance, Development, Growth, and Environmental
The problem of optimum savings has been discussed by Ramsey on the assumption of a constant population and later by a number of economists on the more general assumption that the labour force expands ...
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The problem of optimum savings has been discussed by Ramsey on the assumption of a constant population and later by a number of economists on the more general assumption that the labour force expands at a constant exogenously fixed rate; different rates of population growth lead to different solutions; i.e. the path of optimum capital accumulation is relative to the population growth. In contrast, Meade and others have been concerned with the problem of optimum population, assuming among other things that at any given time the economy is provided with a given rate of savings as well as a given stock of capital equipment to be used; it follows that the path of optimum population is relative to capital accumulation. It is evident that these two partial optimization procedures should be synthesized so as to give a genuine supreme path, which is optimum with respect to both capital and population. This final chapter generalizes the Ramsey–Meade problem in that direction and shows that two kinds of long‐run paths—efficient and optimum paths—will under some conditions converge to the Golden Growth path when the time horizon of the paths becomes infinite; the two long‐run tendencies that are derived may be regarded as extensions of those discussed in the chapters entitled First and Second Turnpike Theorems. The different sections of the chapter discuss: the generalized Ramsey–Meade problem; the finding that the Golden Equilibrium rate of growth is greater than the Silvery Equilibrium rate; the Average Final State Turnpike Theorem; the strong superadditivity of processes—a sufficient condition for strong convergence; the tendency towards the ‘top facet’ as the general rule; cyclic phenomena; the Average Consumption Turnpike Theorem and its proof; and aversion to fluctuation in consumption.Less
The problem of optimum savings has been discussed by Ramsey on the assumption of a constant population and later by a number of economists on the more general assumption that the labour force expands at a constant exogenously fixed rate; different rates of population growth lead to different solutions; i.e. the path of optimum capital accumulation is relative to the population growth. In contrast, Meade and others have been concerned with the problem of optimum population, assuming among other things that at any given time the economy is provided with a given rate of savings as well as a given stock of capital equipment to be used; it follows that the path of optimum population is relative to capital accumulation. It is evident that these two partial optimization procedures should be synthesized so as to give a genuine supreme path, which is optimum with respect to both capital and population. This final chapter generalizes the Ramsey–Meade problem in that direction and shows that two kinds of long‐run paths—efficient and optimum paths—will under some conditions converge to the Golden Growth path when the time horizon of the paths becomes infinite; the two long‐run tendencies that are derived may be regarded as extensions of those discussed in the chapters entitled First and Second Turnpike Theorems. The different sections of the chapter discuss: the generalized Ramsey–Meade problem; the finding that the Golden Equilibrium rate of growth is greater than the Silvery Equilibrium rate; the Average Final State Turnpike Theorem; the strong superadditivity of processes—a sufficient condition for strong convergence; the tendency towards the ‘top facet’ as the general rule; cyclic phenomena; the Average Consumption Turnpike Theorem and its proof; and aversion to fluctuation in consumption.
Máire ní Fhlathúin
- Published in print:
- 2015
- Published Online:
- May 2017
- ISBN:
- 9780748640683
- eISBN:
- 9781474415996
- Item type:
- book
- Publisher:
- Edinburgh University Press
- DOI:
- 10.3366/edinburgh/9780748640683.001.0001
- Subject:
- Literature, 19th-century and Victorian Literature
The book traces the development of British Indian literature from the early days of the nineteenth century to the end of the Victorian period. Previously unstudied poems and essays drawn from the ...
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The book traces the development of British Indian literature from the early days of the nineteenth century to the end of the Victorian period. Previously unstudied poems and essays drawn from the thriving periodicals culture of British India are examined alongside novels and travel-writing by authors including Philip Meadows Taylor, Emma Roberts and Rudyard Kipling, and the historical narratives of James Tod. Opening with an overview and discussion of the literary marketplace of the early nineteenth century, it moves on to the analysis of key moments, events and concerns of Victorian India, including the legacy of the Hastings impeachment, the Indian ‘Mutiny’, the sati controversy, and the rise of Bengal nationalism. These are re-assessed within their literary and political contexts, emphasising the engagement of British writers with canonical British literature (Scott, Byron) as well as the mythology and historiography of India and their own responses to their immediate surroundings. The book examines representations of the experience of being in India, in chapters on the poetry and prose of exile, and the dynamics of consumption. It also analyses colonial representations of the landscape and societies of India itself, in chapters on the figure of the bandit / hero, female agency and self-sacrifice, and the use of historiography to enlist indigenous narratives in the project of Empire.Less
The book traces the development of British Indian literature from the early days of the nineteenth century to the end of the Victorian period. Previously unstudied poems and essays drawn from the thriving periodicals culture of British India are examined alongside novels and travel-writing by authors including Philip Meadows Taylor, Emma Roberts and Rudyard Kipling, and the historical narratives of James Tod. Opening with an overview and discussion of the literary marketplace of the early nineteenth century, it moves on to the analysis of key moments, events and concerns of Victorian India, including the legacy of the Hastings impeachment, the Indian ‘Mutiny’, the sati controversy, and the rise of Bengal nationalism. These are re-assessed within their literary and political contexts, emphasising the engagement of British writers with canonical British literature (Scott, Byron) as well as the mythology and historiography of India and their own responses to their immediate surroundings. The book examines representations of the experience of being in India, in chapters on the poetry and prose of exile, and the dynamics of consumption. It also analyses colonial representations of the landscape and societies of India itself, in chapters on the figure of the bandit / hero, female agency and self-sacrifice, and the use of historiography to enlist indigenous narratives in the project of Empire.
Allison Abra
- Published in print:
- 2017
- Published Online:
- January 2018
- ISBN:
- 9781784994334
- eISBN:
- 9781526128218
- Item type:
- book
- Publisher:
- Manchester University Press
- DOI:
- 10.7228/manchester/9781784994334.001.0001
- Subject:
- History, Social History
Dancing in the English style explores the development, experience, and cultural representation of popular dance in Britain from the end of the First World War to the early 1950s. It describes the ...
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Dancing in the English style explores the development, experience, and cultural representation of popular dance in Britain from the end of the First World War to the early 1950s. It describes the rise of modern ballroom dancing as Britain’s predominant popular style, as well as the opening of hundreds of affordable dancing schools and purpose-built dance halls around the country. It focuses in particular on the relationship between two emerging commercial producers – the dance profession and dance hall industry – and the consumers who formed the dancing public. Together these groups negotiated the creation of a ‘national’ dancing style and experience, which constructed, circulated, and commodified ideas about national identity. At the same time, the book emphasizes the global, exploring the impact of international cultural products on national identity construction, the complexities of Americanisation, and Britain’s place in a transnational system of production and consumption that forged the dances of the Jazz Age.Less
Dancing in the English style explores the development, experience, and cultural representation of popular dance in Britain from the end of the First World War to the early 1950s. It describes the rise of modern ballroom dancing as Britain’s predominant popular style, as well as the opening of hundreds of affordable dancing schools and purpose-built dance halls around the country. It focuses in particular on the relationship between two emerging commercial producers – the dance profession and dance hall industry – and the consumers who formed the dancing public. Together these groups negotiated the creation of a ‘national’ dancing style and experience, which constructed, circulated, and commodified ideas about national identity. At the same time, the book emphasizes the global, exploring the impact of international cultural products on national identity construction, the complexities of Americanisation, and Britain’s place in a transnational system of production and consumption that forged the dances of the Jazz Age.
Kelly Erby
- Published in print:
- 2016
- Published Online:
- May 2017
- ISBN:
- 9780816691302
- eISBN:
- 9781452955353
- Item type:
- book
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816691302.001.0001
- Subject:
- History, Cultural History
Restaurant Republic examines the nascent restaurant landscape in Boston in its entirety, from the most plebian of eateries to the extremely elite and refined. Focusing on the rise of commercial ...
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Restaurant Republic examines the nascent restaurant landscape in Boston in its entirety, from the most plebian of eateries to the extremely elite and refined. Focusing on the rise of commercial dining in one specific city provides the opportunity to systematically explore the varied networks of public dining venues that catered to distinct groups of Americans. The story of why Americans embraced dining out and the wide variety of ways in which they began to do so is an important one. Restaurants were a major part of a growing trend in urban public venues dedicated to consumer leisure in the nineteenth century. Along with theatres, department stores, and hotels, restaurants provided a public stage at a time when, still fresh from their revolution, Americans were eager to enter into the public sphere and define themselves as a people. But perhaps more than these other public commercial spaces, restaurants were also sharply differentiated. Thus, the study of restaurant dining in this period provides an opportunity to cast new light on how Americans attempted to balance the revolutionary ideal of egalitarianism against a growing capitalist consumer culture that both reflected and contributed to social hierarchy.Less
Restaurant Republic examines the nascent restaurant landscape in Boston in its entirety, from the most plebian of eateries to the extremely elite and refined. Focusing on the rise of commercial dining in one specific city provides the opportunity to systematically explore the varied networks of public dining venues that catered to distinct groups of Americans. The story of why Americans embraced dining out and the wide variety of ways in which they began to do so is an important one. Restaurants were a major part of a growing trend in urban public venues dedicated to consumer leisure in the nineteenth century. Along with theatres, department stores, and hotels, restaurants provided a public stage at a time when, still fresh from their revolution, Americans were eager to enter into the public sphere and define themselves as a people. But perhaps more than these other public commercial spaces, restaurants were also sharply differentiated. Thus, the study of restaurant dining in this period provides an opportunity to cast new light on how Americans attempted to balance the revolutionary ideal of egalitarianism against a growing capitalist consumer culture that both reflected and contributed to social hierarchy.
Assaf Razin
- Published in print:
- 2015
- Published Online:
- May 2016
- ISBN:
- 9780262028592
- eISBN:
- 9780262327701
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262028592.003.0011
- Subject:
- Economics and Finance, International
The benchmark New Keynesian model comprises three globalization features:1. International labor mobility: both inward and outward movements of labor. The presumption is that labor flows tend to ...
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The benchmark New Keynesian model comprises three globalization features:1. International labor mobility: both inward and outward movements of labor. The presumption is that labor flows tend to mitigate wage demands because they introduce a substitution between domestic and foreign labor. 2. International trade in goods. The presumption is that trade leads to specialization in domestic production and diversification in domestic consumption. Therefore, trade tends to weaken the link between domestic production and domestic consumption. As a result, the effect of the fluctuations of domestic production on inflation is also weakened by the presence of international trade in goods. 3. Financial integration with the rest of the world. International trade in financial assets allows households to smooth their consumption over time and over states of nature. Such a model may be used to simulate monetary policies during The Great Moderation from 1985 to 2007.Less
The benchmark New Keynesian model comprises three globalization features:1. International labor mobility: both inward and outward movements of labor. The presumption is that labor flows tend to mitigate wage demands because they introduce a substitution between domestic and foreign labor. 2. International trade in goods. The presumption is that trade leads to specialization in domestic production and diversification in domestic consumption. Therefore, trade tends to weaken the link between domestic production and domestic consumption. As a result, the effect of the fluctuations of domestic production on inflation is also weakened by the presence of international trade in goods. 3. Financial integration with the rest of the world. International trade in financial assets allows households to smooth their consumption over time and over states of nature. Such a model may be used to simulate monetary policies during The Great Moderation from 1985 to 2007.
Kelly Erby
- Published in print:
- 2016
- Published Online:
- May 2017
- ISBN:
- 9780816691302
- eISBN:
- 9781452955353
- Item type:
- chapter
- Publisher:
- University of Minnesota Press
- DOI:
- 10.5749/minnesota/9780816691302.003.0005
- Subject:
- History, Cultural History
In the epilogue of Restaurant Republic, the author traces the story of commercial dining in Boston into the early twentieth century and reviews the major points of the previous chapters. The findings ...
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In the epilogue of Restaurant Republic, the author traces the story of commercial dining in Boston into the early twentieth century and reviews the major points of the previous chapters. The findings will be useful to those interested in exploring relationships between food, culture, and identity in other cities, as well as in our own time.Less
In the epilogue of Restaurant Republic, the author traces the story of commercial dining in Boston into the early twentieth century and reviews the major points of the previous chapters. The findings will be useful to those interested in exploring relationships between food, culture, and identity in other cities, as well as in our own time.
