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Current Income (current + income)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting80%

Selected Abstracts

Identifying Welfare Effects from Subjective Questions

ECONOMICA, Issue 271 2001
Martin Ravallion
We argue that the welfare inferences drawn from answers to subjective,qualitative survey questions are clouded by concerns over the structure of measurement errors and how latent psychological factors influence observed respondent characteristics. We propose a panel data model that allows more robust tests and we estimate the model on a high-quality survey for Russia. We find significant income effects on an individual's subjective economic welfare. Demographic effects are weak at given income per capita. Ill-health and becoming unemployed lower welfare at given current income, although the unemployment effect is not robust, and returning to work does not restore welfare without an income gain. [source]

Government Spending and the Taylor Principle

JOURNAL OF MONEY, CREDIT AND BANKING, Issue 1 2009
GISLE JAMES NATVIK
public expenditures; Taylor principle; fiscal policy rules; rule-of-thumb consumers This paper explores how government size affects the scope for equilibrium indeterminacy in a New Keynesian economy, where part of the population live hand-to-mouth. The main result is that a higher level of public consumption is likely to generate indeterminacy and render the Taylor principle insufficient as criterion for equilibrium uniqueness. This holds even though fiscal policy serves to reduce swings in current income. Only if government consumption is a substitute for private consumption, will it narrow the scope for indeterminacy. Hence monetary policy should be conducted with an eye to the amount and composition of government consumption. [source]

CONSUMPTION AND GROWTH FROM A RICARDIAN PERSPECTIVE,

METROECONOMICA, Issue 4 2009
Nazim Kadri Ekinci
ABSTRACT A new way of imposing the Ricardian closure is proposed through a dynamic consumption function along Keynesian lines. The dynamic consumption function relates consumption to current income and to the accumulated stock of consumer durables. In this way the dynamics of consumption and effective demand become dependent on consumer spending on durables. Using the dynamic consumption function within a simplified Harrod,Domar growth framework, it is shown that there is no independent consumption function in the long run as the Ricardian closure implies. The long-run propensity to consume is an equilibrium relation, not a behavioural parameter. [source]

Implications of Endogenous Group Formation for Efficient Risk-Sharing

THE ECONOMIC JOURNAL, Issue 536 2009
Tessa Bold
The existing literature on sub-game perfect risk-sharing suffers from a basic inconsistency. While a group of size n is able to coordinate on a risk-sharing outcome, it is assumed that deviating subgroups cannot. I relax this assumption and characterise the optimal contract among all coalition-proof history-dependent contracts. This alters the predictions of the standard dynamic limited commitment model. I show that the consumption of constrained agents depends on both the history of shocks and its interaction with the current income of other constrained agents. From this, I derive a formal test for the presence of endogenous group formation under limited commitment. [source]

Testing for an economic gradient in health status using subjective data

HEALTH ECONOMICS, Issue 11 2008
Michael Lokshin
Abstract Can self-assessments of health reveal the true health differentials between ,rich' and ,poor'? The potential sources of bias include psychological adaptation to ill-health, socioeconomic covariates of health reporting errors and income measurement errors. We propose an estimation method to reduce the bias by isolating the component of self-assessed health that is explicable in terms of objective health indicators and allowing for broader dimensions of economic welfare than captured by current incomes. On applying our method to survey data for Russia we find a pronounced (nonlinear) economic gradient in health status that is not evident in the raw data. This is largely attributable to the health effects of age, education and location. Copyright © 2008 John Wiley & Sons, Ltd. [source]