ESOP fabler: Equality, Social Organization and Performance

Time and place: Jun 12, 2010 13:00 PM - 06:00 PM, Auditorium 7, Eilert Sundts hus - the SV-building at Blindern

A research seminar on ESOP’s research topics and in celebration of Kalle Moene’s 60th birthday.

Speakers:

John Roemer - Professor of Political Science and Economics, Yale University

A Dynamic Analysis of Human Welfare in a Warming Planet

Abstract:

Climate science indicates that climate stabilization requires low GHG emissions. Is this consistent with non-decreasing human welfare?
Our welfare or utility index emphasizes education, knowledge, and the environment. We construct and calibrate a multigenerational model with intertemporal links provided by education, physical capital, knowledge and the environment.
We reject discounted utilitarianism and adopt, first, the Pure Sustainability Optimization (or Intergenerational Maximin) criterion, and, second, Sustainable Growth Optimization, that maximizes the utility of the first generation subject to a given future rate of growth. We apply these criteria to our calibrated model via a novel algorithm inspired by the turnpike property.
The computed paths yield levels of utility higher than the level at reference year 2000 for all generations. They require the doubling of the fraction of labor resources devoted to the creation of knowledge relative to the reference level, whereas the fractions of labor allocated to consumption and leisure are similar to the reference ones. On the other hand, higher growth rates require substantial increases in the fraction of labor devoted to education, together with moderate increases in the fractions of labor devoted to knowledge and the investment in physical capital.

Jean-Marie Baland - Professor of Economics, University of Namur

Repayment incentives and the design of microfinance institutions

Abstract:

Many microfinance institutions have recently shifted from group loans with joint-liability to contracts in which their clients are individually liable to repay their loans. This paper tries to explain this trend by building on the theoretical work on group lending. We examine the links between contractual structure, credit outreach and borrower welfare in a context where access to credit is limited by weak repayment incentives. We show that group loans are always smaller than individual loans in the absence of social sanctions. Social sanctions within groups can, under certain conditions, extend access to
credit among the poor, but benefits from group lending depend on project characteristics are decreasing in loan size. We also derive some comparative static results on group size and show that larger groups effectively pool risk when required loan sizes are small but may do worse than smaller groups as required loan sizes increase. Finally we examine the extent to which stronger social networks can substitute for bank enforcement and also consider the role of interest rate subsidies in increasing credit outreach and the welfare.

Torben Andersen - Professor of Economics, Aarhus University

Rationalizing the Co-existence of Public and Private Investments in Health

Abstract:

A Governmental intervention in health is prominent, enduring, and ubiquitous. And yet, health experts argue that“what people do with their lives [...] affects their health far more than anything governments can do. We study a two-period model in which young agents invest in their own health so as to reduce mortality risk and old-age morbidity. Assuming away the usual reasons for government involvement(such as, presence of externalities, market imperfections or distributional concerns), we attempt to rationalize optimal, tax-…nanced public investment in health that co-exists with the aforementioned private investment, even when the two forms of investment are perfect substitutes.

Gaute Torsvik - Professor of Economics, University of Bergen

Beliefs, attitudes and productivity. Evidence from a customer service centre.

Abstract:

In a survey we asked the workers at a customer service centre a battery of questions related to their motivation, preferred bonus schemes, career plans, workplace identification, recruitment etc. In this project we match the survey information with individual data on workplace behaviour; individual productivity, absenteeism etc. Combining this information enables us to address a number of questions: Do workers prefer incentive schemes that maximize their own income? Are team members more likely to favour a team bonus scheme if they work in a team with high variance in productivity? Are workers who report to be strongly identified with the firm more productive than workers who feel less connected? Are workers with a strong intrinsic work motivation more productive than those who say they are driven mainly by extrinsic (monetary) incentives?

Ragnar Torvik - Professor of Economics, Norwegian University of Science and Technology

Conditional Comparative Statics (joint with James A. Robinson)

Abstract:

Why was the Black Death followed by the decline of serfdom in Western Europe but its' intensification in Eastern Europe? What explains why involvement in Atlantic trade in the Early Modern period was positively correlated with economic growth in Britain but negatively correlated in Spain? Why did frontier expansion in the 19th Century Americas go along with economic growth in the United States and economic decline in Latin America? Why do natural resource booms seem to stimulate growth in some countries, but lead to a `curse' in others, and why does foreign aid sometimes seem to encourage, other times impede economic growth? In this paper we argue that the response of economies to shocks or innovations depends on the nature of institutions. When institutions are strong, new opportunities or windfalls can have positive effects. But when institutions are weak they can have negative effects. We present a simple theoretical framework to illustrate how comparative statics are conditional on the nature of institutions and show how this perspective helps to unify a large number of historical episodes and empirical studies.

 

Read more about the debate forum ESOP fabler here

Published May 21, 2010 12:28 PM - Last modified Jan. 18, 2019 1:22 PM