Articles

Peter A. Corning. Synergy And Self-Organization In The Evolution Of Complex Systems

Synergy of various kinds has played a significant creative role in evolution; it has been a prodigious source of evolutionary novelty. Elsewhere it has been proposed that the functional (selective) advantages associated with various forms of synergistic phenomena have been an important cause of the "progressive" evolution of complex systems over time. Underlying the many specific steps in the complexification process, a common functional principle has been operative. Recent mathematical modellin...

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Bruno S. Frey. Punishment and beyond

This paper argues that the Economics of Crime concentrates too much on punishment as a policy to fight crime, which is unwise for several reasons. There are important instances in which punishment simply cannot reduce crime. Several feasible alternatives to punishment exist, such as offering positive incentives or handing out awards for law abiding behavior. These alternative approaches tend to create a positive sum environment. When people appreciate living in a society that is to a large exten...

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Gilles Saint-Paul. Economic Science and Political Influence

When policymakers and private agents use models, the economists who design the model have an incentive to alter it in order to influence outcomes in a fashion consistent with their own preferences. I discuss some consequences of the existence of such ideological bias. In particular, I analyze the role of measurement infrastructures such as national statistical institutes, the extent to which intellectual competition between different schools of thought may lead to polarization of views over some...

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Jess Benhabib. A Note on Regime Switching, Monetary Policy, and Multiple Equilibria

When monetary policy is subject to regime switches conditions for determinacy become more complex. Davig and Leeper (2007) and Farmer, Waggoner and Zha (2009a) have studied such conditons. Using some new results from stochastic processes, we characterize the moments of the stationary distribution of inflation under regime switiching to obtain conditions for indeterminacy that can be easily checked and interpreted in terms of expected values of Taylor coefficients. In the last section, we outline...

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Björn Bartling, Ernst Fehr, and Klaus M. Schmidt. Screening, Competition, and Job Design: Economic Origins of Good Jobs

“Trust is good, control is better.” This famous quote, attributed to Vladimir Lenin, refers to a fundamental question in any principal-agent relationship: to what extent should the principal leave discretion to the agent? Standard principal-agent theory suggests that discretion should be limited as much as possible; otherwise the agent will either exploit his freedom to shirk or he will have to be offered expensive monetary incentives to choose actions that are in the principal’s interest. Simil...

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Ernst Fehr, Lorenz Goette. Robustness and real consequences of nominal wage rigidity

Nominal wage rigidity has been shown to exist in periods of high inflation, while reduction in nominal pay has been hypothesized to occur in times of lowinflation. Nominal wage rigidity would therefore become irrelevant because there is little need to cut nominal pay under high inflation, while the necessary cuts would occur under low inflation. We test this hypothesis by examining Swiss data in the 1990s, where wage inflation was low. Nominal wage rigidity proves robust in a low inflation environment...

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