Bökemeier / Greiner Inequality and Finance in Macrodynamics

1. Auflage 2017
ISBN: 978-3-319-54690-2
Verlag: Springer Nature Switzerland
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, Band 23, 278 Seiten

Reihe: Dynamic Modeling and Econometrics in Economics and Finance

This contributed volume combines approaches of the current inequality debate with aspects of finance based on profound macroeconomic model analyses. Research on inequality has had a long tradition in economics. With the financial crisis from 2007, not only output decreased tremendously, but also inequality has risen since then. The book presents selected contributions of a workshop held at Bielefeld University in 2016 and features additional papers written by experts in the field. A mixture of established researchers and young scholars presents both theoretical and empirical frameworks to analyze the subject. 

Autoren/Hrsg.

Bökemeier, Bettina

Greiner, Alfred

Inhaltsverzeichnis

1;Preface;6
2;Contents;9
3;Contributors;11
4;Inequality in Germany and the US: An Introductory Note;13
4.1;1 Introduction;13
4.2;2 Some Data;14
4.2.1;2.1 Income Inequality;15
4.2.2;2.2 Wealth Inequality;16
4.3;3 Conclusion;17
4.4;References;18
5;Assessing Public Spending Efficiency in 20 OECD Countries;19
5.1;1 Introduction;19
5.2;2 Literature;21
5.3;3 Methodology and Data;22
5.3.1;3.1 Public Sector Performance (PSE);22
5.3.2;3.2 Public Sector Efficiency;25
5.3.3;3.3 Data Envelopment Analysis (DEA);25
5.4;4 Empirical Analysis;27
5.4.1;4.1 Public Sector Performance;27
5.4.2;4.2 Public Sector Efficiency (PSE);29
5.4.3;4.3 Data Envelopment Analysis (DEA);29
5.5;5 Conclusion;37
5.6;Appendix;38
5.7;References;54
6;Government Debt, Fiscal Rules and Singular Growth Dynamics;55
6.1;1 Introduction;55
6.2;2 The Model;58
6.2.1;2.1 Endogenous Debt Adjustment;60
6.2.2;2.2 The DGE in Detrended Variables;62
6.3;3 Local Analysis;65
6.3.1;3.1 Impasse-Surface;65
6.3.2;3.2 Balanced Growth Paths and Local Dynamics;72
6.4;4 Equilibrium Dynamics;75
6.4.1;4.1 Multiple Over-Determined BGP's;76
6.4.2;4.2 Determinate BGP's;77
6.5;5 Conclusion;80
6.6;Appendix: Proofs;81
6.7;References;86
7;Financial Liberalization, Inequality and Inclusion in Low-Income Countries;87
7.1;1 Introduction;87
7.2;2 Literature Review;88
7.3;3 Data Description;89
7.3.1;3.1 Measuring Income Inequality;89
7.3.2;3.2 Measuring Capital Account Openness;92
7.3.3;3.3 Identification Strategy;93
7.4;4 Methodology;93
7.4.1;4.1 The Baseline;93
7.4.2;4.2 Mechanisms: Financial Development and Inclusion;95
7.5;5 Results;97
7.5.1;5.1 The Baseline;97
7.5.1.1;5.1.1 Baseline Results;97
7.5.1.2;5.1.2 Robustness Check with Local Projection Method;98
7.5.1.3;5.1.3 Difference Between Equity, Bond and FDI Liberalization;100
7.5.2;5.2 Mechanisms: Financial Development and Inclusion;101
7.6;6 Conclusion;103
7.7;Appendix: Data Appendix;104
7.7.1;Current Account Openness Index;104
7.7.2;Regulation Reform;104
7.7.3;Macroeconomic Variables;105
7.7.4;Redistributive Policies;105
7.7.5;Credit Market Freedom Indicator;105
7.7.6;Financial Inclusion;106
7.8;References;106
8;On (Non-)Neutrality of Public Debt in Growing Economies;108
8.1;1 Introduction;108
8.2;2 The Growth Model with Flexible Wages and Elastic Labour Supply;110
8.2.1;2.1 Model Structure;110
8.2.1.1;2.1.1 The Household;110
8.2.1.2;2.1.2 The Productive Sector;112
8.2.1.3;2.1.3 The Government;112
8.2.1.4;2.1.4 Equilibrium Conditions and the Balanced Growth Path;113
8.2.2;2.2 Analysis of the Model;114
8.3;3 The Model with Wage Rigidity;117
8.3.1;3.1 The Model Setup;118
8.3.1.1;3.1.1 The Household Sector;118
8.3.1.2;3.1.2 The Productive Sector and the Labor Market;118
8.3.1.3;3.1.3 The Government;119
8.3.1.4;3.1.4 Equilibrium Conditions and Balanced Growth;120
8.4;4 Analysis of the Model;121
8.5;5 Conclusion;123
8.6;Appendix;124
8.6.1;Proof of Proposition 1;124
8.6.2;Proof of Proposition 2;124
8.6.3;Proof of Lemma 7;125
8.6.4;Proof of Proposition 3;125
8.6.5;Proof of Proposition 4;127
8.6.6;Proof of Proposition 5;128
8.6.7;Proof of Proposition 6;128
8.7;References;130
9;Financial Intermediation and Directed Technical Change;131
9.1;1 Introduction;131
9.2;2 The Model;133
9.2.1;2.1 The Economy;133
9.2.2;2.2 Production Sectors;134
9.2.2.1;2.2.1 Final Output;134
9.2.2.2;2.2.2 Intermediate Production;134
9.2.2.3;2.2.3 Capital Goods Production and Innovations;135
9.2.3;2.3 Heterogeneous Consumers;136
9.2.3.1;2.3.1 Workers;136
9.2.3.2;2.3.2 Innovators;137
9.2.3.3;2.3.3 Entrepreneurs;137
9.2.4;2.4 Banking Sector;138
9.2.5;2.5 Aggregation;138
9.3;3 The Decentralized Equilibrium;140
9.3.1;3.1 Producer Behavior;141
9.3.1.1;3.1.1 Final Output;141
9.3.1.2;3.1.2 Intermediate Output;141
9.3.1.3;3.1.3 Capital Goods Production;142
9.3.2;3.2 Consumer Behavior;145
9.3.3;3.3 Banking Behavior;146
9.3.4;3.4 Market Clearing;146
9.3.4.1;3.4.1 Capital Markets;146
9.3.4.2;3.4.2 Factor Markets;147
9.3.4.3;3.4.3 Goods Markets;147
9.3.5;3.5 Equilibrium;148
9.4;4 Determinants of Directed Technical Change;151
9.4.1;4.1 The Demand for Innovations;151
9.4.2;4.2 The Supply of Innovations;156
9.5;5 Properties of the Balanced Growth Path Equilibrium;158
9.6;6 Conclusions;162
9.7;Appendix: Mathematical Appendix;163
9.7.1;Proof of Lemma 1;163
9.7.2;Derivation of ?? (Eq.(76));164
9.7.3;Proof of Lemma 2;164
9.7.4;Proof of Lemma 3;166
9.8;References;166
10;Sustainability of Public Debt in an AK Model with Complex Tax System;168
10.1;1 Introduction;168
10.2;2 Model;170
10.2.1;2.1 Household;170
10.2.2;2.2 Firms;171
10.2.3;2.3 Government;172
10.2.4;2.4 Market Clearing Conditions;173
10.3;3 Equilibrium;173
10.3.1;3.1 Equilibrium Path;173
10.3.2;3.2 Balanced Growth Path;175
10.4;4 Sustainability of Public Debt;177
10.4.1;4.1 Critical Level of Public Debt-to-GDP Ratio;178
10.4.2;4.2 Marginal Rates of Substitution of the Tax Rates;179
10.4.3;4.3 Required Tax Rates for the Sustainability of the Public Debt;181
10.4.4;4.4 Numerical Example;182
10.5;5 Conclusion;184
10.6;References;184
11;Demographic Change and the Rates of Return to Risky Capital and Safe Debt;186
11.1;1 Introduction;186
11.2;2 The Model;187
11.2.1;2.1 Government Debt;188
11.2.2;2.2 Households;189
11.2.2.1;2.2.1 Equilibrium;190
11.2.3;2.3 Baby Boom and Equity Premium;191
11.3;3 Extensions;192
11.3.1;3.1 The Effect of Human Capital;192
11.3.2;3.2 Portfolio Choice;194
11.4;4 Discussion;197
11.5;5 Conclusion;198
11.6;References;198
12;Financing Sustainable Growth Through Energy Exports and Implications for Human Capital Investment;200
12.1;1 Introduction;200
12.2;2 Historical and Statistical Facts;205
12.3;3 Basic Model of a Closed Economy and Its Solution;208
12.4;4 Open Economy Model with Resources and Its Solutions;211
12.4.1;4.1 Theoretical Model;211
12.4.2;4.2 Numerical Solution of the Open Economy Model;213
12.5;5 Open Economy Model with Human Capital and Its Solutions;217
12.5.1;5.1 Theoretical Model;217
12.5.2;5.2 Numerical Solutions;217
12.6;6 Conclusion;219
12.7;Appendix 1;220
12.8;Appendix 2;221
12.9;Appendix 3;222
12.10;Appendix 4;223
12.11;References;225
13;Macroeconomic Risk, Fiscal Policy Rules and Aggregate Volatility in Asymmetric Currency Unions: A Behavioral Perspective;229
13.1;1 Introduction;229
13.2;2 The Model;231
13.2.1;2.1 Households;232
13.2.2;2.2 Firms;233
13.2.3;2.3 Monetary Authorities;233
13.2.4;2.4 Fiscal Authorities;234
13.2.5;2.5 Sovereign Risk;235
13.2.6;2.6 Market Clearing and External Imbalances;237
13.3;3 Model Analysis;238
13.3.1;3.1 Transmission Mechanisms and Dynamic Adjustments;239
13.3.2;3.2 Debt Stabilization Policy and Its Effect on the Macroeconomic Stability;241
13.3.3;3.3 Adjustment Volatility Under Alternative Sovereign Risk Perceptions and Fiscal Policy Rules;242
13.3.3.1;3.3.1 Scenario 1: Consensus Between Government and Markets About Sovereign Debt as the Main Determinant of Sovereign Risk;243
13.3.3.2;3.3.2 Scenario 2: Disagreement About the Main Determinant of Sovereign Risk (Government: Sovereign Debt, Markets: Output Gap);244
13.3.3.3;3.3.3 Scenario 3: Consensus Between Government and Markets About the Output Gap as the Main Determinant of Sovereign Risk;245
13.3.3.4;3.3.4 Scenario 4: Disagreement About the Main Determinant of Sovereign Risk (Government: Sovereign Debt, Markets: Country Bond Spread);246
13.4;4 Concluding Remarks;247
13.5;References;249
14;Asset Accumulation with Heterogeneous Households: The Rise of Wealth Disparity;251
14.1;1 Introduction;251
14.2;2 A Model with Heterogeneous Households;254
14.2.1;2.1 High Net Worth Households;255
14.2.2;2.2 Low Net Worth Households;258
14.2.3;2.3 Wealth Distribution;261
14.3;3 Empirical Trends;261
14.3.1;3.1 Data Sources, Methodology and Measures;261
14.3.2;3.2 Distribution of Net Wealth;265
14.3.3;3.3 Income Brackets and Income Sources;268
14.3.4;3.4 Life Cycle Aspects of Income and Wealth;271
14.3.5;3.5 Capital Income Trends;274
14.4;4 Private Wealth and Public Policies;275
14.5;5 Conclusions;276
14.6;References;277