Browsing by Author "Townsend, Wilbur"

Now showing 1 - 5 of 5

Open Access
Basic understanding of social inequality dynamics
(Te Herenga Waka—Victoria University of Wellington, 2015) Krawczyk, Jacek B; Townsend, Wilbur
We provide an introduction to a model of social inequality dynamics. Because capital is distributed less equally than labour, we propose that that one of the main forces driving income inequality is the ratio of factor shares. In this paper we give an easy proof to show that this ratio is driven by the output elasticity of capital.
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Joint culpability: The effects of medical marijuana laws on crime
(Te Herenga Waka—Victoria University of Wellington, 2017) Chu, Yu-Wei Luke; Townsend, Wilbur
Most U.S. states have passed medical marijuana laws. In this paper, we study the effects of these laws on violent and property crime. We first estimate models that control for city fixed effects and flexible city-specific time trends. To supplement this regression analysis we use the synthetic control method which can relax the parallel trend assumption and better account for heterogeneous policy effects. Both the regression analysis and the synthetic control method suggest no causal effects of medical marijuana laws on violent or property crime at the national level. We also find no strong effects within individual states, except for in California where the medical marijuana law reduced both violent and property crime by 20%.
Open Access
New Zealand inequality and the struggle between capital and labour
(Te Herenga Waka—Victoria University of Wellington, 2015) Krawczyk, Jacek B; Townsend, Wilbur
This paper examines whether changes in New Zealand income inequality can be attributed to the shares of national income taken by capital and labour. Data on income inequality aggregates both capital income (rents, interest, profits) and labour income (wages and salaries). It is possible that changes in inequality correspond only to changes within the distributions of capital income and labour income, and that a rhetoric which emphasises the struggle between capital and labour is misguided. We find this is not the case: both an econometric analysis of income shares and a historical analysis of major policies demonstrates that the struggle between capital and labour matters.
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NIRA-GUI: A matlab application which solves for couple-constraint nash equibria from a symbolic specification
(Te Herenga Waka—Victoria University of Wellington, 2014) Krawczyk, Jacek B; Townsend, Wilbur
A powerful method for computing Nash equilibria in constrained, multi-player games is created when the relaxation algorithm and the Nikaido-Isoda function are used within a MATLAB application. This paper describes that application, which is able to solve static and open-loop dynamic games specifed symbolically.
Open Access
Viability of an economy with constrained inequality
(Te Herenga Waka—Victoria University of Wellington, 2015) Krawczyk, Jacek B; Townsend, Wilbur
Governments want to prevent high inequality while maintaining economic effi ciency. This paper investigates how an economy can satisfy both these constraints. We use the relative factor share as a proxy for inequality and so can use a representative agent model to understand how inequality evolves. Our representative agent model includes capital, consumption and debt which, like the relative factor share, are influenced by tax rates. Whether the model's evolutions can be constrained is understood as a problem of viability theory, and so we compute the viability kernels corresponding to our constraints. These kernels explain both how policy makers should act and why they act as they currently do. For example, we show that substantial government debt will require policy makers to reduce inequality. More importantly, we demonstrate that viability theory is a meaningful, interesting approach to understanding the tradeoff between inequality and efficiency.