Karl Shell - Profile on Academia.edu (original) (raw)
Papers by Karl Shell
Hamiltonians
Palgrave Macmillan UK eBooks, 2008
Announcement
Journal of Economic Theory, 2013
Mathematical Methods in Investment and Finance
Journal of Finance, Jun 1, 1974
ABSTRACT
Essays on the Theory of Optimal Economic Growth
The Economic Journal, Sep 1, 1968
Public Investment, The Rate of Return, and Optimal Fiscal Policy
Journal of Finance, Sep 1, 1971
ABSTRACT
Hamiltonians
Palgrave Macmillan UK eBooks, 2018
RePEc: Research Papers in Economics, Dec 11, 2009
We investigate sunspot equilibria in a static, one-commodity model with taxes and transfers denom... more We investigate sunspot equilibria in a static, one-commodity model with taxes and transfers denominated in money units. Volatility in this economy is purely monetary, since the only uncertainty is about the price level. We construct simple, robust examples of sunspot equilibria that are not mere randomizations over certainty equilibria. We also identify the source of these SSEs: Equilibrium in the securities market is determined as if there were no restricted consumers and the unrestricted consumers face intrinsic uncertainty. Perfect securities markets eliminate allocation uncertainty, but they exacerbate price-level volatility.
Journal of Political Economy, Jul 1, 1969
18. Neoclassical Growth Models
University of Pennsylvania Press eBooks, Dec 31, 1977
Economic Theory, Econometrics, and Mathematical Economics
Elsevier eBooks, 1993
Journal of Economic Theory, Sep 1, 2008
In a general-equilibrium economy with nonconvexities, there are sunspot equilibria with good welf... more In a general-equilibrium economy with nonconvexities, there are sunspot equilibria with good welfare properties; sunspots can ameliorate the effects of the nonconvexities. For these economies, we show that agents act as if they have quasi-linear utility functions. We use this result to construct a new model of monetary exchange along the lines of Lagos and Wright, where trade occurs in both centralized and decentralized markets, but instead of quasi-linear preferences we assume general preferences but with indivisible labor. This suggests that modern monetary theory is more robust than one might have thought. It also constitutes progress on the classic problem of integrating monetary economics and general-equilibrium theory.
Elsevier eBooks, 1972
Naturally, the line (or hyoerplane) (2.5) is tangent to the PPF at x. Suppose that there is no ch... more Naturally, the line (or hyoerplane) (2.5) is tangent to the PPF at x. Suppose that there is no change in either technology or the proportions in which factor endowments occur, so that the PPM and the function j) (x) are unchanged. Suppose further that output then moves to a different point, x , on the SMe^PPF (u = 1) as x. This occurs because prices have shifted from v> to p p .
Journal of Economic Theory, Oct 1, 1969
Colloquium on Applications of Mathematics to Economics (Budapest, 1963)
Journal of the American Statistical Association, Jun 1, 1967
Growth Dynamics and Returns to Scale: Bifurcation Analysis
Social Science Research Network, Sep 7, 1999
ABSTRACT We analyze how the dynamic behavior of an endogenous growth model depends on the degree ... more ABSTRACT We analyze how the dynamic behavior of an endogenous growth model depends on the degree of returns to scale in production. We study a simple model of inventive activity and demonstrate that the case of constant returns to the set of reproducible factors of production (the most commonly studied case in the literature on endogenous growth) is a bifurcation point in parameter space. This bifurcation occurs on the boundary of the state space, making it dicult to analyze formally. For a special case of the model, we provide a transformation that allows us to classify the bifurcation as transcritical using standard methods. We discuss the types of new methods that will be needed to formally classify this bifurcation in a broader class of models. We thank Jess Benhabib, Guido Cozzi, Tapan Mitra, John Nachbar, Kazuo Nishimura, Steve Strogatz, and two anonymous referees for many helpful comments. We are especially indebted to John Guckenheimer and Jan Wenzelburger for useful discus...
International Journal of Economic Theory, Jan 2, 2019
We analyze the pre-deposit game in a two-depositor banking model. The Glass-Steagall bank is assu... more We analyze the pre-deposit game in a two-depositor banking model. The Glass-Steagall bank is assumed to be restricted to holding only liquid assets. Depositors tolerate a panic-based run if its probability of occurrence s is small. How s affects the allocation of assets depends on the incentive compatibility constraint (ICC). When the ICC is not binding, the sunspot allocation is not a mere randomization over the run and non-run outcomes under the so-called "optimal contract." We offer this paper as a contribution to both the literature on banking and financial fragility and also the broader literature on sunspot equilibrium.
The Costs of Economic Growth
Journal of Finance, Jun 1, 1969
First published in 1967, "The Costs of Economic Growth" was based on the central convic... more First published in 1967, "The Costs of Economic Growth" was based on the central conviction that the official figures for growth in real income were entirely compatible with a decline in human welfare. Twenty-five years later, "The Costs of Economic Growth" remains one of the most persuasive and systematic demolitions of the religion of growth yet published, its arguments only reinforced by the growing social and environmental problems of the late 20th century. For this new major edition the text has been revised and updated in the light of recent global perils and environmetal degradation.
On Optimal Taxation with Costl Administration
The American Economic Review, 2016
In adopting a set of taxes, governments are influenced by the relative costs of ad-ministering an... more In adopting a set of taxes, governments are influenced by the relative costs of ad-ministering and enforcing each kind of tax. Similarly, costs of compliance and trans-actions for households and firms depend on the mix of taxes used. Yet, in previous studies of optimal taxation (e.g., Peter Diamond and James Mirrlees), adminis-tration and transaction costs play no role in the determination of government tax policy. We offer here a first attempt at incorporating these important costs ' into a formal model of optimal taxation.2 In what follows, the class of tax instruments to be used is endogenously determined by an
Macroeconomic Dynamics, Jun 7, 2018
We analyze in some detail the full pre-deposit game in a simple, tractable, yet very rich, bankin... more We analyze in some detail the full pre-deposit game in a simple, tractable, yet very rich, banking environment. How does run-risk a¤ect the optimal deposit contract? If there is a run equilibrium in the post-deposit game, then the optimal contract in the pre-deposit game tolerates small-probability runs. However, this does not mean that small changes in run-risk are ignored. In some cases, the optimal contract becomes-as one would expect-strictly more conservative as the run-probability increases (until it switches to the best run-proof contract), and the equilibrium allocation is not a mere randomization over the equilibrium allocations from the post-deposit game. In other cases, the allocation is a mere randomization over the equilibria from the post-deposit game. In the …rst cases (the more intuitive cases), the incentive constraint does not bind. In the second cases, the incentive constraint does bind.
Journal of Economic Theory, Sep 1, 2000
In overlapping-generations economies with perfect¯nancial markets and lumpsum taxation, restricti... more In overlapping-generations economies with perfect¯nancial markets and lumpsum taxation, restrictions on the government budget de¯cits do not limit the set of achievable allocations. For economies in which tax instruments are distortionary and limited in number, de¯cits are irrelevant only in the unrealistic case in which the number of tax instruments is large relative to the number of policy goals. In particular, if the government can use only anonymous consumption taxes, then achieving the prescribed de¯cits without changing the equilibrium allocation will typically be impossible when the number of consumers exceeds the number of commodities. A similar result holds if consumer credit is (exogenously) restricted. Surprisingly, in this case, distortionary taxes may be more likely than lump-sum taxes to lead to the irrelevance of government de¯cits.
Hamiltonians
Palgrave Macmillan UK eBooks, 2008
Announcement
Journal of Economic Theory, 2013
Mathematical Methods in Investment and Finance
Journal of Finance, Jun 1, 1974
ABSTRACT
Essays on the Theory of Optimal Economic Growth
The Economic Journal, Sep 1, 1968
Public Investment, The Rate of Return, and Optimal Fiscal Policy
Journal of Finance, Sep 1, 1971
ABSTRACT
Hamiltonians
Palgrave Macmillan UK eBooks, 2018
RePEc: Research Papers in Economics, Dec 11, 2009
We investigate sunspot equilibria in a static, one-commodity model with taxes and transfers denom... more We investigate sunspot equilibria in a static, one-commodity model with taxes and transfers denominated in money units. Volatility in this economy is purely monetary, since the only uncertainty is about the price level. We construct simple, robust examples of sunspot equilibria that are not mere randomizations over certainty equilibria. We also identify the source of these SSEs: Equilibrium in the securities market is determined as if there were no restricted consumers and the unrestricted consumers face intrinsic uncertainty. Perfect securities markets eliminate allocation uncertainty, but they exacerbate price-level volatility.
Journal of Political Economy, Jul 1, 1969
18. Neoclassical Growth Models
University of Pennsylvania Press eBooks, Dec 31, 1977
Economic Theory, Econometrics, and Mathematical Economics
Elsevier eBooks, 1993
Journal of Economic Theory, Sep 1, 2008
In a general-equilibrium economy with nonconvexities, there are sunspot equilibria with good welf... more In a general-equilibrium economy with nonconvexities, there are sunspot equilibria with good welfare properties; sunspots can ameliorate the effects of the nonconvexities. For these economies, we show that agents act as if they have quasi-linear utility functions. We use this result to construct a new model of monetary exchange along the lines of Lagos and Wright, where trade occurs in both centralized and decentralized markets, but instead of quasi-linear preferences we assume general preferences but with indivisible labor. This suggests that modern monetary theory is more robust than one might have thought. It also constitutes progress on the classic problem of integrating monetary economics and general-equilibrium theory.
Elsevier eBooks, 1972
Naturally, the line (or hyoerplane) (2.5) is tangent to the PPF at x. Suppose that there is no ch... more Naturally, the line (or hyoerplane) (2.5) is tangent to the PPF at x. Suppose that there is no change in either technology or the proportions in which factor endowments occur, so that the PPM and the function j) (x) are unchanged. Suppose further that output then moves to a different point, x , on the SMe^PPF (u = 1) as x. This occurs because prices have shifted from v> to p p .
Journal of Economic Theory, Oct 1, 1969
Colloquium on Applications of Mathematics to Economics (Budapest, 1963)
Journal of the American Statistical Association, Jun 1, 1967
Growth Dynamics and Returns to Scale: Bifurcation Analysis
Social Science Research Network, Sep 7, 1999
ABSTRACT We analyze how the dynamic behavior of an endogenous growth model depends on the degree ... more ABSTRACT We analyze how the dynamic behavior of an endogenous growth model depends on the degree of returns to scale in production. We study a simple model of inventive activity and demonstrate that the case of constant returns to the set of reproducible factors of production (the most commonly studied case in the literature on endogenous growth) is a bifurcation point in parameter space. This bifurcation occurs on the boundary of the state space, making it dicult to analyze formally. For a special case of the model, we provide a transformation that allows us to classify the bifurcation as transcritical using standard methods. We discuss the types of new methods that will be needed to formally classify this bifurcation in a broader class of models. We thank Jess Benhabib, Guido Cozzi, Tapan Mitra, John Nachbar, Kazuo Nishimura, Steve Strogatz, and two anonymous referees for many helpful comments. We are especially indebted to John Guckenheimer and Jan Wenzelburger for useful discus...
International Journal of Economic Theory, Jan 2, 2019
We analyze the pre-deposit game in a two-depositor banking model. The Glass-Steagall bank is assu... more We analyze the pre-deposit game in a two-depositor banking model. The Glass-Steagall bank is assumed to be restricted to holding only liquid assets. Depositors tolerate a panic-based run if its probability of occurrence s is small. How s affects the allocation of assets depends on the incentive compatibility constraint (ICC). When the ICC is not binding, the sunspot allocation is not a mere randomization over the run and non-run outcomes under the so-called "optimal contract." We offer this paper as a contribution to both the literature on banking and financial fragility and also the broader literature on sunspot equilibrium.
The Costs of Economic Growth
Journal of Finance, Jun 1, 1969
First published in 1967, "The Costs of Economic Growth" was based on the central convic... more First published in 1967, "The Costs of Economic Growth" was based on the central conviction that the official figures for growth in real income were entirely compatible with a decline in human welfare. Twenty-five years later, "The Costs of Economic Growth" remains one of the most persuasive and systematic demolitions of the religion of growth yet published, its arguments only reinforced by the growing social and environmental problems of the late 20th century. For this new major edition the text has been revised and updated in the light of recent global perils and environmetal degradation.
On Optimal Taxation with Costl Administration
The American Economic Review, 2016
In adopting a set of taxes, governments are influenced by the relative costs of ad-ministering an... more In adopting a set of taxes, governments are influenced by the relative costs of ad-ministering and enforcing each kind of tax. Similarly, costs of compliance and trans-actions for households and firms depend on the mix of taxes used. Yet, in previous studies of optimal taxation (e.g., Peter Diamond and James Mirrlees), adminis-tration and transaction costs play no role in the determination of government tax policy. We offer here a first attempt at incorporating these important costs ' into a formal model of optimal taxation.2 In what follows, the class of tax instruments to be used is endogenously determined by an
Macroeconomic Dynamics, Jun 7, 2018
We analyze in some detail the full pre-deposit game in a simple, tractable, yet very rich, bankin... more We analyze in some detail the full pre-deposit game in a simple, tractable, yet very rich, banking environment. How does run-risk a¤ect the optimal deposit contract? If there is a run equilibrium in the post-deposit game, then the optimal contract in the pre-deposit game tolerates small-probability runs. However, this does not mean that small changes in run-risk are ignored. In some cases, the optimal contract becomes-as one would expect-strictly more conservative as the run-probability increases (until it switches to the best run-proof contract), and the equilibrium allocation is not a mere randomization over the equilibrium allocations from the post-deposit game. In other cases, the allocation is a mere randomization over the equilibria from the post-deposit game. In the …rst cases (the more intuitive cases), the incentive constraint does not bind. In the second cases, the incentive constraint does bind.
Journal of Economic Theory, Sep 1, 2000
In overlapping-generations economies with perfect¯nancial markets and lumpsum taxation, restricti... more In overlapping-generations economies with perfect¯nancial markets and lumpsum taxation, restrictions on the government budget de¯cits do not limit the set of achievable allocations. For economies in which tax instruments are distortionary and limited in number, de¯cits are irrelevant only in the unrealistic case in which the number of tax instruments is large relative to the number of policy goals. In particular, if the government can use only anonymous consumption taxes, then achieving the prescribed de¯cits without changing the equilibrium allocation will typically be impossible when the number of consumers exceeds the number of commodities. A similar result holds if consumer credit is (exogenously) restricted. Surprisingly, in this case, distortionary taxes may be more likely than lump-sum taxes to lead to the irrelevance of government de¯cits.
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