Otto Schmidt Verlag,
Overlapping generations model Diamond extended the Ramsey—Cass—Koopmans modelwith a representative infinitely-lived agentto a setup where new individuals are continually being born and old individuals are continually dying.
He built on a framework developed by Paul Samuelsonwho had termed it "an exact consumption-loan model. One of the main results of this paper is that the decentralized equilibrium might be dynamically Pareto efficient even though it is ex ante inefficient.
It is characterised by 7 assumptions: Under these assumptions, it can be shown that the second best allocation requires production efficiency to be preserved throughout the economy. This result arises from the assumptions that characterise the DM world: The production side of the economy is independent from the consumption side of the economy assumption i and ii: This means that the income of consumers do not depend on the producer prices.
Again, this is an application of the theory of the second best: Pareto efficiency should be restored in independent markets. The economy is not able to operate in a first-best world assumption iii and iv: Note, this is the only irremovable distortion in the DM world.
The government has a full instrument set that allows any configuration of prices to be achieved, which allows the government to bring about any configuration of relative consumer prices that is consistent with the revenue requirement. The key idea is that when the government can control all consumer prices, the producer prices are independent from the consumer prices and the consumption decision part of the optimal taxation problem becomes independent of the production decision.
Another implication is that public and private sector production should be based on the same relative prices. In practice, one needs to consider if the assumptions of the DM world are likely to apply; nevertheless, the efficiency result is a useful benchmark against which to judge whether any policy violation of production efficiency is justified.
Labor market search and match[ edit ] Diamond is one of the first papers which explicitly models the search process involved in making trades and hiring workers, which results in equilibrium unemployment. Social Security policy[ edit ] Diamond has focused much of his professional career on the analysis of U.
Social Security policy as well as its analogs in other countries, such as China.
In numerous journal articles and books, he has presented analyses of social welfare programs in general and the American Social Security Administration in particular.
He has frequently proposed policy adjustments, such as incremental but small increases in social security contributions using actuarial tables to adjust for changes in life expectancy and an increase in the proportion of earnings that are subject to taxation.Introduction to Labor Markets We have already studied how the market functions when buyers and sellers are dealing with goods and services: firms supply goods and services in response to the equilibrium price, and households buy these goods and services in response to the equilibrium price.
Demographic analysis includes the things that allow us to measure the dimensions and dynamics of populations. These methods have primarily been developed to study human populations, but are extended to a variety of areas where researchers want to know how populations of social actors can change across time through processes of birth, death, .
It is fashionable these days for bourgeois economists and sociologists to refute the dialectical materialist method of analysis developed by Karl Marx.
One of the basic ideas of Karl Marx that is constantly being denied by the bourgeois is his theory of v. One Method of Calculating Labor Values. Twenty eight tons of the produced iron can be used to replace the iron input into this production process, leaving a surplus of 28 tons.
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Autumn Quarter ; Winter Quarter ; T HIST Introduction to History Methods (5) I&S Introduces students to historians' methods for researching and writing, including Chicago style, with a focus on formulating, researching, and writing a history .
1. Introduction. As more business is conducted cross-border and globally, there is a growing demand for translations of business and commercial laws.