This article reviews Gerd Weinrich’s contributions to a wide variety of areas in economics. They include: foundational concepts about non-Walrasian equilibria with stochastic rationing; original models of non-walrasian macroeconomics; contributions to monetary economics, economic growth and banking regulation; studies of financial decisions under risk aversion, firms’ behavior, asymmetric information and externalities.
This paper reviews the main logical difficulties of the neoclassical analysis of production and income distribution when ‘capital’ is introduced. Both the version of the theory that considers capital as a single magnitude and the one where it is constituted by a set of capital goods are presented in a unified analytical framework. The same framework is then used to provide an alternative approach to production and distribution which reconnects with the modern classical approach.
In this paper we provide an overview of some dynamic oligopoly models proposed in the literature to describe the exploitation of a common pool renewable natural resource (e.g. the fisheries) when agents can switch between different harvesting strategies. We suggest a switching mechanism which is an alternative version of the discrete-time replicator dynamics based on expected profits and myopic imitation of the better performing behaviors, often denoted as exponential replicator. We finally provide a general framework for modeling situations where authorities allow for different alternative strategies to exploit a natural resource and agents can choose among such possibilities by updating their decisions at discrete times on the basis of profitability considerations.
We examine technology adoption in an economy populated by identical consumers either working as self-employed entrepreneurs, or supplying labor to an industrial sector that consists either of a monopsonistic firm or of several firms competing on wages. Firms are price takers on the goods market and labor is the only input in production besides technology. We show that two sources of non-marketed relations cause inefficient technology choices. Technology adoption exerts a positive externality on workers’ outside options, which in turn induces a negative pecuniary externality, increasing the wage levels required to meet workers’ participation and incentive compatibility constraints.
We present two general results concerning the existence of a Walrasian equilibrium on the unit simplex and provide an example of a monetary pure exchange economy whose Walrasian equilibrium cannot be explained by them. Then, we provide generalizations of these results that are able to explain the existence of a Walrasian equilibrium in the economy considered.
The theoretical framework developed in this paper is useful when making a comparison between the disassembly and recovery of exhaustible resources merged with waste, to produce secondary resources, with the recycling of waste as a whole, to get secondary input. The main obstacle to recycling the waste as a whole is technological progress. We study how innovation could help discover more efficient processes and to reduce the extraction rate of exhaustible resources. Using a simple endogenous growth model we are able to compare the two kinds of waste management in terms of their impact on growth rates of total output, technological progress and exhaustible resource. The main results of the model are that the waste recycling process reduces the extraction rate of exhaustible resource. The growth rate of total output reaches its lowest level when the waste is recycled as a whole confirming that there is a trade-off between growth and environmental protection.
This paper studies the impact of incalculable risk (i.e. ambiguity) on two alternative institutional arrangements for financial intermediation in an economy where consumers face uncertain liquidity needs. The ambiguity the consumers experience is modeled by their degree of confidence in their additive beliefs. The optimal liquidity allocation and two institutional arrangements for implementing this allocation are analyzed: a secondary asset market and a competitive banking sector. For full confidence we obtain the well-known result that consumers prefer the deposit contract offered in the competitive banking sector over the asset market, since the former can provide the optimal cross subsidy for consumers with high liquidity needs. With increasing ambiguity this preference will be reversed: the asset market is preferred, since it avoids inefficient liquidation if the bank reserve holdings turn out to be suboptimal.
This contribution provides a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a prohibitive regulatory sanitary and phytosanitary (SPS) measure aimed at a foreign product with perceived negative characteristics. Two groups of consumers are distinguished: one that is indifferent to the foreign product’s negative attributes, and another that is concerned about them. Different scenarios concerning the welfare gains from the introduction of an NTM are explored. The welfare implications depend on consumer awareness and information policies pursued by the imposing government. The theoretical model is illustrated with data on the production and importation of prepared poultry in the EU. This paper focusses on the recent Dispute Settlement (DS) case 607 at the World Trade Organization (WTO) that was initiated by Brazil in November 2021 to consult with the EU on restrictive SPS measures imposed on the importation of prepared and preserved poultry.
This article demonstrates that the effectiveness of capital requirements in reducing default risk depends on the risk-taking behaviour of financial intermediaries. Capital requirements with risk weights that are not proportional to expected excess returns create adverse incentives that may lead to an increase in default risk through short-sales. We establish the coefficient of variation of future net worth as a measure of default risk and show that non-proportional risk weights can never be calibrated such that all intermediaries reduce default risk. Since default risk depends non-linearly on equity, it will increase with higher equity and thus with inappropriately chosen capital coefficients whenever the willingness to assume risk is sufficiently elastic.