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| Carter, Michael R.; Zimmerman, Frederic. |
| A growing literature suggests that inequality is economically costly. However, much of this literature depends on static analyses, begging the question of why a market system doesn't redress inequality over time if it is efficient to do so. We develop a dynamic model of asset accumulation and endogenous asset-price formation in an agrarian economy with multiple market imperfections. The model is parameterized to pre-revolutionary Nicaragua and solved numerically. The results suggest that although a free land market would eventually lead to an egalitarian land distribution, the process would take long enough, and involve sufficiently great factor-use inefficiencies along the way, that a redistributive policy would improve on the market's performance in both... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Agribusiness. |
| Ano: 1998 |
URL: http://purl.umn.edu/12644 |
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| Zimmerman, Frederic; Carter, Michael R.. |
| This paper presents a model that endogenizes asset-based risk- coping in an environment of unmediated risk and subsistence constraints. It uses an individually-rational, stochastic dynamic programming model to explore intertemporal portfolio decisions in an environment in which both yield risk and endogenous asses-price risk exist. The results show that agents pursue one the three distinct investment strategies, depending on their initial wealth levels. Agents who are too poor to support subsistence at a sustainable level eventually stock out, driving their asset base to zero. Agents who have more than a certain threshold level of highly productive assets continue to accumulate those assets. Agents who fall somewhere in between, with an intermediate level... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Risk and Uncertainty. |
| Ano: 1996 |
URL: http://purl.umn.edu/12649 |
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| Zimmerman, Frederic; Carter, Michael R.. |
| In contrast to literature which focuses on the how collective action problems inhibit the supply of efficient institutions, this paper uses dynamic stochastic general equilibrium methods to study the demand for institutional innovation. Focusing on the innovation of alienabile land rights in the West African Sahel, this microeconomic approach offers several contributions to the theory of institutional innovation. First, in contrast to the representative agent or aggregate benefit-cost approaches used to derive the demand for institutional innovation in much of the literature, this paper explores the heterogeneity of demand across agents. Second, in contrast to prior studies of the evolution of land rights, this analysis shows that, in West Africa at... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Land Economics/Use. |
| Ano: 1996 |
URL: http://purl.umn.edu/12624 |
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