Journal Article A Note on “The Optimal Depletion of Exhaustible Resources” Get access Farhed A. Shah Farhed A. Shah University of Alberta Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 51, Issue 2, April 1984, Page 351, https://doi.org/10.2307/2297698 Published: 01 April 1984 Article history Received: 01 August 1983 Accepted: 01 October 1983 Published: 01 April 1984
This paper analyses a class of iterative planning procedures that can be applied in environments describable by the Leontief-Samuelson technology. Members of the class are distinguished by the extent of the communication of technical information from firms to the Centre. All members of the class are monotonic and convergent, but the speed and finiteness of convergence is shown to depend critically on the extent of the transfer of technical information throughout each procedure. The paper thus establishes a trade-off between the informational and performance properties of a class of resource allocation mechanisms, taking environmental coverage as given.
This paper provides a complete characterization of the welfare economics of employment contracts when workers are immobile in the ex post period. Necessary and sufficient conditions for constrained Pareto optimality are derived for economies with incomplete risk markets, two consumption goods and random production technologies in which: (a) workers can/cannot observe realizations of their employers ' revenue function (symmetric vs. asymmetric information), and in which; (b) employment contracts allow/preclude contingent wages and/or employment levels (flexible vs. rigid contracts). This taxonomic approach serves to identify the welfare implications of exogenous and endogenous contractual rigidities, and to isolate a class of externalities that is unique to economies with asymmetric information. The latter market failure is also present with "indexed " contracts when workers alone can observe realizations of their consumption goods prices (another form of asymmetric information). 1.
In this note we discuss necessary and sufficient conditions for dynamic path controllability, and show that the rank condition in Aoki (1975) is necessary but not sufficient unless impulse controls are admissible. It is demonstrated that in the special case of state space targets Tinbergen's concept of static controllability is equivalent to the dynamic concept of path controllability. For general linear systems conditions for path controllability depend on the choice of the admissible target and instrument space. In contrast to discrete-time models Tinbergen's original counting rule is necessary for path controllability for any target and instrument space in the continuous-time framework.
This paper analyses the transitory and long run effects of devaluation and tariffs, as well as the effects of alterations in the domestic money supply and the terms of trade, for a small country on fixed exchange rates. These issues are investigated in a self-contained dynamic optimization model of the sort popularized by Brock (1974, 1975). Familiar results in the trade literature are thereby explicated for the nonspecialist who is nonetheless familiar with Brock's work. There are some new results regarding the role played by income and substitution effects in determining the consequences of terms-of-trade shifts.
The paper considers the problem facing a consumer deciding whether to purchase a good whose effect on utility is unknown. The consumer is allowed to learn about the effect over time according to a Bayesian updating procedure. Of interest is the quantity of the good the consumer will purchase in the first period. The paper allows the consumer's budget constraint to be spread over more than one period and consequently generates results which contradicts earlier work.
In this paper we link two exchange rate literatures by showing how threats of asset controls yields determinate exchange rates in general equilibrium models with otherwise perfect capital markets and by showing how, for certain sequences of threats, exchange rate determination may be well explained by monetary variables. We find that in general there exists no natural exchange rate, and market rates may be sensitive to changed perceptions about future exchange rate intervention.
Properties are derived for the profit-maximizing price schedule in a market where the firm can observe the size of any given purchase, but cannot directly observe the number of purchases made by any given consumer. In such a market, A consumer may make multiple purchases to minimize the amount paid for a given quantity of the good. It is shown that when purchase numbers are unobservable the schedule may entail quantity premia and may be strikingly different from the schedule that obtains when the numbers of purchases are observable. In particular, some individuals may consume more under the profit-maximizing outcome than under the first-best outcome.
We study a simple model of the determination of the level of employment in which a capitalist decides how many workers to hire, and then bargains over the wage with those whom he hires. If the capitalist hires all the available workers, his position is weak since, in the event of a strike, he is unable to hire strike-breakers; for this reason he chooses to leave some workers ("involuntarily") unemployed. An increase in unemployment benefits which raises the cost of hiring strike-breakers affects the bargaining power of both capitalist and workers; under some conditions it leads to a reduction in unemployment. 1.
This paper develops a simple spatial equilibrium model of a city served by competing commuter railways and analyses the effects of different transportation policies on their pricing and investment decisions. It is shown that a system of competitive railway companies does not achieve the optimal allocation. We then examine whether or not three types of government intervention, i.e. subsidies to railway companies, a rate-of-return regulation, and the ownership of residential land by railway companies, can achieve the optimal allocation.