In the current investigation, we evaluated the effects of open and closed economies on the adaptive behavior of 2 individuals with developmental disabilities. Across both types of economy, progressive-ratio (PR) schedules were used in which the number of responses required to obtain reinforcement increased as the session progressed. In closed-economy sessions, participants were able to obtain reinforcement only through interaction with the PR schedule requirements (i.e., more work resulted in more reinforcer access). In open-economy sessions, participants obtained reinforcers by responding on the PR schedule and were given supplemental (free) access to the reinforcers after completion of the session. In general, more responding was associated with the closed economy.
It has been hypothesized that the magnitude-of-reinforcement effect may differ in closed and open experimental economies. We determined the relationship between magnitude of reinforcement and response rate in three feeding conditions: a closed economy in which total intake was unrestricted, a closed economy in which total intake was restricted so as to maintain body weight at 85% of free-feeding weight, and a traditional open economy in which subjects received food outside the experimental session. In the closed economies, regardless of body weight, the rats responded faster for smaller pellets and when the fixed ratio for pellets was higher. In the open economy, there was no reliable effect of pellet size or pellet cost on response rate. It is concluded that although there are circumstances in which response rate is an immediate function of the parameters of reinforcement, rate is not necessarily a measure of response strength. Response rate may instead, or additionally, contribute to a strategy of reducing the costs associated with resource utilization.
Pigeons responded on multiple variable-interval variable-interval schedules of reinforcement in an open and a closed economy. Equal duration components were increased in duration while the component rates of reinforcement were held constant, the component schedules were reversed, and component duration was decreased. In the open economy, daily sessions were limited to 1 hr, and subjects were maintained at 80% of their free-feeding weights through supplemental feeding when necessary in their home cages. In the closed economy, subjects were housed in their experimental chambers and no deprivation regimen was enforced. Relative response rate decreased as components were lengthened in the open economy, whereas in the closed economy relative rate increased as components were lengthened. Response proportions overmatched reinforcer proportions to a greater extent at long component durations in the closed economy, but there was no systematic effect of component duration on responding in the open economy.
Several field and experimental studies have investigated the behavioral economics of food intake. In the laboratory, operant behavior has been used to emulate cost and to generate demand functions that express the relationship between the price of food and amount consumed. There have been few such studies of motivated food seeking and intake in mice, and none has reported demand functions. Using albino (CD1) male mice, the present study compares food intake and meal patterns across a series of ratio cost schedules. The first experiment examined unit price. A closed economy was used in which the mice were in the test chambers for 23 h/day and earned all of their food via either a nose poke or lever press response under fixed (FUP5, FUP10, FUP25, FUP50), variable (VUP10, VUP20, VUP50), and progressive (PUP1.25, PUP1.5, PUP1.75) unit prices. Mice were run for 4 days at each cost. There were no consistent differences between the first and last day indicating that behavioral adjustments to schedule changes occurred rapidly. When averaged across all price schedules, mice in the nose poke group consumed more food than their lever press counterparts but the overall shapes of the demand curves did not differ between the two operant responses...
Why are emerging economies excessively
vulnerable to shocks to external funding? What was the role
of financial flows from emerging to developed economies in
setting the stage for the subprime crisis? This paper
addresses these questions in a simple general equilibrium
framework that emphasizes the aggregate implications of the
misallocation of funds on the micro level. The analysis
shows that the misallocation of funds amplifies volatility
even in a closed economy. Financial integration between
relatively distorted emerging economies and relatively
undistorted developed economies leads to a further
divergence in volatility, thereby providing a new and simple
explanation for the divergent trends in output volatility up
to the recent crisis. In the integrated environment, cheap
funding leads to an endogenous deterioration of the
financial system in developed economies. These predictions
are consistent with a wide variety of microfoundations, in
which distortions cause productive projects to be relatively
more sensitive to aggregate shocks. The paper provides some
empirical evidence for these microfoundations.
This paper shows that real exchange rate
undervaluation through the accumulation of foreign reserves
may improve welfare in economies with learning-by-investing
externalities that arise disproportionately from the
tradable sector. In the presence of targeting problems or
when policy choices are restricted by multilateral
agreements, first-best policies such as subsidies to capital
accumulation, or subsidies to tradable production are not
feasible. A neo-mercantilist policy of foreign reserve
accumulation "outsources" the targeting problem or
overcomes the multilateral restrictions by providing loans
to foreigners that can only be used to buy up domestic
tradable goods. This raises the relative price of tradable
versus non-tradable goods (i.e. undervalues the real
exchange rate) at the static cost of temporarily reducing
tradable absorption in the domestic economy. However, since
the tradable sector generates greater learning-by-investing
externalities, it leads to dynamic gains in the form of
higher growth. The net welfare effects of reserve
accumulation depend on the balance between the static losses
from lower tradable absorption versus the dynamic gains from
This paper develops a dynamic general equilibrium model to explore industrial evolution and economic growth in a closed developing economy. The authors show that industries will endogenously upgrade toward the more capital-intensive ones as the capital endowment becomes more abundant. The model features a continuous inverse-V-shaped pattern of industrial evolution driven by capital accumulation: As the capital endowment reaches a certain threshold, a new industry appears, prospers, then declines and finally disappears. While the industry is declining, a more capital-intensive industry appears and booms, ad infinitum. Explicit solutions are obtained to fully characterize the whole dynamics of perpetual structural change and economic growth. Implications for industrial policies are discussed.
The authors present a model of endogenous growth in which the main engine of economic development is knowledge. Using a two-sector closed economy model that comprises of a conventional goods-producing sector and a research and development sector, their model incorporates two key aspects of knowledge: technology and human capital. Steady-state equilibrium conditions show that the growth rate of per capita income hinges on the growth rate of human capital. While the growth rate of human capital has been previously shown to affect the growth of the economy in transition between steady states or balanced growth paths, the authors are the first to link the growth rate of human capital to the steady-state growth rate of productivity and output per worker. Furthermore, this result does not exhibit scale effects or policy invariance, both of which have been longstanding concerns with the predictions of endogenous growth models developed in the 1990s.
Exact optimal paths are calculated for a closed economy with human made capital, non-renewable resource depletion and exogenous technical progress in production, hyperbolic utility discounting, and (possibly) hyperbolic technical progress. On its optimal path, generally, welfare-equivalent income > wealth equivalent income > Sefton-Weale income > NNP, with possibly dramatic differences among these measures; and sustainable income can be greater, equal or less than NNP. This supports the view that there can be no best, exact definition of income. For low enough discounting, growth is optimal even when technical progress is zero. A particular discount rate makes all income measures and consumption constant and (except NNP) equal; and zero technical progress then gives the Solow (1974) maxim in as a special case. General problems with calculating sustainable income when there is technical progress are discussed, and the optimal path is time-consistent if the discount rate can depend on the economy’s stocks and absolute time.; yes
One of the world's largest economies, India has made tremendous strides in its economic and social development in the past two decades, and is poised to realize even faster growth in the years to come. After growing at about 3.5 percent from the 1950s to the 1970s, India's economy expanded during the 1980s to reach an annual growth rate of about 5.5 percent at the end of the period. It increased its rate of growth to 6.7 percent between 1992-93 and 1996-97, as a result of the far-reaching reforms embarked on in 1991 and opening up of the economy to more global competition. Its growth however, dropped to 5.5 percent from 1997-98 to 2001-02, and to 4.4 percent in 2002-03, due to the impact of poor rains on agricultural output. But India's economy surged ahead to reach a growth rate of 8.2 percent in 2003-04, in line with growth projections cited in its Tenth Five-Year Plan, which calls for increasing growth, to an average of 8 percent between 2002-03 and 2006-07 (India, Planning Commission, 2002e). Such sustained acceleration is needed to provide opportunities for India's growing population, and its even faster-growing workforce. The time is opportune for India to make its transition to the knowledge economy-an economy that creates, disseminates...
Although Brazil has become one of the
largest economies in the world, it remains among the most
closed economies as measured by the share of exports and
imports in gross domestic product. This feature cannot be
explained simply by the size of Brazils economy. Rather, it
is due to an economic structure reliant on domestic value
chain integration as opposed to participation in global
production networking. It also reflects more generally an
export base that shows lack of dynamism. Opening up and
moving toward integration into global value chains could
produce efficiency gains and help Brazil address its
productivity and competitiveness challenges.
The paper extends Bernanke and
Mihov's  closed-economy strategy for identification
of monetary policy shocks to open-economy settings,
accounting for the simultaneity between interest-rate and
exchange-rate innovations. The methodology allows a separate
treatment of two distinct monetary policy shocks, one that
operates through open market operations, and another one
that takes place through interventions in the foreign
exchange market. Implementation of this strategy to the case
of Argentina provides the stylized facts necessary to choose
among competing theoretical models of this economy. In
addition to studying the effects of monetary policy
innovations, the present study sheds light on the endogenous
component of monetary policy. In this regard, the paper
finds that, notwithstanding the relative stability of the
exchange rate and the accumulation of large amounts of
international reserves, the central bank in Argentina has
been far from absorbing balance of payments shocks in a
currency-board fashion. The growing level of international
reserves can be rationalized...
In the global knowledge economy of the
twenty-first century, India's development policy
challenges will require it to use knowledge more effectively
to raise the productivity of agriculture, industry, and
services and reduce poverty. India has made tremendous
strides in its economic and social development in the past
two decades. Its impressive growth in recent years-8.2
percent in 2003-can be attributed to the far-reaching
reforms embarked on in 1991 and to opening the economy to
global competition. In addition, India can count on a number
of strengths as it strives to transform itself into a
knowledge-based economy-availability of skilled human
capital, a democratic system, widespread use of English,
macroeconomic stability, a dynamic private sector,
institutions of a free market economy; a local market that
is one of the largest in the world; a well-developed
financial sector; and a broad and diversified science and
technology infrastructure, and global niches in IT.
The pigeon's response to increasing fixed-ratio schedules in a 24-hr closed economy is marked by changes in feeding behavior during the daily light phase and by changes in body temperature during the dark phase. The time course of these responses to increasing behavioral cost of obtaining food is very different. Feeding is most affected immediately, within the first day of exposure to moderate fixed ratios. The number of times the pigeons produce the food hopper each day decreases, and the rate at which they eat from the food hopper (grams per minute) when it is available increases, as the fixed ratio is raised. Body temperature is affected later, falling to progressively lower resting levels during the dark phase as body weight drops at the higher fixed ratios when food intake is reduced. The changes in feeding and in body temperature that occur as the fixed-ratio schedule increases seem to reduce daily energy expenditures, within the constraints imposed by the experiment. The ascending and descending limbs of the bitonic function obtained when total daily operant responding is plotted as a function of fixed-ratio schedule in the closed economy is possibly related to the occurrence of thermoregulatory strategies for energy conservation. The energetic analysis of performances in the closed economy requires consideration of a variety of energetic strategies available to the species being studied.
Open and closed economies have been assumed to produce opposite relations between responding and the programmed density of reward (the amount of reward divided by its cost). Experimental procedures that are treated as open economies typically dissociate responding and total reward by providing supplemental income outside the experimental session; procedures construed as closed economies do not. In an open economy responding is assumed to be directly related to reward density, whereas in a closed economy responding is assumed to be inversely related to reward density. In contrast to this predicted correlation between response-reward relations and type of economy, behavior regulation theory predicts both direct and inverse relations in both open and closed economies. Specifically, responding should be a bitonic function of reward density regardless of the type of economy and is dependent only on the ratio of the schedule terms rather than on their absolute size. These predictions were tested by four experiments in which pigeons' key pecking produced food on fixed-ratio and variable-interval schedules over a range of reward magnitudes and under several open- and closed-economy procedures. The results better supported the behavior regulation view by showing a general bitonic function between key pecking and food density in all conditions. In most cases...
In two experiments, rats living in a closed economy were offered continuous, concurrent access to four resources: food, water, a nest, and a running wheel. Costs of consuming food and water were imposed with bar-press requirements, and the price of either one or both resources was raised. As the consumption cost increased, less was consumed in each bout of resource use. Bout frequency increased, but not sufficiently to compensate for the fall in bout size, and total intake fell. Food and water tended to be complementary resources, in that as intake of one fell with its price, intake of the other also decreased. This interaction was accounted for by the defense of the ratio of body water to lean body mass. As amount consumed decreased, increases in feed efficiency (weight gain per unit of food ingested) and the use of stored calories compensated for the reduced energy intake. There was evidence of competition between feeding and drinking at the higher costs: When both commodities were expensive, the decline in the intake of each one was greater than when only one commodity was expensive. Although the time spent nesting, running, and in unmonitored activity was adjusted when feeding or drinking took more of the rat's day, there was no particular activity that was sacrificed.
Three experiments were conducted to study the effect of an imperfect substitute for food on demand for food in a closed economy. In Experiments 1 and 2, rats pressed a lever for their entire daily food ration, and a fixed ratio of presses was required for each food pellet. In both experiments, the fixed ratio was held constant during a daily session but was increased between sessions. The fixed ratio was increased over a series of daily sessions once in the absence of concurrently available sucrose and again when sucrose pellets were freely available. For both series, increases in the fixed ratio reduced food intake, but body weight was reduced only in the no-sucrose condition. In the sucrose condition, body weight and total caloric intake (sucrose plus food) were relatively unaffected by increases in the fixed ratio. At all fixed ratios, food intake was proportionally reduced by the intake of sucrose. In Experiment 3, monkeys obtained food or saccharin by pressing keys; the fixed ratio of presses per food pellet was increased once when tap water was each monkey's only source of fluid, again when each monkey's water was sweetened with saccharin, and a third time when each monkey had concurrent access to the saccharin solution and plain water. Increases in the fixed ratio...
Three pigeons responded for food reinforcement on multiple variable-interval schedules in which the total consumption of food was entirely determined by the subjects' interaction with the schedules (a closed economy). The finding of overmatching, where response allocation between components is more extreme than the distribution of reinforcers, was reconfirmed. Generalized-matching sensitivity decreased from overmatching to undermatching values typical of conventional multiple schedules when food deprivation was increased by decreasing session duration, but not when deprivation was increased by decreasing overall reinforcer rate. Sensitivity also increased from undermatching to overmatching as session duration increased from 100 min to 24 hr, while deprivation was held constant by decreasing overall reinforcer rate. These results can be understood in terms of increases in the value of extraneous reinforcers relative to food reinforcers as deprivation decreases or as the economy for extraneous reinforcers becomes more closed. However, no published quantitative expression of the effects of extraneous reinforcers is entirely consistent with the results.
The exponential demand equation proposed by Hursh and Silberberg (2008) provides an estimate of the essential value of a good as a function of price. The model predicts that essential value should remain constant across changes in the magnitude of a reinforcer, but may change as a function of motivational operations. In Experiment 1, rats' demand for food across a sequence of fixed-ratio schedules was assessed during open and closed economy conditions and across one- and two-pellet per reinforcer delivery conditions. The exponential equation was fitted to the relation between fixed-ratio size and the logarithm of the absolute number of reinforcers. Estimates of the rate of change in elasticity of food, the proposed measure of essential value, were compared across conditions. Essential value was equivalent across magnitudes during the closed economy, but showed a slight decrease across magnitudes during the open economy. Experiment 2 explored the behavioral mechanisms of nicotine's effects on consumption with the results from Experiment 1 serving as a within-subject frame of reference. The same subjects were administered nicotine via subcutaneously implanted osmotic minipumps at a dose of 3 mg/kg/day and exposed to both the one- and two-pellet conditions under a closed economy. Although nicotine produced large decreases in demand...
The authors provide a framework with which to analyze growth in a small economy with perfect capital mobility. The framework provides a diagrammatic representation of steady states that differs in interesting and important ways from the usual closed-economy Solow-Swan diagram. The authors use the key diagrams to illustrate the effects of changes in parameters such as the saving rate and productivity growth on steady-state values of macroeconomic aggregates. They compare the steady-state results for the open economy with those obtained using the more familiar closed-economy model. They illustrate the possibility of endogenous income growth.