THE DISTRIBUTION OF WEALTH AND THE EFFICIENCY OF INSTITUTIONS

This paper explores the efect on economic efficiency of the distribution of wealth and systems for enforcing property rights. We construct a two-person, two-period economy in which each person can consume, plant, transfer or steal corn. We find circumstances in which redistribution of wealth is Pareto optimal and in which increasing sanctions against theft to their maximum level is not. These results suggest that it is not only important to consider distribution in the design of property institutions, but also that redistribution itself may serve to increase the efficiency of systems of property rights.     

TIME PREFERENCE AND THE DISTRIBUTIONS OF WEALTH AND INCOME

This paper examines the connection between time preference heterogeneity and economic inequality in a deterministic environment. Specifically, we extend the standard neoclassical growth model to allow for (1) heterogeneity in consumers' discount rates, (2) direct preferences for wealth, and (3) human capital formation. The second feature prevents the wealth distribution from collapsing into a degenerate distribution. The third feature generates a strong positive correlation between earnings and capital income across consumers. A calibrated version of the model is able to generate patterns of wealth and income inequality that are very similar to those observed in the United States. (JEL D31, E21, O15)     

THE GROWTH OF THE FEDERAL DEFICIT AND THE ROLE OF PUBLIC ATTITUDES

How can the recent explosion in the fiscal deficit of the UnitedStates be reconciled with the well-known support of the Americanpublic for fiscal conservatism? It is first shown that the reputationfor fiscal conservatism is fully supported by public opinionpolls dating back over a period of four decades. Solid majoritieshave consistently opposed tax reductions that might producean unbalanced budget. Recently, however, the public has alsoshown strong opposition to increases in taxes to close the fiscalgap, which might appear to imply a new acquiescence to the deficit.But this opposition, too, is shown to have persisted for a longtime and to be not logically inconsistent with rejecting taxcuts resulting in deficit. Another fashionable explanation forthe deficit holds that the budget process in a democratic societyis biased toward deficit because the cost of higher taxes isimmediate while the cost of deficit is delayed. But it is inconsistentwith the fiscal history of the United States over the last 100years, which reveals no systematic bias toward deficits, atleast until recent years. The major explanation that emergesis that the administration succeeded in misleading the public(and perhaps even itself) into believing that the tax cut wouldnot result in deficit thanks to "supply" and "Laffer curve"effects.     

PUBLIC INFRASTRUCTURE MAINTENANCE AND THE DISTRIBUTION OF WEALTH

When considering how to allocate scarce resources for the development of public infrastructure, many countries have a tendency to neglect maintenance in favor of new infrastructure investment projects. We examine the role of maintenance expenditures on output and on the distribution of wealth in a heterogeneous agents model. In our model, maintenance affects the quality of existing infrastructure and thus the flow of services derived from it. Furthermore, maintenance expenditures also affect the depreciation rates of both public infrastructure and private capital. We calibrate our model to Mexico and consider several policies that increase the flow of resources to infrastructure and find that a policy that allocates all additional resources to new investment is dominated by policies that allocate at least some of the additional resources to maintenance. Specifically, focusing all additional resources on maintenance is shown to generate the largest reduction in inequality, while a more balanced policy that increases both investment and maintenance maximizes output growth. (JEL E00, E62, H54)     

INFORMATION WARFARE AND THE FUTURE OF THE SPY

This article examines the impact of the new ICTs on the collection of covert intelligence and covert political actions undertaken by national intelligence agencies. It is argued that there exist two distinct doctrines in the literatures of intelligence and information warfare concerning the future relative importance of information from human sources ('agents') and technical methods (signal interception, overhead imagery and the emerging field of clandestine penetration of networked information systems). The arguments in favour of human and technical methods are examined in the context of information warfare techniques and technologies, as are covert action methods such as disinformation, disruptive action and 'cyber-sabotage'. Certain civil liberties implications of ICT-based strong encryption are also examined. The article concludes that what is required is a greater emphasis on integrating human and technical methods into a unified whole, especially where human methods can provide opportunities which can be further exploited by technical methods.     

POSTMODERNISM, POSTINDUSTRIALISM, AND THE FUTURE

In order to describe the main features of future American society, the main changes already occurring are discussed, a theory is formulated that explains these changes, and this theory is applied to the future. Three well-known theories are used as a starting point: Habermas's theory of systems, his theory of lifeworlds, and general conflict theory. To account for a variety of systems, a theory of the "organizing" process is proposed. To explain the trans-formation of lifeworlds, a simplified theory of the "communicative" process is outlined. To gain insight into cultural change, the theory of "oppositional" process is presented. The main conclusions are that we are witnessing a shift from "system" to "lifeworld" and that both postindustrial structures and postmodern culture contribute to and are symptoms of this shift. Moreover, future American societies, shaped by this shift, will have many properties of the preindustrial gemeinschafts.     

国内企业艺术品收藏优缺及未来走向

近几年,国内越来越多的企业和机构开始介入艺术品收藏和投资领域,机构收藏对国内艺术品市场甚至艺术生态的影响已经显现,不少业内人士均表示,由“散户市”走向“机构市”是国内艺术品市场未来的趋势,也是市场正规化、专业化的表现。     

ALTRUISM, MATCHING, AND NONMARKET INSURANCE

Incomplete market insurance gives rise to nonmarket arrangements for coinsurance. We find that the effort altruistically linked individuals take to avoid an accident increases with the degree of altruism. If the degree of altruism is sufficiently high, an economy with nonmarket insurance yields higher social welfare than an economy without nonmarket insurance. As altruism increases, the equilibrium level of effort approaches the second-best solution without the need for costly monitoring. Coinsurance is above (below) the socially optimal level if individuals place greater weight (less weight) on their own utility than on that of their partners.     

THE WELFARE COSTS OF DEFICIT FINANCE

We analyze the welfare consequences of deficit finance in a general equilibrium model fit to the US. economy. Current spending may be financed with current and/or future distortionary taxes. The economy is open to international capital flows. The welfare costs of financing marginal current spending are substantial and are sensitive to the timing of the required taxes; postponing a tax on labor income is advantageous but postponing a tax on asset income is not. Ricardian equivalence poorly approximates the economy we consider.     

INTERNATIONAL TAX COMPETITION AND THE DEFICIT BIAS

I analyze the dynamic effects of tax competition on public budget deficits. I find that stronger tax competition leads to a fiscal deficit bias at the early stages of financial liberalization. When countries differ in terms of capital mobility, further liberalization leads to external imbalances and diverging fiscal deficits while corporate tax rates converge. Consistent with theory, I find that stronger tax competition increases deficits in a sample of OECD countries, controlling for tax revenues and other standard determinants of fiscal deficits. (JEL E62, F62)     

TECHNOLOGY AND THE FUTURE OF THE UNIVERSITY: A SOBER VIEW

Technology has had considerable impact on education and the university, but the Internet - today's newest technology - will not lead to the death of the university. While there is clearly a role for virtual education over the Internet, the conventional university will survive since students are well served by a real, physical, educational experience.     

ANTITRUST POLICY AND MERGERS: THE WEALTH EFFECT OF SUPREME COURT DECISIONS

Many believe that antitrust policy has had a dramatic impact on merger strategies in the United States. For this to be true, enforcement of antitrust laws must affect a wide range of firms, not just those firms whose mergers are contested. This study tests whether or not firms engaged in uncontested mergers are affected by antitrust enforcement, as signalled by Supreme Court decisions. Using event study methodology, we find that antitrust policy against mergers was binding during the 1960s and 1970s as it ulowered the value of targets in ucontested ongoing mergers.     

CONSUMPTION, WEALTH, AND FINITE HORIZONS: TESTS OF RICARDIAN EQUIVALENCE

We find strongly non-Ricardian results when we re-estimate Evans's [1988] model using a better approximation of the market value of wealth. We also examine the long-run properties of the data and find results consistent with our regression evidence when we allow for declining labor income as modeled by Gali (1990]. Our findings in support of non-Ricardian behavior by consumers stand in sharp contrast to those of both Evans and Gali.     

DEADWEIGHT LOSSES AND THE SAVING RESPONSE TO A DEFICIT

Several recent empirical studies have challenged the conventional wisdom that deficits cause a higher interest rate. Many economists are, however, critical of the seemingly implied theoretical justification—that every individual fully recognizes the size of the deficit and the extent to which it increases future tax liabilities. This paper demonstrates that far weaker information assumptions are needed to obtain an aggregate savings response equal to the deficit: a reallocation of deadweight losses causes Ricardians to save more than their share of the deficit to keep consumption unaffected, allowing for a substantial fraction of Keynesians who save less than their share.     

THEORIES OF COMMITMENT, ALTRUISM AND RECIPROCITY: EVIDENCE FROM LINEAR PUBLIC GOODS GAMES

Theories of commitment, altruism, and reciprocity have been invoked to explain and describe behavior in public goods and social dilemma situations. Commitment has been used to explain behaviors like water conservation and voting. Altruism has been applied to explain contributions to charities and intergenerational transfers and bequests. Reciprocity has been invoked to explain gift exchange and labor market decisions. This paper describes a set of experiments, which distinguish between these competing theories by testing their comparative statics predictions in a linear public goods setting. Results provide strong support for reciprocity theories over either theories of commitment or of altruism. ( JEL C9, D64, H41, C72)