VIENNA JOINT ECONOMICS SEMINAR	INVITATION
The University of Vienna and the Institute for Advanced Studies cordially invite you to the following Vienna Joint Economics Seminar Thursday, June 16, 2016 University of Vienna, Oskar-Morgenstern-Platz 1, 1090 Vienna, HS 15, 2nd floor 4:00 pm Larry Blume and                        Klaus Ritzberger Cornell University and IHS                                            (IHS and VGSF) A Case for Incomplete Markets (Larry Blume) The First Welfare Theorem in economies with heterogeneous beliefs states that competitive equilibria are (under the usual assumptions) ex ante optimal.  Is the Pareto criterion useful in such economies?  Our answer is "no''.  We explain why the Pareto criterion gives intuitively bad answers to welfare questions, and show how in such economies trading restrictions of various kinds give welfare improvements according to several more sensible welfare criteria. paper jointly with Tim Cogley, David Easley, Thomas Sargent and Viktor Tsyrrenikov and The Curse of Poverty and the Blessings of Wealth (Klaus Ritzberger) If productivity in a society is low, then the only equilibrium involves inefficiently selfish (autarkic) behavior. If productivity is sufficiently high, then there are several equilibria that realize substantial welfare gains through reciprocal behavior. Equilibria for productive societies are distinguished by how they treat the wealth distribution. While conservative societies preserve the distribution, egalitarian behavior further improves welfare by transfers. Yet, both conservative and egalitarian (productive) societies exclude the poorest, even though that involves a welfare loss. So, there are a social and an individual poverty trap. The first is technological, the second behavioral. paper jointly with Larry Blume We are looking forward to seeing you! Institute for Advanced Studies Josefstädter Straße 39, 1080 Vienna, Austria Tel.: +43 1 599 91 145 e-Mail: economics@ihs.ac.at http://www.ihs.ac.at		LINKS DIRECTIONS TO UNIVERSITY OF VIENNA on Google maps VIENNA JOINT ECONOMICS SEMINAR on Google calendar ECONOMICS SEMINARS IN VIENNA on Google calendar Institute for Advanced Studies @IHS_Vienna
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