Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.001.0001
- Subject:
- Economics and Finance, Financial Economics
This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical ...
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This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical parts result from interdisciplinary research between economics and state of the art applied mathematics. From the economic theory and the mathematics of stochastic optimal control, benchmarks are derived for the optimal debt and equilibrium real exchange rate in an environment where both the return on capital and the real rate of interest are stochastic variables. The theoretically derived equilibrium real exchange rate — the natural real exchange rate (NATREX) — is where the real exchange rate is heading. These benchmarks are applied to answer the following questions: What is a theoretically based empirical measure of a “misaligned” exchange rate that increases the probability of a significant depreciation or a currency crisis? What is a theoretically based empirical measure of an “excess” debt that increases the probability of a debt crisis? What is the interaction between an excess debt and a misaligned exchange rate? The theory is applied to evaluate the Euro exchange rate, the exchange rates of the transition economies of Eastern Europe, the sustainability of U.S. current account deficits, and derives warning signals of the Asian crises, defaults, and debt crises in emerging markets.Less
This book focuses on the interaction between equilibrium real exchange rates, optimal external debt, endogenous optimal growth, and current account balances in a world of uncertainty. The theoretical parts result from interdisciplinary research between economics and state of the art applied mathematics. From the economic theory and the mathematics of stochastic optimal control, benchmarks are derived for the optimal debt and equilibrium real exchange rate in an environment where both the return on capital and the real rate of interest are stochastic variables. The theoretically derived equilibrium real exchange rate — the natural real exchange rate (NATREX) — is where the real exchange rate is heading. These benchmarks are applied to answer the following questions: What is a theoretically based empirical measure of a “misaligned” exchange rate that increases the probability of a significant depreciation or a currency crisis? What is a theoretically based empirical measure of an “excess” debt that increases the probability of a debt crisis? What is the interaction between an excess debt and a misaligned exchange rate? The theory is applied to evaluate the Euro exchange rate, the exchange rates of the transition economies of Eastern Europe, the sustainability of U.S. current account deficits, and derives warning signals of the Asian crises, defaults, and debt crises in emerging markets.
Ken Binmore
- Published in print:
- 2005
- Published Online:
- January 2007
- ISBN:
- 9780195178111
- eISBN:
- 9780199783670
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195178111.001.0001
- Subject:
- Economics and Finance, Microeconomics
This book attempts to create an evolutionary theory of fairness. Sharing food is commonplace in the animal kingdom because it insures animals that share against hunger. Anthropologists report that ...
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This book attempts to create an evolutionary theory of fairness. Sharing food is commonplace in the animal kingdom because it insures animals that share against hunger. Anthropologists report that hunter-gatherer societies which survived into the 20th century shared on a very egalitarian basis. What can such information tell us about the sense of fairness with which modern man is born? Using game theory as a basic tool, the book argues that fairness norms should be seen as a device for selecting an efficient equilibrium in the human game of life. Evolutionary arguments are then used to argue that the deep structure of this device resembles the original position formulated by John Rawls in his Theory of Justice. Such an evolutionary framework allows problems over welfare comparison and norm enforcement to be tackled in a manner that resolves the long debate between utilitarianism and egalitarianism.Less
This book attempts to create an evolutionary theory of fairness. Sharing food is commonplace in the animal kingdom because it insures animals that share against hunger. Anthropologists report that hunter-gatherer societies which survived into the 20th century shared on a very egalitarian basis. What can such information tell us about the sense of fairness with which modern man is born? Using game theory as a basic tool, the book argues that fairness norms should be seen as a device for selecting an efficient equilibrium in the human game of life. Evolutionary arguments are then used to argue that the deep structure of this device resembles the original position formulated by John Rawls in his Theory of Justice. Such an evolutionary framework allows problems over welfare comparison and norm enforcement to be tackled in a manner that resolves the long debate between utilitarianism and egalitarianism.
Jonathan Wolff and Avner De-Shalit
- Published in print:
- 2007
- Published Online:
- May 2007
- ISBN:
- 9780199278268
- eISBN:
- 9780191707902
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199278268.003.0003
- Subject:
- Political Science, Political Theory
This chapter deepens the discussion of the nature of disadvantage by asking: what categories of functionings exhaust those necessary to construct a full philosophical theory of disadvantage? ...
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This chapter deepens the discussion of the nature of disadvantage by asking: what categories of functionings exhaust those necessary to construct a full philosophical theory of disadvantage? Beginning with a list offered by Martha Nussbaum, and Sen's capability approach, the concepts of capability and functionings are further analysed, using the method of ‘dynamic public reflective equilibrium’. This involves a dialogue between the philosopher and the public, in this case a series of interviews with disadvantaged people and with professionals who take care of disadvantaged people in a variety of fields. The result is that while basically Nussbaum's list is shown to be intuitive, four additional categories are suggested. Thus, a new list of functionings is devised as part of the task of setting out a particular pluralist account of disadvantage.Less
This chapter deepens the discussion of the nature of disadvantage by asking: what categories of functionings exhaust those necessary to construct a full philosophical theory of disadvantage? Beginning with a list offered by Martha Nussbaum, and Sen's capability approach, the concepts of capability and functionings are further analysed, using the method of ‘dynamic public reflective equilibrium’. This involves a dialogue between the philosopher and the public, in this case a series of interviews with disadvantaged people and with professionals who take care of disadvantaged people in a variety of fields. The result is that while basically Nussbaum's list is shown to be intuitive, four additional categories are suggested. Thus, a new list of functionings is devised as part of the task of setting out a particular pluralist account of disadvantage.
Flavio M. Menezes and Paulo K. Monteiro
- Published in print:
- 2004
- Published Online:
- April 2005
- ISBN:
- 9780199275984
- eISBN:
- 9780191602214
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/019927598X.001.0001
- Subject:
- Economics and Finance, Microeconomics
This book presents an in-depth discussion of the auction theory. It introduces the concept of Bayesian Nash equilibrium and the idea of studying auctions as games. Private, common, and affiliated ...
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This book presents an in-depth discussion of the auction theory. It introduces the concept of Bayesian Nash equilibrium and the idea of studying auctions as games. Private, common, and affiliated values models and multi-object auction models are described. A general version of the Revenue Equivalence Theorem is derived and the optimal auction is characterized to relate the field of mechanism design to auction theory.Less
This book presents an in-depth discussion of the auction theory. It introduces the concept of Bayesian Nash equilibrium and the idea of studying auctions as games. Private, common, and affiliated values models and multi-object auction models are described. A general version of the Revenue Equivalence Theorem is derived and the optimal auction is characterized to relate the field of mechanism design to auction theory.
Ramon Marimon and Andrew Scott (eds)
- Published in print:
- 2001
- Published Online:
- November 2003
- ISBN:
- 9780199248278
- eISBN:
- 9780191596605
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199248273.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
Macroeconomics increasingly uses stochastic dynamic general equilibrium models to understand theoretical and policy issues. Unless very strong assumptions are made, understanding the properties of ...
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Macroeconomics increasingly uses stochastic dynamic general equilibrium models to understand theoretical and policy issues. Unless very strong assumptions are made, understanding the properties of particular models requires solving the model using a computer. This volume brings together leading contributors in the field who explain in detail how to implement the computational techniques needed to solve dynamic economics models. It is based on lectures presented at the 7th Summer School of the European Economic Association on computational methods for the study of dynamic economies, held in 1996. A broad spread of techniques is covered, and their application to a wide range of subjects discussed. The book provides the basics of a tool kit that researchers and graduate students can use to solve and analyse their own theoretical models. It is oriented towards economists who already have the equivalent of a first year of graduate studies or to any advanced undergraduates or researchers with a solid mathematical background. No competence with writing computer codes is assumed. After an introduction by the editors, it is arranged in three parts: I Almost linear methods; II Nonlinear methods; and III Solving some dynamic economies.Less
Macroeconomics increasingly uses stochastic dynamic general equilibrium models to understand theoretical and policy issues. Unless very strong assumptions are made, understanding the properties of particular models requires solving the model using a computer. This volume brings together leading contributors in the field who explain in detail how to implement the computational techniques needed to solve dynamic economics models. It is based on lectures presented at the 7th Summer School of the European Economic Association on computational methods for the study of dynamic economies, held in 1996. A broad spread of techniques is covered, and their application to a wide range of subjects discussed. The book provides the basics of a tool kit that researchers and graduate students can use to solve and analyse their own theoretical models. It is oriented towards economists who already have the equivalent of a first year of graduate studies or to any advanced undergraduates or researchers with a solid mathematical background. No competence with writing computer codes is assumed. After an introduction by the editors, it is arranged in three parts: I Almost linear methods; II Nonlinear methods; and III Solving some dynamic economies.
Mario Amendola and Jean-Luc Gaffard
- Published in print:
- 1998
- Published Online:
- November 2003
- ISBN:
- 9780198293804
- eISBN:
- 9780191595851
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198293801.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This book moves from the consideration that the dominant equilibrium theory is not suited to deal properly with economic changes like innovation and growth, which are, in the nature of structural ...
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This book moves from the consideration that the dominant equilibrium theory is not suited to deal properly with economic changes like innovation and growth, which are, in the nature of structural changes, taking place through processes in real time. It proposes an alternative out‐of‐equilibrium analytical framework that requires a reconstruction of the basic analytical blocks of an economic paradigm. These building blocks (production, money, the human resource, and the market) are analysed in the first part of the book. This makes it possible to look at economic change as a process sketched out by the way in which successive disequilibria between supply and demand interact sequentially at each moment of time and over time. Whereas in equilibrium models the evolution of the economy is determined by the ‘fundamentals’ (technology, preferences, and institutions), here the outcome is heavily influenced by how the process of change itself develops, the sequential decisions taken, and the policies followed. The main analytical issue appears to be, then, the viability of the economic process through which change takes place and the coordination mechanisms required to assure it, rather than the nature of the original shock. The model proposed in the second part of the book is a heuristic tool that makes it possible to explore various alternative evolution paths of the economy, as the result of different kinds of real and monetary shocks. The main result that emerges is that central phenomena—growth, unemployment, and inflation—are neither exclusively demand side nor exclusively supply side issues. They essentially depend on how the different factors involved are coordinated over time. In this light, policy recommendations appear entirely different and in some cases, opposite to those advocated by the dominant equilibrium theory, thus giving a new perspective on the recent past of the western economies.Less
This book moves from the consideration that the dominant equilibrium theory is not suited to deal properly with economic changes like innovation and growth, which are, in the nature of structural changes, taking place through processes in real time. It proposes an alternative out‐of‐equilibrium analytical framework that requires a reconstruction of the basic analytical blocks of an economic paradigm. These building blocks (production, money, the human resource, and the market) are analysed in the first part of the book. This makes it possible to look at economic change as a process sketched out by the way in which successive disequilibria between supply and demand interact sequentially at each moment of time and over time. Whereas in equilibrium models the evolution of the economy is determined by the ‘fundamentals’ (technology, preferences, and institutions), here the outcome is heavily influenced by how the process of change itself develops, the sequential decisions taken, and the policies followed. The main analytical issue appears to be, then, the viability of the economic process through which change takes place and the coordination mechanisms required to assure it, rather than the nature of the original shock. The model proposed in the second part of the book is a heuristic tool that makes it possible to explore various alternative evolution paths of the economy, as the result of different kinds of real and monetary shocks. The main result that emerges is that central phenomena—growth, unemployment, and inflation—are neither exclusively demand side nor exclusively supply side issues. They essentially depend on how the different factors involved are coordinated over time. In this light, policy recommendations appear entirely different and in some cases, opposite to those advocated by the dominant equilibrium theory, thus giving a new perspective on the recent past of the western economies.
Mark L. Latash
- Published in print:
- 2008
- Published Online:
- May 2009
- ISBN:
- 9780195333169
- eISBN:
- 9780199864195
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195333169.001.0001
- Subject:
- Neuroscience, Sensory and Motor Systems, Techniques
This book discusses a general problem in biology: the lack of an adequate language for formulating biologically specific problems. This book describes recent progress in the control and coordination ...
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This book discusses a general problem in biology: the lack of an adequate language for formulating biologically specific problems. This book describes recent progress in the control and coordination of human movement. It begins with a brief history of movement studies and reviews the current central controversies in the area of control of movements with an emphasis on the equilibrium-point hypothesis. An operational definition of synergy is introduced and a method of analysis of synergies is described based on the uncontrolled manifold hypothesis. This method is further used to characterize synergies in a variety of tasks including such common motor tasks as standing, pointing, reaching, standing-up, and manipulation of hand-held objects. Applications of this method to movements by persons with neurological disorders, persons with atypical development, and healthy elderly persons are illustrated, as well as changes in motor synergies with practice. Possible neurophysiological mechanisms of synergies are also discussed, focusing on such conspicuous structures as the spinal cord, the cerebellum, the basal ganglia, and the cortex of the large hemispheres. A variety of models are discussed based on different computational and neurophysiological principles. Possible applications of the introduced definition of synergies to other areas such as perception and language are discussed.Less
This book discusses a general problem in biology: the lack of an adequate language for formulating biologically specific problems. This book describes recent progress in the control and coordination of human movement. It begins with a brief history of movement studies and reviews the current central controversies in the area of control of movements with an emphasis on the equilibrium-point hypothesis. An operational definition of synergy is introduced and a method of analysis of synergies is described based on the uncontrolled manifold hypothesis. This method is further used to characterize synergies in a variety of tasks including such common motor tasks as standing, pointing, reaching, standing-up, and manipulation of hand-held objects. Applications of this method to movements by persons with neurological disorders, persons with atypical development, and healthy elderly persons are illustrated, as well as changes in motor synergies with practice. Possible neurophysiological mechanisms of synergies are also discussed, focusing on such conspicuous structures as the spinal cord, the cerebellum, the basal ganglia, and the cortex of the large hemispheres. A variety of models are discussed based on different computational and neurophysiological principles. Possible applications of the introduced definition of synergies to other areas such as perception and language are discussed.
Sharan Jagpal
- Published in print:
- 2008
- Published Online:
- September 2008
- ISBN:
- 9780195371055
- eISBN:
- 9780199870745
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195371055.003.0018
- Subject:
- Business and Management, Marketing
This chapter shows how the firm can make optimal marketing decisions after allowing for the effects of competitive reaction. It considers multiproduct firms, explicitly allow for cost and demand ...
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This chapter shows how the firm can make optimal marketing decisions after allowing for the effects of competitive reaction. It considers multiproduct firms, explicitly allow for cost and demand uncertainty, distinguish between different behavioral modes for the firm, and show how the firm should adapt its marketing decisions when new information becomes available to it or to its competitors in the future. In particular, it shows how the firm can use marketing-finance fusion to make optimal decisions after simultaneously allowing for competitive reaction and the arrival of new information.Less
This chapter shows how the firm can make optimal marketing decisions after allowing for the effects of competitive reaction. It considers multiproduct firms, explicitly allow for cost and demand uncertainty, distinguish between different behavioral modes for the firm, and show how the firm should adapt its marketing decisions when new information becomes available to it or to its competitors in the future. In particular, it shows how the firm can use marketing-finance fusion to make optimal decisions after simultaneously allowing for competitive reaction and the arrival of new information.
Bernard Van Praag
- Published in print:
- 2007
- Published Online:
- May 2008
- ISBN:
- 9780199226146
- eISBN:
- 9780191718595
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199226146.003.0017
- Subject:
- Economics and Finance, Behavioural Economics
This chapter synthesizes the findings presented in the book. It highlights the success in developing a methodology that can analyse satisfaction along the lines similar to those used by ...
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This chapter synthesizes the findings presented in the book. It highlights the success in developing a methodology that can analyse satisfaction along the lines similar to those used by econometricians to analyse ‘objective’ variables. Future research should focus on developing methods that can estimate decision-utility functions for other domains. The relevance of the neoclassical equilibrium assumption is put into question. In line with the multi-disciplinary content of this text, the book stress the need for strengthening the collaboration with the sister disciplines.Less
This chapter synthesizes the findings presented in the book. It highlights the success in developing a methodology that can analyse satisfaction along the lines similar to those used by econometricians to analyse ‘objective’ variables. Future research should focus on developing methods that can estimate decision-utility functions for other domains. The relevance of the neoclassical equilibrium assumption is put into question. In line with the multi-disciplinary content of this text, the book stress the need for strengthening the collaboration with the sister disciplines.
Michio Morishima
- Published in print:
- 1963
- Published Online:
- November 2003
- ISBN:
- 9780198281450
- eISBN:
- 9780191596650
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198281455.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
This book brings together papers that were published by the author in several journals, and which have been revised and contain some new material. The main model carried through the whole book is ...
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This book brings together papers that were published by the author in several journals, and which have been revised and contain some new material. The main model carried through the whole book is Leontief's input–output system, which is dynamized from various points of view. Chapter 1 discusses formal similarities between the exchange equilibrium under weak gross substitutability and the static input–output system. Chapter 2 is concerned with the stability of the mixed Walras–Leontief system. Chapters 3 and 4 are companion chapters dealing with a mixture of the dynamic Leontief system and the Walrasian model of capital formation. Chapters 5 and 6 are devoted to an analysis of the von Neumann model of economic expansion, which may be considered as a variant of the dynamic Leontief system. Finally, an Appendix generalizes the classical theorems on non‐negative matrices to systems of non‐linear and homogeneous functions.Less
This book brings together papers that were published by the author in several journals, and which have been revised and contain some new material. The main model carried through the whole book is Leontief's input–output system, which is dynamized from various points of view. Chapter 1 discusses formal similarities between the exchange equilibrium under weak gross substitutability and the static input–output system. Chapter 2 is concerned with the stability of the mixed Walras–Leontief system. Chapters 3 and 4 are companion chapters dealing with a mixture of the dynamic Leontief system and the Walrasian model of capital formation. Chapters 5 and 6 are devoted to an analysis of the von Neumann model of economic expansion, which may be considered as a variant of the dynamic Leontief system. Finally, an Appendix generalizes the classical theorems on non‐negative matrices to systems of non‐linear and homogeneous functions.
Jerome L. Stein
- Published in print:
- 2006
- Published Online:
- May 2006
- ISBN:
- 9780199280575
- eISBN:
- 9780191603501
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199280576.003.0004
- Subject:
- Economics and Finance, Financial Economics
The NATREX is a model of the equilibrium real exchange rate, which is where the real exchange rate is heading. The NATREX model has two components: the long-run equilibrium real exchange rate and the ...
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The NATREX is a model of the equilibrium real exchange rate, which is where the real exchange rate is heading. The NATREX model has two components: the long-run equilibrium real exchange rate and the dynamics of adjustment of the medium-run equilibrium to the long-run equilibrium. In the medium-run equilibrium, the ratio of the external debt/GDP is predetermined, and the real exchange rate is associated with both internal and external balance. The real exchange rate and debt ratio are endogenous variables. In full stock-flow equilibrium, the long run equilibrium real exchange rate and external debt ratio depend upon the vector of time varying fundamentals, which are productivity and thrift in the country relative to the rest of the world.Less
The NATREX is a model of the equilibrium real exchange rate, which is where the real exchange rate is heading. The NATREX model has two components: the long-run equilibrium real exchange rate and the dynamics of adjustment of the medium-run equilibrium to the long-run equilibrium. In the medium-run equilibrium, the ratio of the external debt/GDP is predetermined, and the real exchange rate is associated with both internal and external balance. The real exchange rate and debt ratio are endogenous variables. In full stock-flow equilibrium, the long run equilibrium real exchange rate and external debt ratio depend upon the vector of time varying fundamentals, which are productivity and thrift in the country relative to the rest of the world.
Igor Aranson and Lev Tsimring
- Published in print:
- 2008
- Published Online:
- January 2009
- ISBN:
- 9780199534418
- eISBN:
- 9780191714665
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199534418.001.0001
- Subject:
- Physics, Condensed Matter Physics / Materials
This book is a systematic introduction to the new and rapidly evolving field of patterns in granular materials. Granular matter is usually defined as a collection of discrete macroscopic solid ...
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This book is a systematic introduction to the new and rapidly evolving field of patterns in granular materials. Granular matter is usually defined as a collection of discrete macroscopic solid particles (grains) with a typical size large enough that thermal fluctuations are negligible. Despite this seeming simplicity, properties of granular materials set them apart from conventional solids, liquids, and gases due to the dissipative and highly nonlinear nature of forces among grains. The last decade has seen an explosion of interest to nonequilibrium phenomena in granular matter among physicists, both on experimental and theoretical sides. Among these phenomena, one of the most intriguing is the ability of granular matter upon mechanical excitation to form highly ordered patterns of collective motion, such as ripples, avalanches, waves, or bands of segregated materials. This book combines a review of experiments with exposition of theoretical concepts and models introduced to understand the mechanisms of pattern formation in granular materials. The unique feature of this book is a strong effort to extend concepts and ideas developed in granular physics beyond the traditionally defined boundaries of the granular physics towards emergent fields, especially in biology, such as cytoskeleton dynamics, molecular motors transport, ordering of cells and other active (self-propelled) particles, dynamic self-assembly, etc.Less
This book is a systematic introduction to the new and rapidly evolving field of patterns in granular materials. Granular matter is usually defined as a collection of discrete macroscopic solid particles (grains) with a typical size large enough that thermal fluctuations are negligible. Despite this seeming simplicity, properties of granular materials set them apart from conventional solids, liquids, and gases due to the dissipative and highly nonlinear nature of forces among grains. The last decade has seen an explosion of interest to nonequilibrium phenomena in granular matter among physicists, both on experimental and theoretical sides. Among these phenomena, one of the most intriguing is the ability of granular matter upon mechanical excitation to form highly ordered patterns of collective motion, such as ripples, avalanches, waves, or bands of segregated materials. This book combines a review of experiments with exposition of theoretical concepts and models introduced to understand the mechanisms of pattern formation in granular materials. The unique feature of this book is a strong effort to extend concepts and ideas developed in granular physics beyond the traditionally defined boundaries of the granular physics towards emergent fields, especially in biology, such as cytoskeleton dynamics, molecular motors transport, ordering of cells and other active (self-propelled) particles, dynamic self-assembly, etc.
Jerome L. Stein and Polly Reynolds Allen
- Published in print:
- 1998
- Published Online:
- November 2003
- ISBN:
- 9780198293064
- eISBN:
- 9780191596940
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198293062.001.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics, International
The NATREX approach offers an alternative paradigm to the Purchasing Power Parity for equilibrium real exchange rates. NATREX is the acronym for NATural Real EXchange, referring to a medium‐run, ...
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The NATREX approach offers an alternative paradigm to the Purchasing Power Parity for equilibrium real exchange rates. NATREX is the acronym for NATural Real EXchange, referring to a medium‐run, inter‐cyclical equilibrium real exchange rate, determined by real, fundamental factors. Importantly, the NATREX is a moving equilibrium real exchange rate, responding to continual changes in exogenous and endogenous real fundamentals. In a world of high capital mobility, the fundamentals of thrift, productivity, capital intensity, and net debt to foreigners become particularly important, influencing desired long‐term capital flows and altering the equilibrium real exchange rate. The NATREX approach identifies and models the fundamental determinants of equilibrium real exchange rates, consistent with their recent empirical movements in various countries.The NATREX model is a dynamic stock‐flow growth model. The goal of the NATREX approach is primarily empirical – to explain movements of medium‐ to long‐run real exchange rates in terms of the fundamental real variables of thrift and productivity, assuming that real exchange rates do adjust toward their equilibrium level, although with a lag. A family of consistent general equilibrium models – of rational, optimizing behavior, determining medium‐run equilibrium real exchange rates – forms the core of the NATREX approach. These models provide logical economic justifications for the empirical results.Less
The NATREX approach offers an alternative paradigm to the Purchasing Power Parity for equilibrium real exchange rates. NATREX is the acronym for NATural Real EXchange, referring to a medium‐run, inter‐cyclical equilibrium real exchange rate, determined by real, fundamental factors. Importantly, the NATREX is a moving equilibrium real exchange rate, responding to continual changes in exogenous and endogenous real fundamentals. In a world of high capital mobility, the fundamentals of thrift, productivity, capital intensity, and net debt to foreigners become particularly important, influencing desired long‐term capital flows and altering the equilibrium real exchange rate. The NATREX approach identifies and models the fundamental determinants of equilibrium real exchange rates, consistent with their recent empirical movements in various countries.
The NATREX model is a dynamic stock‐flow growth model. The goal of the NATREX approach is primarily empirical – to explain movements of medium‐ to long‐run real exchange rates in terms of the fundamental real variables of thrift and productivity, assuming that real exchange rates do adjust toward their equilibrium level, although with a lag. A family of consistent general equilibrium models – of rational, optimizing behavior, determining medium‐run equilibrium real exchange rates – forms the core of the NATREX approach. These models provide logical economic justifications for the empirical results.
David M. Kreps
- Published in print:
- 1990
- Published Online:
- November 2003
- ISBN:
- 9780198283812
- eISBN:
- 9780191596568
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198283814.001.0001
- Subject:
- Economics and Finance, Microeconomics
Beginning in the early to the mid‐1970s, non‐cooperative game theory became an important tool of economics. This book is based on a series of lectures given at Oxford, and comments on this use of ...
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Beginning in the early to the mid‐1970s, non‐cooperative game theory became an important tool of economics. This book is based on a series of lectures given at Oxford, and comments on this use of non‐cooperative game theory. After providing a non‐technical introduction to the basic ideas of non‐cooperative game theory, the book discusses: (1) how and why game theory has been a success—because it permits economists to model and analyse situations of dynamic competition and where private information plays an important role; (2) how and why the theory has failed—to provide an understanding of when it (and equilibrium analysis) applies, when not, and what to do when not; and (3) how its weaknesses might be addressed—by considering individuals who are imperfectly rational and learn adaptively.Less
Beginning in the early to the mid‐1970s, non‐cooperative game theory became an important tool of economics. This book is based on a series of lectures given at Oxford, and comments on this use of non‐cooperative game theory. After providing a non‐technical introduction to the basic ideas of non‐cooperative game theory, the book discusses: (1) how and why game theory has been a success—because it permits economists to model and analyse situations of dynamic competition and where private information plays an important role; (2) how and why the theory has failed—to provide an understanding of when it (and equilibrium analysis) applies, when not, and what to do when not; and (3) how its weaknesses might be addressed—by considering individuals who are imperfectly rational and learn adaptively.
Jean J. Gabszewicz
- Published in print:
- 2000
- Published Online:
- November 2003
- ISBN:
- 9780198233411
- eISBN:
- 9780191596292
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198233418.001.0001
- Subject:
- Economics and Finance, Microeconomics
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual ...
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Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks.Imperfect competition is the paradigm that develops when, on the contrary, economic agents interact in a conscious manner, which is necessarily the case when competition takes place ‘among the few’. In this system, agents act strategically, taking into account the impact of their own decisions on competitors ‘behaviour and on the price mechanism. Such situations commonly arise when firms differentiate their products, erect strategic entry barriers, or exploit the imperfect information of their customers about the price or characteristics of their product.This book explores the theoretical richness of these economic contexts, using some basic concepts of game theory. The four assumptions underlying the paradigm of perfect competition (no barriers to entry, large number of agents, product homogeneity, and perfect information) constitute the natural departure points of the theories of imperfect competition: whenever at least one of these assumptions is violated, imperfect competition is present. The framework of the book is organized around the four corresponding themes: the role of collusion and entry barriers in the degree of market competition (Ch. 3), product differentiation (Ch. 4) and the information of agents as an instrument of competition (Ch. 5). Finally, Ch. 6 illustrates the possibility of extending the theory to a general equilibrium framework.Less
Perfect competition provides a model of a frictionless economy in which economic agents behave independently of each other, abandoning to the market the task of coordinating their individual decisions. This model is extensively studied in traditional price theory textbooks.
Imperfect competition is the paradigm that develops when, on the contrary, economic agents interact in a conscious manner, which is necessarily the case when competition takes place ‘among the few’. In this system, agents act strategically, taking into account the impact of their own decisions on competitors ‘behaviour and on the price mechanism. Such situations commonly arise when firms differentiate their products, erect strategic entry barriers, or exploit the imperfect information of their customers about the price or characteristics of their product.
This book explores the theoretical richness of these economic contexts, using some basic concepts of game theory. The four assumptions underlying the paradigm of perfect competition (no barriers to entry, large number of agents, product homogeneity, and perfect information) constitute the natural departure points of the theories of imperfect competition: whenever at least one of these assumptions is violated, imperfect competition is present. The framework of the book is organized around the four corresponding themes: the role of collusion and entry barriers in the degree of market competition (Ch. 3), product differentiation (Ch. 4) and the information of agents as an instrument of competition (Ch. 5). Finally, Ch. 6 illustrates the possibility of extending the theory to a general equilibrium framework.
Michio Morishima
- Published in print:
- 1969
- Published Online:
- November 2003
- ISBN:
- 9780198281641
- eISBN:
- 9780191596667
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198281641.001.0001
- Subject:
- Economics and Finance, Development, Growth, and Environmental
Discusses economic growth within the framework of the theory of equilibrium. Attempts on the one hand to resolve much of the controversy on growth that results from differences in assumptions made by ...
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Discusses economic growth within the framework of the theory of equilibrium. Attempts on the one hand to resolve much of the controversy on growth that results from differences in assumptions made by various authors and, on the other hand, to make a contribution to the theory of dynamic economics. Practical problems are not discussed, and the economy dealt with is isolated from foreign countries and is provided with a knowledge of industrial arts that does not change throughout the time horizon concerned. Factors such as public spending, foreign trade, technical improvement, and monetary policies are, therefore, ignored, even though they are usually important in determining the actual rate of economic growth. In the first half of the book, decisions regarding investment are made by private enterprises either in the neoclassical or Keynesian manner, while in the second half the planning authorities are responsible for directing firms so that they invest society's savings in such a way that the economy will progress along a path of efficient or optimal growth. The book is divided into four parts that discuss prototype models of economic growth, models resulting from the von Neumann model, models after the ‘von Neumann revolution’, and further model developments. An appendix is included on the von Neumann equilibrium, which aims at a clearer comprehension of Chs. 6 and 7.Less
Discusses economic growth within the framework of the theory of equilibrium. Attempts on the one hand to resolve much of the controversy on growth that results from differences in assumptions made by various authors and, on the other hand, to make a contribution to the theory of dynamic economics. Practical problems are not discussed, and the economy dealt with is isolated from foreign countries and is provided with a knowledge of industrial arts that does not change throughout the time horizon concerned. Factors such as public spending, foreign trade, technical improvement, and monetary policies are, therefore, ignored, even though they are usually important in determining the actual rate of economic growth. In the first half of the book, decisions regarding investment are made by private enterprises either in the neoclassical or Keynesian manner, while in the second half the planning authorities are responsible for directing firms so that they invest society's savings in such a way that the economy will progress along a path of efficient or optimal growth. The book is divided into four parts that discuss prototype models of economic growth, models resulting from the von Neumann model, models after the ‘von Neumann revolution’, and further model developments. An appendix is included on the von Neumann equilibrium, which aims at a clearer comprehension of Chs. 6 and 7.
Michael D. McDonald and Ian Budge
- Published in print:
- 2005
- Published Online:
- February 2006
- ISBN:
- 9780199286720
- eISBN:
- 9780191603327
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0199286728.003.0012
- Subject:
- Political Science, Comparative Politics
This chapter clinches the previous analysis by linking equilibria on both sides, (politics and policy) showing that they correspond closely. Broadly speaking, political preferences are transmitted ...
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This chapter clinches the previous analysis by linking equilibria on both sides, (politics and policy) showing that they correspond closely. Broadly speaking, political preferences are transmitted from median voter to median parliamentary party, from that to government, and then to ministries in the sequence postulated by the median mandate. This implies that under the froth and change of politics, certain stable processes continue, and these are in conformity with a median mandate interpretation of democratic processes.Less
This chapter clinches the previous analysis by linking equilibria on both sides, (politics and policy) showing that they correspond closely. Broadly speaking, political preferences are transmitted from median voter to median parliamentary party, from that to government, and then to ministries in the sequence postulated by the median mandate. This implies that under the froth and change of politics, certain stable processes continue, and these are in conformity with a median mandate interpretation of democratic processes.
W. M. Gorman
C. Blackorby and A. F. Shorrocks (eds)
- Published in print:
- 1996
- Published Online:
- November 2003
- ISBN:
- 9780198285212
- eISBN:
- 9780191596322
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198285213.003.0026
- Subject:
- Economics and Finance, Microeconomics
A weakness of the paper ’Aggregation in the short and long run’ (Ch. 25) is the use of strong convexity assumptions––these assumptions seem easier to justify in the short run, rather than the long ...
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A weakness of the paper ’Aggregation in the short and long run’ (Ch. 25) is the use of strong convexity assumptions––these assumptions seem easier to justify in the short run, rather than the long run. In this paper (which is from an unpublished typescript from Nuffield College, Oxford, 1982), all firms, actual and potential, have constant‐returns‐to‐scale technologies, hence, those that actually exist in any particular equilibrium are determined endogenously, but their outputs are of course undetermined; this is consistent with the structure of many general equilibrium models. Gorman begins by assuming that there is an input aggregate in each firm as well as in the economy as a whole; as in Ch. 25, this implies the existence of an output aggregate in each firm and in the economy. Equilibrium is characterized by zero profits and a finite production plan for every firm, and this in turn determines those firms that exist in the equilibrium. The main result is one seen in the previous aggregation papers: an aggregate exists if and only if it is deployed efficiently among those firms producing positive outputs.Less
A weakness of the paper ’Aggregation in the short and long run’ (Ch. 25) is the use of strong convexity assumptions––these assumptions seem easier to justify in the short run, rather than the long run. In this paper (which is from an unpublished typescript from Nuffield College, Oxford, 1982), all firms, actual and potential, have constant‐returns‐to‐scale technologies, hence, those that actually exist in any particular equilibrium are determined endogenously, but their outputs are of course undetermined; this is consistent with the structure of many general equilibrium models. Gorman begins by assuming that there is an input aggregate in each firm as well as in the economy as a whole; as in Ch. 25, this implies the existence of an output aggregate in each firm and in the economy. Equilibrium is characterized by zero profits and a finite production plan for every firm, and this in turn determines those firms that exist in the equilibrium. The main result is one seen in the previous aggregation papers: an aggregate exists if and only if it is deployed efficiently among those firms producing positive outputs.
Paul Weirich
- Published in print:
- 2010
- Published Online:
- September 2009
- ISBN:
- 9780195388381
- eISBN:
- 9780199866700
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195388381.001.0001
- Subject:
- Philosophy, Logic/Philosophy of Mathematics
A theory of collective rationality identifies collective acts that are evaluable for rationality and formulates principles for their evaluation. This book argues that a group's act is evaluable for ...
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A theory of collective rationality identifies collective acts that are evaluable for rationality and formulates principles for their evaluation. This book argues that a group's act is evaluable for rationality if it is the product of acts its members freely and fully control. It also argues that such an act is collectively rational if the acts of the group's members are rational. Efficiency is a goal of collective rationality, but not a requirement, except in cases where conditions are ideal for joint action and agents have rationally prepared for coordination. A theory of collective rationality also yields principles concerning solutions to games. One principle requires that a solution constitute an equilibrium among the incentives of the agents in the game. In a cooperative game some agents are coalitions of individuals, and it may be impossible for all agents to pursue all incentives. Because rationality is attainable, the appropriate equilibrium‐standard for cooperative games requires pursuit of an incentive only if it provides a sufficient reason to act. The book's theory of collective rationality supports an attainable equilibrium‐standard for solutions to cooperative games and shows that its realization follows from individuals' rational acts. This book's theory of collective rationality contributes to philosophical projects such as contractarian ethics and to practical projects such as the design of social institutions.Less
A theory of collective rationality identifies collective acts that are evaluable for rationality and formulates principles for their evaluation. This book argues that a group's act is evaluable for rationality if it is the product of acts its members freely and fully control. It also argues that such an act is collectively rational if the acts of the group's members are rational. Efficiency is a goal of collective rationality, but not a requirement, except in cases where conditions are ideal for joint action and agents have rationally prepared for coordination. A theory of collective rationality also yields principles concerning solutions to games. One principle requires that a solution constitute an equilibrium among the incentives of the agents in the game. In a cooperative game some agents are coalitions of individuals, and it may be impossible for all agents to pursue all incentives. Because rationality is attainable, the appropriate equilibrium‐standard for cooperative games requires pursuit of an incentive only if it provides a sufficient reason to act. The book's theory of collective rationality supports an attainable equilibrium‐standard for solutions to cooperative games and shows that its realization follows from individuals' rational acts. This book's theory of collective rationality contributes to philosophical projects such as contractarian ethics and to practical projects such as the design of social institutions.
Martine Quinzii
- Published in print:
- 1993
- Published Online:
- October 2011
- ISBN:
- 9780195065534
- eISBN:
- 9780199855063
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195065534.001.0001
- Subject:
- Economics and Finance, Financial Economics
Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the ...
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Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the traditional competitive theory of resource allocation. While most firms exhibit constant or decreasing returns to scale, some firms manufacture products whose technology permits increasing returns to scale that are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the United States, by regulated utilities. This book analyzes increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sectors, and the effects of financing the public sector on the redistribution of income.Less
Increasing returns to scale is an area in economics that is becoming more important in the literature. The economic phenomenon of increasing returns presents serious conceptual difficulties for the traditional competitive theory of resource allocation. While most firms exhibit constant or decreasing returns to scale, some firms manufacture products whose technology permits increasing returns to scale that are large relative to the market. These goods are an important component of economic activity in a modern economy and are typically commodities produced either by a public sector or, as in the United States, by regulated utilities. This book analyzes increasing returns using general equilibrium theory to take into account the interactions between production in the public and the private sectors, and the effects of financing the public sector on the redistribution of income.
