Welfare state dynamics
AbstractThe goal in the present paper is twofold, to shed some light on endogenous dynamic of the welfare states, and to provide a procedure to select among several equilibria. To this end, a dynamic model is presented, in which private agents are assumed to be "locked" to current decisions for a while. If "frictions" are large enough, the economy might exhibit more than one stable Paretorankable stationary state. Equilibrium paths would then be determined by history. The economy might become "stuck" at an inferior stationary state, with too much insurance and too little effort.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 0896.
Length: 19 pages
Date of creation: Oct 1995
Date of revision:
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- Federico Echenique & Alvaro Forteza, 1997.
"Are Stabilization Programs Expansionary?,"
Documentos de Trabajo (working papers)
0497, Department of Economics - dECON.
- Alejandro Nin & María Inés Terra, 1996. "Mercosur: un camino a la apertura o la consolidación de un bloque cerrado?," Documentos de Trabajo (working papers) 0996, Department of Economics - dECON.
- Elvio Accinelli & Martín Puchet, 1996. "An application of the catastrophe theory in general equilibrium theory," Documentos de Trabajo (working papers) 0296, Department of Economics - dECON.
- Gustavo Bittencourt & Rosario Domingo, 1996. "Inversión Extranjera Directa en Uruguay: tendencias y determinantes," Documentos de Trabajo (working papers) 0696, Department of Economics - dECON.
- Marcel Vaillant, 1996. "El GATT 94 y la Organización Mundial del Comercio. Una nueva agenda para Uruguay," Documentos de Trabajo (working papers) 0496, Department of Economics - dECON.
- Adriana Cassoni, 1996. "A bargaining model with uncertainty and varying outside opportunities," Documentos de Trabajo (working papers) 1096, Department of Economics - dECON.
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