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This introductory chapter lays out the method, theory and historical framework of the study. It focuses on the potential for historical materialism to help us better understand and critique international law uncovering its structural complicity with oppression, exploitation and dispossession. Along with offering a succinct summary of the capitalist mode of production in Marxist thought, the chapter also reflects on the benefits of combining textual deconstruction with materialist analysis in order to better comprehend law as a textual discipline that is at the same time profoundly entangled with extra-textual processes of capitalist accumulation. Drawing from epistemology and the Marxist philosopher, Luis Althusser, the author defends the importance of a symptomatic reading of international legal materials that centres a specifically juridical problematic.
Chapter 2 provides a contextual discussion of why some non-States Parties object to the jurisdiction of the ICC. The chapter engages with the allegation that the Rome Statute infringes on the sovereignty of non-States Parties by allowing the ICC to prosecute their nationals in certain circumstances. This involves an analysis of how the Statute affects non-States Parties and an evaluation of whether such effects amount to an infringement of State sovereignty. How sovereignty interacts with international law is largely a matter of perspective, and how States perceive sovereignty shapes their view of whether there is an acceptable legal basis for the Rome Statute’s jurisdiction provisions. This chapter argues that the ICC needs to recognise such concerns and formulate the legal basis for its jurisdiction in a way that maximises the role of State consent.
Chapter 1 examines the theoretical basis of the best interests principle. This chapter examines the implications and demands of the principle, and it explores how the principle is to be applied. In line with the guidance provided by the Committee on the Rights of the Child, the best interests principle is understood to be a right, the content of which is guided by reference to the other rights contained in the UNCRC. The advantage of this approach is that it allows the best interests principle to be realised in a structured manner, namely one that is guided by the UNCRC. The chapter provides further nuance to the best interests principle by identifying a new conceptual framework for its application. This framework is designed to overcome the perceived deficiencies of the principle. The framework not only is largely based on the guidance of the Committee, but also suggests that social science literature should be incorporated into the best interests assessment to provide broader guidance about what is ‘best’ for children in particular situations.
Incoherentism about vagueness is the view that vague expressions/concepts are incoherent due to their vagueness. This chapter elaborates on what incoherentism is, and defends a particular incoherentist view. It presents an overview of important arguments for and against incoherentism. Among arguments for the view are claims that it provides an attractive account of the nature of vagueness, and of the way in which vagueness is associated with indeterminacy. Among arguments against the view are claims that it presupposes a mistaken view on semantic/conceptual competence, and that the view sits ill with how ubiquitous vagueness is. The specific view defended is compared to the views of Michael Dummett, Terence Horgan and Peter Unger.
This article analyzes a general equilibrium growth model with overlapping generations and (production-induced) environmental degradation. Individuals react to environmental damages through mitigation or adaptation. In the former case, they reduce production and its environmental impact. In the latter, they do not tackle the causes of the problem but rather its consequences (i.e., the wellbeing loss due to environmental degradation) by increasing defensive expenditures. Despite its simplicity, the model can generate different long-term outcomes: convergence to a stationary state following a unique trajectory or local/global indeterminacy. In the last scenario, initial conditions (history) and individual expectations matter and the model can generate coordination failures and endogenous fluctuations. Results cast doubt on solutions to environmental problems relying on the role of individual behavior change or adaptation.
This study examines the effects of borrowing for public services that increase households' utility (i.e., utility-generating government services) in an AK endogenous growth model. We assume that the government has a target debt ratio. The European Union and the United Kingdom adopt such debt policy rules. We find that application of a debt policy rule into utility-generating government spending causes indeterminacy of the transition path. We point out that the level of the target debt ratio, the tax rate, and the household utility parameters are important determinants of indeterminacy when considering utility-generating government services.
This paper examines the stability of sunspot equilibria in one-sector RBC models under infinite horizon learning. We present general conditions under which the reduced-form model can possess E-stable sunspot equilibria and apply these conditions to three prominent one-sector RBC models. We find that the rational expectations sunspot equilibria are generally unstable under learning.
This paper presents a Ramsey-like dynamic small open economy with endogenous labor migration. In the model, the domestic economy is free to borrow or lend as much as it wants at the given world interest rate, and individuals are supposed to be free to move from a country to another in response to the emergence of a wage differential between countries. Our analysis can be ideally split in two parts. Initially, we propose a baseline model in which only natives are allowed to save and invest in capital assets and traded bonds, whereas immigrants are credit constrained. Next, we provide an extension in which all individuals, including immigrants, have full access to international financial markets. We find that the steady state is always local indeterminate, and that the adjustment dynamics of the competitive equilibrium is dependent upon the initial level of the immigration ratio.
The perception that inflation targeting (IT) runs a high risk of indeterminacy when a significant share of households are too poor to save is an artifact of the closed economy. In the open economy, the Taylor principle is generally valid for both contemporaneous and forward-looking IT. Active policy in contemporaneous IT guarantees determinacy, eccentric cases aside. In forward-looking IT, the scope for active policy is constrained by an upper bound on the Taylor coefficient. The upper bound is insensitive, however, to the share of poor, nonsaving households. Moreover, it can be increased substantially–to a level that does not bind–through reserve sales/purchases that limit exchange rate volatility.
This paper considers a pure exchange overlapping generations model in which the money-growth rate is endogenous and follows a feedback rule. Different specifications for the monetary policy rule are analyzed, namely a so-called current, forward, or backward-looking feedback rule, depending on whether the monetary authority uses the actual, expected, or last observed values of the inflation rate to set the monetary policy. We study how the responsiveness of the policy rule with respect to inflation affects the determinacy of the monetary equilibrium. A policy rule is called aggressive (moderate) if it responds strongly (moderately) to inflation deviations from the target. We show how aggressive feedback rules, depending on the considered timing, can reinforce mechanisms that lead to indeterminacy or may lead the inflation rate to fluctuate around the monetary equilibrium at which monetary policy is aggressive. A leaning against the wind policy seems to be more desirable from an equilibrium determinacy point of view. On the contrary, a leaning with the wind policy could not be the recommended policy for the Central Bank.
It is commonly accepted that credit market frictions are an important source of macroeconomic fluctuations. But what is the link between the two? And what is the driving factor of asset prices volatility? To answer these questions, we have introduced a specific credit friction, limited commitment, in a general equilibrium model with production and investment in productive capital, where agents can trade bonds. The model always displays a stationary equilibrium where bonds are traded. More importantly, limited commitment may generate stochastic endogenous fluctuations driven by self-fulfilling volatile expectations (sunspots), yielding credit and investment cycles and bond price volatility consistent with data.
This study constructs a variety expansion growth model with public research spending. Public researchers financed by taxes on asset income, consumption, and corporate profits raise the productivity of private research and development. We show that the welfare-maximizing level of public research spending is below the growth-maximizing level. With regard to tax policy, a zero-profit tax maximizes the welfare of households. In addition, the study analyzes the dynamics of the economy, showing that equilibrium is indeterminate when the government's revenue source depends on an asset income tax.
This paper investigates, in the case of the euro area, the standard assumption that the liquidity trap steady state, which arises from the existence of the zero lower bound on the nominal interest rate, is locally unstable. We show that the policy function of the European Central Bank (ECB) is described by a nonlinear Taylor rule. Then, using our estimations, we show that around the liquidity trap steady state the equilibrium is locally determinate for most plausible parameter values. Finally, we find that an inflation shock is more efficient than a demand shock to escape the liquidity trap steady state.
We investigate the role of nonseparable preferences in the occurrence of macroeconomic instability under a balanced-budget rule where government spending is financed by a tax on labor income. Considering a one-sector neoclassical growth model with a large class of nonseparable utility functions, we find that expectations-driven fluctuations occur easily when consumption and labor are Edgeworth substitutes or weak Edgeworth complements. Under these assumptions, an intermediate range of tax rates and a sufficiently low elasticity of intertemporal substitution in consumption lead to instability.
In one-sector neoclassical growth models, consumption externalities lead to an inefficient allocation in a steady state and indeterminate equilibrium toward a steady state only if there is a labor–leisure trade-off. This paper shows that in a two-sector neoclassical growth model, even without a labor–leisure trade-off, consumption spillovers easily lead to an inefficient allocation in a steady state and indeterminate equilibrium toward a steady state. Negative consumption spillovers that yield ove-accumulation of capital in a one-sector model may lead to underaccumulation or overaccumulation of capital in two-sector models, depending on the relative capital intensity between sectors. Moreover, a two-sector model economy with consumption externalities is less stabilized than an otherwise identical one-sector model economy.
We introduce public spending, financed through income taxation, into the Ramsey model with heterogeneous agents. Public spending as a source of welfare generates more complex dynamics. In contrast to previous contributions focusing on similar models but with wasteful public spending, limit cycles through Hopf bifurcation and expectation-driven fluctuations appear if the degree of capital–labor substitution is high enough to be compatible with capital income monotonicity. Moreover, unlike frameworks with a representative agent, our results do not require externalities in production and are compatible with a weakly elastic labor supply with respect to wage.
This paper develops a general equilibrium model with a banking system and a reserves market and shows that (i) the macroeconomic stabilizing properties of the nominal interest rate rules change quite substantially when we move from a model without a banking system to one with a banking system and a reserves market; (ii) the interplay between fiscal and monetary policies, in particular inflation-indexed versus non-indexed bonds, is crucial in determining the macroeconomic stabilizing properties of monetary rules; (iii) active rules and passive rules perform equally in regard to their macroeconomic stabilizing properties; (iv) continuous- and discrete-time specifications deliver the same/different (in)determinacy results for both the labor-only model and the endogenous-capital model under forward-looking/current-looking rules; (v) the inclusion of physical investment narrows the indeterminacy region under forward-looking rules; and (vi) current-looking rules make equilibrium determinacy impossible for both the labor-only economy and the endogenous-capital economy. Economic intuitions are provided.
Equilibrium indeterminacy due to economies of scale (ES) in financial intermediation is quantitatively examined in a monetary business-cycle environment. Financial intermediation provides deposits that serve as a substitute for currency to purchase consumption, and depositing decisions are susceptible to nonfundamental shocks to confidence. The analysis considers various assumptions on nominal rigidities and the timing of deposit decisions. The results suggest that indeterminacy arises for small ES, and the resulting confidence shocks qualitatively mimic monetary shocks. A calibration exercise concludes that U.S. economic volatility from this nonfundamental source has increased over time while volatility from fundamental sources has decreased.