Andrew John

An Overlapping Generations Model of Growth and The Environment

This article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model. Short-lived individuals make decisions which have long-lasting effects on both factor productivity and the environment. The model provides a theoretical explanation of observed correlations between environmental quality and income, whereby economic growth is associated first with declines, then improvements, in environmental quality. It suggests circumstances in which multiple Pareto-ranked steady-state equilibria may arise, and in which sustained growth of both capital and environmental quality may occur. Overmaintenance of the environment, analogous to dynamically inefficient overaccumulation of capital, may emerge. Copyright 1994 by Royal Economic Society.

Why We Boycott: Consumer Motivations for Boycott Participation

Although boycotts are increasingly relevant for management decision making, there has been little research of an individual consumers motivation to boycott. Drawing on the helping behavior and boycott literature, the authors take a cost–benefit approach to the decision to boycott and present a conceptualization of motivations for boycott participation. The authors tested their framework during an actual boycott of a multinational firm that was prompted by factory closings. Consumers who viewed the closures as egregious were more likely to boycott the firm, though only a minority did so. Four factors are found to predict boycott participation: the desire to make a difference, the scope for self-enhancement, counterarguments that inhibit boycotting, and the cost to the boycotter of constrained consumption. Furthermore, self-enhancement and constrained consumption are significant moderators of the relationship between the perceived egregiousness of the firms actions and boycott participation. The authors also explore the role of perceptions of others’ participation and discuss implications for marketers, nongovernmental organizations, policymakers, and researchers.

The Boycott Puzzle: Consumer Motivations for Purchase Sacrifice

A boycott is never far from a firms exchanges with its customers. Researchers in marketing need to understand consumer protest behavior, both to aid nongovernmental organizations (NGOs) who wish to organize boycotts, and to assist managers who wish to develop appropriate strategic responses. Boycotts, like many other instances of collective action, are subject to free-rider and small-agent problems: there appears to be little or no motivation for an individual to participate. Yet they assuredly occur. We take an economic and psychological approach to the study of boycotts. Our approach is to develop a typology of motivations for consumer boycotts, to embed these motivations explicitly in a dynamic economic model, and thus to offer explanations for the extent of boycott participation.

Homelessness and labor markets

Abstract The paper develops a simple two-period model in which homelessness arises endogenously. There is a non-convexity in the housing market, so some agents optimally choose not to consume housing. In the model, homelessness leads to lower labor productivity in the future. Housing is thus an investment good, but borrowing constraints may prevent agents from being able to finance this investment. The borrowing constraints and the productivity loss combine to generate a homelessness trap.

Does State-Dependent Pricing Imply Coordination Failure?

The analysis in Ball and Romer [1991] suggests that models with fixed costs of changing price may be rife with multiple equilibria; in their static model price adjustment is always characterized by strategic complementarity, a necessary condition for multiplicity. We extend Ball and Romers analysis to a dynamic setting. In steady states of the dynamic model, we find only weak complementarity and no evidence of multiplicity, although nonexistence of symmetric steady state with pure strategies does arise in a small number of cases.

An inquiry into the existence and uniqueness of equilibrium with state-dependent pricing

State-dependent pricing models are now an operational framework for quantitative business cycle analysis. The analysis in Ball and Romer [1991], however, suggests that such models may be rife with multiple equilibria: in their static model price adjustment is always characterized by complementarity, a necessary condition for multiplicity. We study existence and uniqueness of equilibrium in a discrete-time state-dependent pricing model. In steady states of our model, we find only weak complementarity and no evidence of multiplicity. We likewise find no evidence of multiplicity in the presence of monetary shocks. However, nonexistence of symmetric steady-state equilibrium with pure strategies arises in a small region of the parameter space.

External increasing returns, short-lived agents and long-lived waste

Actions that affect environmental quality both influence and respond to macroeconomic variables. Further, many environmental and macroeconomic consequences of current actions will have uncompensated effects that outlive the actors. This paper presents an overlapping-generations model of environmental externalities and capital accumulation: consumption of the old generates long-lived garbage as a by-product, while young agents invest in both capital and destruction of the existing garbage stock. The model also assumes external increasing returns: increases in the capital stock increase the future productivity of capital. In the model, increases in the natural rate of degradation do, and improvements in societys ability to dispose of garbage may, encourage capital accumulation. Multiple Pareto-ranked equilibria can arise as a consequence of the interaction between garbage and capital accumulation. Underaccumulation of garbage, analogous to dynamically inefficient overaccumulation of capital, can arise in the model.

The Use of English-Language Business and Finance Terms in European Languages

Although it is generally accepted that English is becoming the lingua franca of international business, the details of this process are not well understood. This article uses the Google Books corpus to provide both a quantitative and a qualitative investigation of the ways in which specific English business terms are penetrating major European languages. Some English business terms now appear to be firmly established in other languages, and can be classified as lexical borrowings, while the use of other terms is better described as code-switching.

Dynamic Models of Language Evolution: The Economic Perspective

The economics of language may not yet be a mainstream subfield of economics. It is, however, a vibrant area of study that has by now generated a substantial volume of research. The investigation of this topic is generally traced back to Marschak (1965), who appears to have been the first to bring economic concepts — such as costs and efficiency — to the study of language. Most of the chapters in this volume concern how language, broadly defined, influences economic variables; such research has demonstrated that there are benefits from incorporating linguistic variables and considerations into several different areas of traditional economic analysis. In this chapter I address the reverse question: how do economic analysis and economic reasoning provide insight into linguistic phenomena? More specifically, I consider how economics and economic models shed light on language change.