This paper simulates the impact of a permanent fertility shock on economic growth, using endogenous versus exogenous growth OLG models. An endogenous growth model, with education as the engine of growth, dampens the negative impact of a decline in fertility on growth when compared with an exogenous growth model. This result stems from the rise in education levels brought about by the expectatio...

For a general class of risk models, the dividends-penalty identity is derived by probabilistic reasoning. This identity is the key for understanding and determining the optimal dividend barrier, which maximizes the difference between the expected present value of all dividends until ruin and the expected discounted value of a penalty at ruin (which is typically a function of the deficit at ruin...

Recently there has been much interest in modeling the activity of primate midbrain dopamine neurons as signalling reward prediction error. But since the models are based on temporaldi!erence (TD) learning, they assume an exponential decline with time in the value of delayed reinforcers, an assumption long known to con#ict with animal behavior. We show that a variant of TD learning that tracks v...

Acquiring a reputation for high quality is especially urgent for producers in markets for durable goods with quality characteristics that remain uncertain over the product’s life. Using data from the U.S. automobile industry, our empirical evidence shows that a poor reputation associated with U.S. autos during the early 1980’s has persisted in reducing prices of more recent models, despite qual...