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Categories: Economic theory
Reasons for Remitting
Oded Stark
Volume 10, Number 3, 2009, pages 147 - 158
This article presents a set of reflections on what gives rise to remittances, which constitute a major part of the impact of migration on economic development in the migrants’ own countries. The collage of reasons presented serves to illustrate that remittance behaviour is the outcome of an intricat ... Read more
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The Great Moderation and the New Business Cycle
Ann Spehar
Volume 10, Number 1, 2009
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An Expanded Concept of Capital in Development Economics
Luc Noiset
Volume 9, Number 4, 2008, pages 201 - 208
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Perspectives on Inclusive Development
Concepts, approaches and current issues
Michael Chibba
Volume 9, Number 4, 2008, pages 145 - 158
The pursuit of inclusive development raises numerous questions and challenges for academics, practitioners and policymakers. To demystify the subject and move towards addressing the challenges, this paper first highlights the concept of inclusive development. Next, the key approaches as advanced ... Read more
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Missing Out on Industrial Revolution
Eric Jones
Volume 9, Number 4, 2008, pages 101 - 128
Explanations of industrialisation stress England’s nineteenth-century abrupt departure from a common Eurasian pattern. This paper examines the preceding de-industrialisation of Southern England and limited development of Tokugawa Japan (the shogunate that ruled Japan from 1600–1868), which throw ... Read more
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Why do Governments Delay Devaluation?
The political economy of exchange rate inertia
Graham Bird & Thomas D. Willett
Volume 9, Number 4, 2008, pages 55 - 74
In the sequence of currency crises in emerging economies in the 1990s, there was an observed reluctance to devalue the exchange rate. Although ultimately adopted, the decision to devalue was usually delayed, often until it could no longer be avoided. While economic explanations of delay are avail ... Read more
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Andrew Haldane on Tim Congdon, Keynes, the Keynesians and Monetarism

Volume 9, Number 3, 2008, pages 235 - 238
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Two Concepts of the Output Gap
Tim Congdon
Volume 9, Number 1, 2008, pages 147 - 175
Two alternative concepts of the output gap, Keynesian and monetarist, can be distinguished. When they use the phrase, economists should make clear which concept is under discussion. The first concept, developed by Okun in the early 1960s, defines the output gap relative to a full employment notion o ... Read more
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Growth Strategies and Dynamics
Insights from country experiences
Mohamed A. El-Erian & A. Michael Spence
Volume 9, Number 1, 2008, pages 57 - 96
The paper examines the challenges that developing countries face in accelerating and sustaining growth. The cases of China and India are examined to illustrate a more general phenomenon which might be called model uncertainty. As a developing economy grows, its market and regulatory institutions cha ... Read more
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Keynes in the Long Run
Robert Skidelsky
Volume 8, Number 4, 2007, pages 47 - 60
In the light of recent market volatility, this essay asks: is Keynes dead or alive? The broad conclusion is that while macroeconomic models are still used, very little survives of Keynes’s original theory. 'New Keynesians' have replaced his key concept of radical uncertainty by models of imperfect i ... Read more
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Joe Perkins on Peter Diamond & Hannu Vartiainen (editors), Behavioral Economics and Its Applications

Volume 8, Number 3, 2007, pages 201 - 205
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A Dynamic Theory of China–U.S. Trade
Making sense of the imbalances
Amar Bhidé & Edmund Phelps
Volume 8, Number 3, 2007, pages 7 - 25
China's trade surplus with the U.S. is now more than a quarter of the U.S. trade deficit and, with China growing faster than the U.S., raises questions about its future course. Some media commentators term the chronic trade surplus "mercantilist" but offer no persuasive motive for it. Academics taki ... Read more
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Alan Budd on Diane Coyle, The Soulful Science: What Economists Really Do and Why It Matters

Volume 8, Number 1, 2007, pages 255 - 258
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Reply to Aldo Matteucci, ‘Is Suicide Terrorism a Novel Economic Phenomenon?’   FREE ARTICLE
Mark Harrison
Volume 8, Number 1, 2007, pages 241 - 243
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Is Suicide Terrorism a Novel Economic Phenomenon?   FREE ARTICLE
A response to Mark Harrison’s ‘An Economist Looks at Suicide Terrorism’
Aldo Matteucci
Volume 8, Number 1, 2007, pages 239 - 240
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An Economist Looks at Suicide Terrorism
Mark Harrison
Volume 7, Number 3, 2006, pages 1 - 15
Suicide terrorism has an economic aspect. The organisation of a suicide mission requires an incentive, a voluntary transaction, and a contract that is enforceable by the parties to it. A terrorist faction that competes for power in a community that is both oppressed and oppressive provides young peo ... Read more
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Gold and Silver as Monetary Metals
An overview
John Cooper
Volume 7, Number 2, 2006, pages 133 - 144
Commodity money systems, based upon gold or silver, provided relative economic stability for centuries. On the other hand, our modern paper money system, based upon unbacked government liabilities, is particularly vulnerable to abuse. The various financial crises during the twentieth century bear wi ... Read more
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The Enduring Elixir of Economic Growth
Xavier Sala-i-Martin on the wealth and poverty of nations
An interview with introduction byBrian Snowdon
Volume 7, Number 1, 2006, pages 73 - 130
“I think that the most important question that an economist can ask is, What is it that makes a country grow? More than anything else it is economic growth that affects human welfare…this is why it must remain a major research interest for economists.” In this interview Xavier Sala-i-Martin—w ... Read more
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The Economics of Happiness
Insights on globalization from a novel approach
Carol Graham
Volume 6, Number 3, 2005, pages 41 - 55
The economics of happiness is an approach to assessing welfare that combines economists’ techniques with those of psychologists, and relies on more expansive notions of utility than does conventional economics. Research based on this approach highlights the factors—in addition to income—that affect ... Read more
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Migration and Development
A new research and policy agenda
Dhananjayan Sriskandarajah
Volume 6, Number 2, 2005, pages 141 - 146
There is growing interest in the impacts of international migration on economic development. Yet, despite a burgeoning literature, some of the most fundamental questions in this area remain unanswered. This article suggests five priorities for devising better methodologies for understanding the impa ... Read more
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The New Economics of the Brain Drain
Oded Stark
Volume 6, Number 2, 2005, pages 137 - 140
For nearly four decades now, the conventional wisdom has been that the migration of human capital (skilled workers) from a developing country to a developed country is detrimental to the developing country. However, this perception need not hold. A well-designed migration policy can result in a “bra ... Read more
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Measures of Progress and Other Tall Stories
From income to anthropometrics
John Komlos & Brian Snowdon
Volume 6, Number 2, 2005, pages 87 - 135
How should progress be measured? Today, economists and economic historians have available a rich array of data for a large number of countries on which to base their response to this important question. The need for alternative measures of the standard of living is particularly important for economi ... Read more
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Monetarism: A Rejoinder
Tim Congdon
Volume 5, Number 3, 2004, pages 179 - 197
Tim Congdon responds to the article by Thomas Mayer and Patrick Minford, ‘Monetarism: A Retrospective’ that appeared in World Economics, Vol. 5, No. 2 (April–June), 2004, pp. 147–185. ... Read more
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Monetarism in Retrospect — and Prospect
Andrew G Haldane
Volume 5, Number 3, 2004, pages 171 - 178
Andrew Haldane responds to the article by Thomas Mayer and Patrick Minford, ‘Monetarism: A Retrospective’ that appeared in World Economics, Vol. 5, No. 2 (April–June), 2004, pp. 147–185. ... Read more
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Monetarism: A Response
Meghnad Desai
Volume 5, Number 3, 2004, pages 165 - 170
Meghnad Desai responds to the article by Thomas Mayer and Patrick Minford, ‘Monetarism: A Retrospective’ that appeared in World Economics, Vol. 5, No. 2 (April–June), 2004, pp. 147–185. ... Read more
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Monetarism Revisited
Allan Meltzer
Volume 5, Number 3, 2004, pages 161 - 164
Allan Meltzer responds to the article by Thomas Mayer and Patrick Minford, ‘Monetarism: A Retrospective’ that appeared in World Economics, Vol. 5, No. 2 (April–June), 2004, pp. 147–185. ... Read more
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What Do Economists Know?
Alan Budd
Volume 5, Number 3, 2004, pages 17 - 26
How would you respond to a group of high school students when asked “What do economists know?”. Alan Budd’s answers will be familiar to readers of World Economics but bear repeating. Economics, unlike, say, Physics, tends to attract beliefs and opinions by non-specialists held with as much ... Read more
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Monetarism
A retrospective
Thomas Mayer & Patrick Minford
Volume 5, Number 2, 2004, pages 147 - 185
This paper offers a retrospective on the monetarist debate started by Milton Friedman in the 1950s, discussing both monetarist theory and policy recommendations. While the inability to find a controllable monetary aggregate with a velocity that can be accurately predicted has severely damaged the ... Read more
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Explaining the ‘Great Divergence’
Daron Acemoglu on how growth theorists rediscovered history and the importance of institutions
An interview with introduction by Brian Snowdon
Volume 5, Number 2, 2004, pages 83 - 130
Daron Acemoglu is Professor of Economics at the Massachusetts Institute of Technology. In this interview he discusses with Brian Snowdon some of his recent research findings that confirm the key role played by ‘good’ and ‘bad’ institutions in determining the economic performance of countries. He ... Read more
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Globalisation and the Asia–Pacific Revival
Arne Bigsten
Volume 5, Number 2, 2004, pages 33 - 55
This paper reviews evidence on the evolution of international economic integration of Asia–Pacific countries, and discusses the extent to which this explains their recent growth success. It starts with a review of some theoretical arguments in the growth and globalisation debate, which is followe ... Read more
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The Morality of Market Mechanisms to Control Pollution
Wilfred Beckerman & Joanna Pasek
Volume 4, Number 3, 2003, pages 191 - 207
The use of pollution charges or tradeable permits to reduce pollution has been condemned by many environmentalists and some philosophers on the grounds that (i) pollution is inherently immoral; (ii) environmental assets are not appropriately valued in monetary terms; and (iii) the sale of ‘enviro ... Read more
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An Economic Analysis of the Mafia
David Maddison & Marilena Pollicino
Volume 4, Number 2, 2003, pages 163 - 177
This paper reviews the current economic thinking on the Mafia phenomenon. It distinguishes the Mafia from ordinary criminal gangs by the desire of the former for the exclusive right to commit criminal acts. The existence of the Mafia in particular locations at particular times is explained by the ... Read more
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Valuing the Future
Recent advances in social discounting
David Pearce, Ben Groom, Cameron Hepburn & Phoebe Koundouri
Volume 4, Number 2, 2003, pages 121 - 141
One of the most controversial areas of economics is the practice of discounting: attaching a lower weight to future costs and benefits than present costs and benefits. Discounting appears to offend notions of sustainable development and the interests of future generations. Recent advances in the ... Read more
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Monetary Policy
A subtle paradigm shift?
Claudio Borio & Philip Lowe
Volume 4, Number 2, 2003, pages 103 - 119
A growing challenge for central banks is to secure monetary and financial stability simultaneously. Indeed, somewhat paradoxically, success in controlling inflation can sometimes contribute to the development of imbalances that ultimately lead to financial stresses, with potentially serious macro ... Read more
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From Socialism to Capitalism and Democracy
János Kornai on the trials of socialism and transition
An interview with introduction by Brian Snowdon
Volume 4, Number 1, 2003, pages 33 - 71
János Kornai is generally regarded as the world’s leading scholar on socialist economic systems. In this interview, Professor Kornai discusses the evolution of his thinking on the political economy of the socialist system, its characteristics, reform, transition and future. ... Read more
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Capitalism and the End of History
Adair Turner
Volume 4, Number 1, 2003, pages 15 - 32
In this article Adair Turner explores the relative economic and social success of different variants of capitalism, and considers how societies best reconcile the objectives of economic dynamism with those of social inclusion and environmental responsibility. He also addresses the wider issue of ... Read more
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Pride and Prejudice
What’s good and bad about economics
Diane Coyle
Volume 4, Number 1, 2003, pages 1 - 6
Economics is one of the most powerful of intellectual disciplines, applying enlightened scepticism to human society. Its analytical rigour often makes economists unpopular, but that ought to be a source of pride. Unfortunately, we are all too often our own worst enemies, as the formal study of ec ... Read more
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Labour Standards and International Trade
Krisztina Kis-Katos & Günther G. Schulze
Volume 3, Number 4, 2002, pages 101 - 129
Can a case be made for the imposition of international minimum labour standards? And if so, on what grounds? The authors systematically present the existing theoretical and empirical arguments for and against introducing minimum labour standards on the international level, and discuss whether tra ... Read more
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The Growing US Fiscal Gap
Daniel Shaviro
Volume 3, Number 4, 2002, pages 1 - 8
The United States has a huge long-term fiscal gap, perhaps with a present value as great as $74 trillion. The US may thus be unable to continue meeting its current spending commitments without eventually enacting huge tax increases. The tax cut enacted in 2001 may have increased the fiscal gap by ... Read more
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James Tobin, 1918–2002
An interview with introduction by Brian Snowdon & Howard Vane
Volume 3, Number 3, 2002, pages 121 - 160
Professor James Tobin, who died on 11 March 2002, was possibly the most eminent of the world’s ‘Keynesian’ economists. Described by Nobel Laureate Paul Samuelson as “the archetype of a late-twentieth century American scholar”, Tobin was without doubt one of the most influential economists of his ... Read more
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The Quest for Stability
Alan Budd
Volume 3, Number 3, 2002, pages 55 - 70
The UK seems to be enjoying a golden age of macroeconomic policy-making. Growth is steady; inflation is low and stable, and unemployment is low. After years of trying to achieve economic stability we seem to have found the answer. This paper explores the history of policy-making from the late 195 ... Read more
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Where Do We Stand On Choosing Exchange Rate Regimes in Developing and Emerging Economies?
Graham Bird
Volume 3, Number 1, 2002, pages 145 - 167
In the midst of a lively debate about international monetary reform at the beginning of the twenty-first century, there seemed to be a broad consensus about exchange rate policy in developing and emerging economies; that they should opt for one of the extremes in the form of either firm fixity or ... Read more
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Stock Markets and Central Bankers
The economic consequences of Alan Greenspan
Andrew Smithers & Stephen Wright
Volume 3, Number 1, 2002, pages 101 - 124
There is a near-consensus that central bankers should focus their attention on the control of inflation, and should accordingly not pay attention to movements in stock markets. This view is reinforced by the continuing influence of the Efficient Markets Hypothesis (EMH), which maintains that financi ... Read more
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The Economics of Happiness
Bruno S. Frey & Alois Stutzer
Volume 3, Number 1, 2002, pages 25 - 41
Economists have long considered themselves fortunate that micro-economic theory needs only be based on relative utility, as it is widely believed that utility is not measurable in absolute terms. But this view is no longer valid. The measurement of happiness constitutes a good approximation to util ... Read more
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Mother Earth: Ally or Adversary?
Thorvaldur Gylfason
Volume 3, Number 1, 2002, pages 7 - 24
Economic growth requires capital. This article reviews the relationship between economic growth around the world and six different kinds of capital: real capital; human capital; financial capital; foreign capital; social capital; and natural capital. Economic theory and empirical evidence suggest t ... Read more
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"There Will Be Growth in the Spring"
How credible are forecasts of recovery?
Prakash Loungani
Volume 3, Number 1, 2002, pages 1 - 6
Forecasters are currently echoing Chauncey Gardner’s words that “There will be growth in the spring”. Or certainly by the summer. Are such forecasts credible? Yes. This article presents evidence that private sector forecasters have done a reasonably good job of forecasting recoveries in industria ... Read more
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Why is There No AIDS Vaccine?
A new economic explanation
Pedro Rey Biel
Volume 2, Number 4, 2001, pages 117 - 132
This paper provides an economic explanation for the non-existence of a vaccine against AIDS. It comments on previously claimed economic reasons why private laboratories do not have incentives to invest in an AIDS vaccine and provides a new one: private companies already operate in the market for ... Read more
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Championing Free Trade in the Second Age of Globalisation
Jagdish Bhagwati on trade, democracy and growth
An interview with introduction by Brian Snowdon
Volume 2, Number 4, 2001, pages 53 - 104
Professor Jagdish Bhagwati is without question one of the world’s leading economists and an authority on the principles and practice of foreign trade. In his extensive research over the past forty years he has made seminal contributions to trade theory and policy, public finance, the new political ... Read more
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Economists and Sustainable Development
The OECD Report on Policies for Sustainable Development
Wilfred Beckerman
Volume 2, Number 4, 2001, pages 1 - 17
The OECD report is almost exclusively about environmental policy (on which it contains a mass of useful data and discussion). There is, commendably, hardly any discussion of the implications of the usual core condition in consensus definitions of sustainable development, namely that there should ... Read more
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Redefining the Role of the State
Joseph Stiglitz on building a ‘post-Washington consensus’
An interview with introduction by Brian Snowdon
Volume 2, Number 3, 2001, pages 45 - 86
An interview with introduction by Brian Snowdon Professor Joseph Stiglitz is without question one of the world’s leading economists. In his extensive research he has made seminal contributions to the analysis of the economic consequences of incomplete information and uncertainty. This wo ... Read more
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Revisiting The Death of Economics
Paul Ormerod
Volume 2, Number 2, 2001, pages 163 - 176
Paul Ormerod achieved notoriety, even opprobrium among orthodox economists, with the publication in 1994 of his best-selling book The Death of Economics. Ormerod’s aim was to provide a critique of conventional economics which was accessible to general readers. He described orthodox economics—with ... Read more
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Keeping the Keynesian Faith
Alan Blinder on the evolution of macroeconomics
An interview with introduction by Brian Snowdon
Volume 2, Number 2, 2001, pages 105 - 140
This wide-ranging discussion takes in the development of macroeconomics and the influence of ideas and events on that development, the nature and causes of the Great Depression, Keynesianism, lessons from the high-inflation period of the 1970s, the role of macroeconomic policy, and the idea of the ‘ ... Read more
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IMF Programmes: Is there a conditionality Laffer Curve?
Graham Bird
Volume 2, Number 2, 2001, pages 29 - 49
The long-standing debate over IMF conditionality has received a new lease of life in the context of the debate over a new international financial architecture. Conditionality has increased in recent years and some proposals for reform envisage a continuation of this trend. However, by emphasising ... Read more
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Negotiating Trade
David Flath
Volume 2, Number 2, 2001, pages 19 - 28
If unilateral free trade is the best policy, then why are international treaties needed to achieve it? The reason may be found in the Becker theory of competition among political pressure groups. By entering wide-ranging negotiations, nations shift the political question from one of protecting a ... Read more
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On Understanding Money
Martin Shubik
Volume 2, Number 1, 2001, pages 95 - 120
Fiat money is a creation of both the state and society. Its value is supported by expectations which are conditioned by the dynamics of trust in government, the socio-economic structure and by outside events such as wars, plagues or political unrest. The micro-management of a dynamic economy is not ... Read more
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Child Labour
Theory, policy and evidence
Saqib Jafarey & Sajal Lahiri
Volume 2, Number 1, 2001, pages 69 - 93
The purpose of this paper is to pull together the emerging theoretical and empirical literature on the economics of child labour, and to draw out the underlying commonalities between various contributions in this field. In doing so, the authors also identify various policy options and their relat ... Read more
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Can Bettors Win?
A perspective on the economics of betting
Leighton Vaughan Williams
Volume 2, Number 1, 2001, pages 31 - 48
In this paper, a survey is undertaken of studies that examines the extent to which systematic patterns of behaviour in betting markets can generate above-average or even abnormal returns, the latter being most conveniently defined for these purposes as a profit. The paper concludes that although b ... Read more
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Biodiversity in the Marketplace
Geoffrey Heal
Volume 1, Number 4, 2000, pages 149 - 177
What is the nature of biodiversity as an economic commodity and why does it matter? How would its conservation contribute economically to our well-being? In this article, Geoffrey Heal considers three issues: Why is biodiversity important from an economic perspective? What kind of commodity is it? D ... Read more
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Goods and Bads
Ralph Turvey
Volume 1, Number 4, 2000, pages 1 - 13
There is a high degree of symmetry between economic goods and economic bads. Snow, litter and street mud are cited as examples. Economic growth obviously results in an increase in the supply of bads as well as goods. In addition, however, because it raises the value of time it can turn goods into ... Read more
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Market-based Instruments
If they’re so good, why aren’t they the norm?
Tannis Seccombe-Hett
Volume 1, Number 3, 2000, pages 101 - 126
Economists have long recommended market-based instruments for efficient environmental policy-making – taxes, tradable permits, auctions of property rights, etc. So why is progress on them so slow? The reality is that any environmental policy faces many political, institutional and technical obstacl ... Read more
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A Non-technical Introduction to Bargaining Theory
Abhinay Muthoo
Volume 1, Number 2, 2000, pages 145 - 166
This article presents some principles of bargaining theory in a non-technical language in order to make them accessible to people outside the academic community. These principles are presented keeping in view several real-life situations confronting Presidents and Prime Ministers, policy makers an ... Read more
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