Harl E. Ryder

Mortality decline, human capital investment, and economic growth

We examine the role of increased life expectancy in raising human capital investment during the process of economic growth. We develop a continuous time, overlapping generations model in which individuals make optimal schooling investment choices in the face of a constant probability of death. We present analytic results, followed by results from a calibrated version of the model using realistic estimates of the return to schooling. Mortality decline produces economically significant increases in schooling and consumption. Allowing schooling to vary endogenously produces a much larger response of consumption and capital to mortality decline than is observed when schooling is held fixed.

Existence, uniqueness, and stability of equilibrium in an overlapping-generations model with productive capital

This paper analyzes the existence, uniqueness, and stability of a steady-state equilibrium in an overlapping-generations model with productive capital. It is shown that for any feasible set of well-behaved preferences there exists a production function that satisfies the Inada conditions under which the economy experiences global contraction and the steady-state equilibrium is characterized by the absence of production and consumption. The study establishes a strengthened Inada condition which is necessary to preclude global contraction. and sufficient conditions for the existence of a unique and globally stable non-trivial steady-state equilibrium.

Two-Sided Search, Marriages and Matchmakers

This paper analyzes the provision of matching services in a model of two-sided search. Agents belong to two populations and are uniformly distributed on [0,1]. Their utility is equal to the index of their mate. In a search equilibrium, as in Mac Namara and Collins (1990), agents form subintervals and are only matched to agents inside their class. Agents of higher quality form larger clusters. Marriage brokers offer to match agents according to a centralized matching procedure. If the matchmaker charges a uniform participation fee to all agents, then she selects to match a subset of agents of higher quality according to the stable identity matching rule. If, on the other hand, the matchmaker can charge different commissions to different agents, she will either choose to match all agents, if the matching cost is low enough, or not to operate.

Dynamic efficiency of steady-state equilibria in an overlapping-generations model with productive capital

This paper establishes sufficient technological conditions under which, for any feasible set of well-behaved preferences, stationary over-investment relative to the Golden Rule is ruled out and the economys steady-state equilibria are therefore dynamically efficient.

Heterogeneous time preferences and the distribution of wealth

Abstract This paper shows that when households are heterogeneous with respect to time preference, the capital market functions as a powerful mechanism generating and maintaining a highly skewed distribution of wealth. A simple model of household savings is embedded into (1) a consumption loans economy and (2) a productive capital economy. The robustness of the conclusions is tested by relaxing some of the simplifying assumptions. Various counteracting instruments of social policy are discussed.

On the second optimality theorem of welfare economics

Abstract To what extent does the second optimality theorem of welfare economics (every Pareto optimal allocation can be repesented as a Walras equilibrium allocation) remain valid when preferences are allowed to be locally satiated? It is always valid for an exchange economy, and is valid for a production economy if there is a consumer who is not locally satiated, but not in general for a production economy where all consumers are locally satiated. A generalized equilibrium is defined, which includes the Walras equilibrium as a special case. Every Pareto optimum can be represented as a generalized equilibrium allocation. Furthermore, every Pareto optimal utility distribution can be realized by a Walras equilibrium allocation.