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Left-Wing Political Strength, Inclusive Institutions, and the Evolution of Capitalist Systems
Full text linkThis paper examines how left-wing political strength shapes the evolution of capitalist systems through the lens of income compositional inequality (IFC). Using LIS microdata for nearly 40 countries from 1978–2022, I construct an unbalanced panel of IFC and estimate two-way fixed-effects models with Driscoll–Kraay standard errors, complemented by dynamic panel GMM and a fuzzy RDD around close elections. Results show that stronger left representation reduces IFC and pushes economies toward liberal capitalism; a 10-percentage-point increase in left strength lowers IFC by about 0.0079—roughly 7.5% of the sample mean. Political checks and balances attenuate this distributive effect, while rule-of-law and property-rights institutions amplify it. Channel analysis based on the pseudo-Gini of capital indicates that the main pathway operates via reductions in capital inequality. The findings highlight that “inclusive institutions” are internally heterogeneous and interact with partisan power, offering a more granular account of distributive dynamics within democracies
Impact of Geography on Institutions in Agricultural and Nomadic Societies
Full text linkHow geography affects the choice of institutions is studied in a theoretical model. In this model, nations are located around a circle. Rulers compete through choosing tax rates, the level of military spending, and the degree of formality of institutions. Geographic condition is captured by population density. It is shown that societies with higher population densities choose lower tax rates, establish more formal institutions, and give government officials lower levels of autonomies than those with lower population densities do. A higher level of external threats induces a ruler to choose a higher level of autonomy for officials. The model is illustrated by comparing institutions of agricultural and nomadic regimes in ancient China
Municipal bonds as sustainable means of constructing secondary cities in Malawi under the Medium-term Implementation Plan (MIP-1) of the Malawi Vision 206
Full text linkMalawi urgently needs the eight secondary cities it plans to build by 2030 to improve the social and economic welfare of its citizens. There is however little progress made in that regard in view of the absence of the financing structure. The local councils to host the secondary cities should seriously consider the municipal bonds as a sustainable financing mechanism and encourage their citizens to own the projects. There is a need to align the Local Government Act and the Public Finance Management Act on the municipal bonds. Other pertinent issues must be resolved too. This requires commitment from multistakeholders and is highly achievable
L’impact des tensions géopolitiques et les trajectoires divergentes des politiques monétaires
Full text linkThis paper investigates the impact of geopolitical tensions on central bank monetary Policy responses
over the period 2010-2024. Using an econometric Framework, the study reveals That such tensions exert
both upward and downward pressures on Policy rates, as central Banks react to external shocks in a
context of increasing global uncertainty. These responses are interpreted either as preventive measures
against inflationary risks or as cautious signaling amid volatility. Howerver, the results highlight a
significant heterogeneity in monetary Policy reactions across countries, reflecting divergent trajectories
shaped by distinct institutional, economic, and political Framework. White the explanatory power of the
model remains moderate, the findings provide valuable insights for policymakers and international
institutions facing an increasingly unstable geopolitical environment
The Character of Spider-Man: Ethics and Greed in a General Equilibrium Model
Full text linkThis paper develops a general equilibrium model in which ethics and greed coexist
as opposing forces shaping social and economic stability. Individuals choose be-
tween legal and illicit effort, while ethical agents internalize a moral cost, and the
government sets enforcement and penalties. The dynamic interaction between moral
restraint, institutional enforcement, and social respect determines the aggregate
equilibrium. The model shows that, in the absence of virtue or enforcement, greed
dominates and equilibrium collapses; yet, when moral costs or public integrity poli-
cies rise, the economy converges to a stable and more equitable state. Mathematical
stability is derived from Jury’s conditions, and an empirical strategy is proposed to
test these mechanisms using crime, enforcement, and social capital data. Ultimately,
morality emerges as an endogenous economic variable—an efficient complement to
law, rather than its substitute
Can Criminal Symbiosis Explain the Persistence of Violence in Brazil?
Full text linkThis paper develops the concept of “criminal symbiosis” to explain the persistence of violence in Brazil. Using official historical series, we document a systematic co-movement between serious crimes and minor offenses, suggesting a process of mutual reinforcement. When minor crimes increase, policing costs rise and the expected punishment for severe offenses declines, enabling escalation into homicide and organized crime. Conversely, targeted repression of minor infractions helps restore social norms and generates measurable deterrent effects. We formalize this mechanism through a dynamic system linking offender stocks, institutional responses, and intergenerational transmission of crime. The framework provides clear testable implications and supports integrated crime-prevention strategies that combine enforcement, rehabilitation, and community resilience
A Theory of Portfolio Choice for Heterogeneous Investors
Full text linkThe Merton framework has difficulty explaining empirical phenomena in household finance and life-cycle patterns. This paper proposes a continuous-time heterogeneous agent model with common noise to study portfolio choice for heterogeneous investors. Households pay an "asset-exposure premium" (AEP) based on their wealth for bearing common financial risk. The AEP effect serves as a non-monotonic third term in optimal portfolio choice. For households near the borrowing constraint, the AEP effect is large and negative, overwhelming other motives and explaining limited participation. As wealth increases, the AEP effect turns positive before disappearing at high wealth, resulting in a hump-shaped profile of risky holdings. The AEP enables households to identify the risk characteristics of their portfolio, explaining why the low wealth exhibits underdiversification and why middle-to-high wealth households hold diversified portfolios. Furthermore, this paper introduces a steady state and solves the degeneration problem of the wealth distribution in the continuous-time ABH framework
An Ecological-Economic Approach to Air Pollution Regulation in New Delhi, India
Full text linkIn this paper, we develop a new way of looking at the New Delhi, India, air pollution regulation problem that pays attention to both the ecological and the economic aspects of this problem. We first construct a theoretical model of air quality in New Delhi. We then show how the dynamic and stochastic properties of air quality in New Delhi can be used to derive two criterion functions for a regulator that are ecologically meaningful. Finally, using these two criteria, we discuss a probabilistic approach to the determination of the optimal length of time during which air quality regulations are in place. In our approach, the objective of the regulator is to maintain the ecological and economic viability of air quality in New Delhi in the long-run
Stackelberg mixed duopoly with a partially foreign-owned competitor
Full text linkAn existing study examines an international mixed duopoly involving a state-owned public firm and a foreign private firm, focusing on their timing choices for quantities and showing that the state-owned public firm should act as the leader. This result differs from that for an endogenous-timing mixed duopoly model where a state-owned public firm coexists with a domestic private firm. We study the order of moves in a mixed duopoly with a state-owned public firm and a partially foreign-owned private competitor. We extend our analysis to a Cournot duopoly model that includes a non-linear demand function. Specifically, we explore the desirable role of the state-owned public firm, either as a leader or a follower, and present the equilibrium outcome of the model. Our findings indicate that, when the private firm’s foreign ownership is high, the public firm consistently assumes a leadership role in output decisions. Conversely, if the private firm’s foreign ownership is relatively low, the public firm may act either as the leader or as the follower in the market
Environmental impact of machinery and equipment: a comparison between EXIOBASE, national environmentally extended input-output models, and ecoinvent
Full text linkEnvironmental impact assessments of machinery and equipment (ME) are constrained by process-based life cycle assessment (LCA) with limited system coverage, and by aggregated top-down models with reduced representativeness. Lack of knowledge about consistency across these approaches hampers understanding of ME impacts and policy-making. This study quantifies greenhouse gas (GHG) emission multipliers (cradle-to-gate emissions per unit production) of ME using data from process LCA (ecoinvent), national environmentally extended input-output (EEIO) models and a multi-regional EEIO model (EXIOBASE) for the United States, China, Japan, and South Korea, assessing variations, reliability and compatibility. While EXIOBASE (7 ME sectors) and national EEIO data (32-102 sectors) broadly align, national EEIO models differ more in production technologies, with deviations from 100-fold lower to 3.7-fold higher than EXIOBASE results. Ecoinvent offers broad ME product-level coverage (~390 sectors), especially for general and electrical ME, but with uneven representation and limited geographic differentiation. Its multipliers vary widely and often exceed EXIOBASE values, challenging the assumption that process-based LCA underestimates impacts due to truncation. Overall, our results reveal cross-model variation, confirm the relative reliability of EEIO data, point to limitations in ecoinvent, and underscore the need to link technical detail with global trade representation in ME modeling