Ideology and endogenous constitutions

We study a legislature where decisions are made by playing an agenda-setting game. Legislators are concerned about their electoral prospects but they are also genuinely concerned for the legislature to make the correct decision. We show that when ideological polarization is positive but not too large (and the status quo is extremely inefficient), institutions in which the executive has either no constraints (autocracy) or many constraints (unanimity) are preferable to democracies that operate under an intermediate number of constraints (simple majority rule). When instead ideological polarization is large (and the status quo is only moderately inefficient), simple majority turns out to be preferable.     

Foreign direct investment under oligopoly: Profit shifting or profit capturing?

In this paper a model of taxation of foreign source corporate income is developed when the output market is not perfectly competitive. Profit shifting policies, similar to those in the new trade literature, are also present in the case of foreign direct investment (FDI). There are, however, important differences to the new trade theory since in case of FDI, (i) corporate taxation and double taxation relief are the policy instruments rather than output or revenue taxes, (ii) countries are not symmetric in the sense that the host country has the first right to tax the multinational's profit and the home country reacts by providing double taxation relief, and (iii) output but not corporate taxation is specific to imperfectly competitive industries. It is argued that (a) variants of a tax credit are analogous to export subsidies, (b) when the home country operates a tax credit system the host country's incentive to capture the multinational's profit is bounded under imperfect competition, (c) when the host country offers a tax holiday the home country should imitate this policy, and (d) in the presence of perfect competitive industries, double taxation relief is a good instrument to target imperfectly competitive industries.     

Estimating inequality in the distribution of welfare using demand models

In this paper two demand models with general household equivalence scales (GES) are estimated. These GES are identifiable, since they have the independence of base utility (IB) or equivalence scales exactness (ESE) property. Estimates of household characteristics adjusted income can then be calculated relative to a specific household type. This “individual equivalent income (IEI) is then used to calculate measures of inequality in the distribution of welfare. As more than one model is estimated, the sensitivity of these estimates to model specification changes can be considered. Comparisons are also made to estimates of inequality based on household income. It is found that absolute inequality is sensitive to model specification, but relative inequality is not. This is true using indices of inequality of the Atkinson (1970), Kolm (1976a,b) and Sen (1973) type, or more general measures of inequality based on estimates of Lorenz curve decile ordinates, constructed using methods introduced by Beach and Davidson (1983). Thus, if absolute measures of inequality are required, these results suggest some further research is required to determine a class of models which is less sensitive to model specification error. However, if only relative measures of inequality are needed, then estimates of inequality appear to be very robust to the choice of model specification.     

区域经济发展综合效益及其协调程度研究：以陕西省“八五”时期为例

本文提出“综合效益协调度”和“综合效益协同度”两个新指数。分别用来衡量综合效益发展水平及发展过程的协调程度。同时,选取具有较好代表性的指标群,对陕西省各地市“八五”期间经济发展的综合效益水平、综合效益协调程度、综合效益递增幅度及递增过程中的协同程度等进行了分析。并指出存在的问题和可能的对策。     

Dynamic conditional score models: a review of their applications

ABSTRACT

In this paper, applications of dynamic conditional score (DCS) models are reviewed and those models are discussed in relation to classical time series models from the literature. DCS models are robust to outliers, which improves their statistical performance compared to classical models. Three applications are presented in order to compare the statistical performances of DCS and classical models in three very different contexts: (i) The QAR (quasi-autoregressive) plus Beta-t-EGARCH (exponential autoregressive conditional heteroscedasticity) model is presented, which is a score-driven expected return plus volatility model. This model is used for daily returns on the DAX (Deutscher Aktienindex) equity index for the period of January 1988 to December 2017. (ii) The score-driven local level and seasonality plus Beta-t-EGARCH model is presented, which is used for daily AFN/USD (Afghan Afghani/United States Dollar) currency exchange rates for the period of March 2007 to July 2017. (iii) The Seasonal-t-QVAR (quasi-vector autoregressive) model is presented, which is a score-driven multivariate dynamic model of location. For this model, monthly US inflation rate and US unemployment rate are used for the period of January 1948 to December 2017. For all applications, the statistical performance of each DCS model is superior to that of a corresponding classical alternative.     

ON EXPORT-LED GROWTH IN AUSTRALIA AND CANADA: COINTEGRATION, CAUSALITY AND STRUCTURAL STABILITY*

This paper uses cointegration and vector-error correction (VEC) modelling to investigate whether the export-led growth hypothesis applies to Australian and Canadian exports and labour productivity. The Johansen (1988) procedure is used to test whether manufacturing and aggregate measures of exports and labour productivity are cointegrated. Exports and labour productivity are found to be cointegrated, suggesting the export-led growth hypothesis holds for the small, open Australian and Canadian economies, although the estimated cointegrating vectors suggest the relationship is of small order. The tests suggested in Hansesn (1992), for parameter stability in relationships with I(1) variables, are estimated to examine if the parameters estimated from the Johansen procedure are unstable and whether the null of cointegration can be rejected in favour of structural change. No evidence is found of parameter instability in either the Australian or Canadian long-run relationships at conventional significance levels. Estimation of VEC models suggests that exports are seen to cause productivity growth, although the quantitative impacts are again small. The reverse causality is rejected for both countries, except for the Canadian manufacturing sector for which there is a small, significant positive effect of labour productivity on manufactured exports.     

The scope of satisfactory mechanisms for the provision of public goods

This paper establishes the existence of satisfactory public-good provision mechanisms when utilities are nonseparable. The assumptions used to obtain this result are: (1) that the public good is continuously variable; (2) that utility functions are parametrically representable and twice continuously differentiable; and (3) that the provision rule is a strictly increasing function of the reported marginal rates of substitution between the public good and the private good. The satisfactory mechanisms derived are all augmented Groves mechanisms and are equivalent to Groves mechanisms if, and only if, each consumer's utility function is additive in income.     

Productivity, exporting, and the learning-by-exporting hypothesis: direct evidence from UK firms

Abstract.  Case studies suggest exporters learn from clients. Econometric evidence is mixed. We use firm-level panel data on exporting and productivity with direct information on learning sources, including clients. We find: (a) firms who exported in the past are likely to learn more from clients (relative to other sources); (b) firms who learned from clients in the past are more likely to have faster productivity growth; (c) the reverse is not the case; that is, past productivity growth is not associated with more learning from clients and past learning from clients is not associated with more exporting. These results are consistent with the learning-by-exporting hypothesis.     

Cross-border mergers and strategic alliances

This paper develops a model with distribution costs to study firm cooperation in forming strategic alliances and mergers, under different types of foreign market entry modes, that is, export or foreign direct investment (FDI). Under both export and FDI, we find that cross-border alliances (mergers) dominate domestic alliances (mergers); and cross-border alliances and mergers are preferred to independence if and only if distribution cost is high. Under export, cross-border alliances are chosen in equilibrium if distribution cost is high. Under FDI and with high distribution cost, cross-border alliances (mergers) are chosen in equilibrium if plant setup cost is low (high).     

Identifying critical success factors in defense development projects: A multivariate analysis

The main goal of this article is to identify managerial variables that are critical to the success of defense projects. This study analyzes 110 defense projects executed in Israel over the last 20 years. Some 400 managerial variables were collected, and 20 measures of success derived for each project. Multivariate analysis is employed to account simultaneously for the diverse attributes of projects' success.The major results of this study are: (1) in the military environment, the more urgent is the perceived need for the project's output, the greater is the project's chance to succeed; (2) the customer follow-up team has a major role in determining project success—especially important are the team members' professional qualifications and sense of responsibility for project success and the stability of key personnel; (3) defense projects are often technologically challenging; proven technological feasibility at the start of a project is critical to its success; (4) attention to design considerations (produceability, quality, reliability, and design to cost) in the early phases of development are critical to project success; and (5) the professional qualifications and team spirit of the development team are highly correlated with success.     

Misleading Inferences from Panel Unit-Root Tests with an Illustration from Purchasing Power Parity

Simulations demonstrate that when unit-root behavior is rejected in a Levin and Lin panel test, it is incorrect to infer that all series are stationary. Recent tests proposed by Im, Pesaran and Shin, and by Sarno and Taylor, are also incapable of determining the mix of I (0) and I (1) series in a panel setting. This paper introduces a new unit-root test that allows the researcher to discern which series are I (0) and which ones are I (1). The test has double to triple the power of single-equation augmented Dickey–Fuller tests.     

A comparison of cardinal tournaments and piece rate contracts with liquidity constrained agents

A celebrated result in the theory of tournaments is that relative performance evaluation (tournaments) is a superior compensation method to absolute performance evaluation (piece rate contracts) when the agents are risk-averse, the principal is risk-neutral or less risk-averse than the agents and production is subject to common shocks that are large relative to the idiosyncratic shocks. This is because tournaments get closer to the first best by filtering common uncertainty. This paper shows that, surprisingly, tournaments are superior even when agents are liquidity constrained so that transfers to them cannot fall short of a predetermined level. The rationale is that, by providing insurance against common shocks through a tournament, payments to the agents in unfavorable states increase and payments in favorable states decrease which enables the principal to satisfy tight liquidity constraints for the agents without paying any ex ante rents to them, while simultaneously providing higher-power incentives than under piece rates. The policy implication of our analysis is that firms should adopt relative performance evaluation over absolute performance evaluation regardless of whether the agents are liquidity (wealth) constrained or not.     

Optimal tax theory: A synthesis

Necessary conditions for optimal taxation are derived (i) when taxes are constrained to be linear, (ii) when the form of taxation is unconstrained, (iii) when some commodities are subject to nonlinear taxation, the remainder to proportional taxation. Among the results obtained are several that help to determine upon which commodities the tax system ought to bear most heavily. In particular, a criterion for the effect of commodity taxes in the presence of an optimal income tax is found. The paper concludes with a general principle of simple form for optimal economic policies of all kinds.     

Labor Mobility, Trade, and Social Capital

Labor market integration raises welfare in the absence of distortions. This paper examines labor and goods market integration in a general‐equilibrium model with social capital. The findings are: (i) labor market integration has an ambiguous impact on welfare, and raises it if the goods and labor skills are sufficiently different; (ii) compared to Pareto optimum, labor mobility (social capital) is excessively large (depleted); (iii) trade is superior to labor market integration if trading costs are no higher than private migration costs, otherwise the outcome is ambiguous; and (iv) the creation of new institutions in response to labor market integration has an ambiguous impact on welfare.     

It's all about mechanisms – what process-tracing case studies should be tracing

ABSTRACT

Process-tracing (PT) as a distinct case-study methodology involves tracing causal mechanisms that link causes (X) with their effects (i.e. outcomes) (Y). We trace causal mechanisms whereby a cause (or set of causes) produces an outcome to both: (1) make stronger evidence-based inferences about causal relationships because the analysis produces within-case evidence of each step of the causal process (or absence thereof) in between a cause and outcome, and (2) because tracing mechanisms gives us a better understanding of how a cause produces an outcome. Yet, when we look at the methodological literature on PT, there is considerable ambiguity and discord about what causal mechanisms actually are. The result of this ambiguity and discord about what mechanisms are clearly maps onto existing applications of PT, with most PT case studies completely ignoring the underlying theoretical causal processes. In the few PT applications where mechanisms are unpacked, they are typically only developed in a very cursory fashion, with the result that there is considerable ambiguity about what theoretical process the ensuing case study actually is tracing. If we want to claim we are tracing causal mechanisms, the causal processes in between X and Y need to be unpacked theoretically. How can we claim we are tracing a causal ’process’ when we are not told what the process (i.e. mechanism) actually is? To alleviate this problem, the article attempts to develop a clearer definition of causal mechanisms to provide scholars with a framework for theorising mechanisms in a fashion that is amenable to in-depth empirical analysis using PT.     

Discriminating between alternative measures of over-education

Five over-education measures are evaluated empirically on the basis of encompassing tests. The measures are based on job analysis (JA), worker-assessment of the required level to do the job (WAd), worker-assessment of the required level to get the job (WAg), the mean educational level of realized matches (RMmn), and the modal level of realized matches (RMml). Over- and under-education are linked to wages, job satisfaction, mobility and training participation. For none of the outcome variables, the JA model is encompassed by another model. Given the risk on systematic errors, this is a sufficient condition to prefer a carefully conducted JA to any other measure. The most reliable solution is to use the JA measure as an instrument for the WAd measure.     

考虑港口收费管制的进出口贸易竞争研究

考虑港口的收费管制因素,建立了进出口贸易竞争模型。该模型由一个出口国和两个进口国组成,且各国都拥有一个港口,位于出口国的两家公司均向两个进口国销售商品,并在各个进口国展开市场竞争（古诺竞争或伯川德竞争）,各贸易国的港口根据其是否存在价格管制确定港口收费。针对进出口公司的每种竞争模式,得到了不同的港口收费管制组合下各贸易国的港口收费、港口利润和社会福利,并将竞争均衡结果进行了比较。研究发现： （1）在进出口公司古诺竞争模式下,若三个贸易国的港口都无收费管制（有收费管制）且进出口产品的差异较大 （小）时,各贸易国的社会福利和港口利润均更高; （2）在进出口公司伯川德竞争模式下,若进出口产品的差异较大 （小）,则出口国的港口利润主要取决于港口收费 （贸易量）,而进口国恰好相反; （3）当进出口产品的差异较大 （小）时,进出口公司在古诺 （伯川德）竞争模式下各贸易国的社会福利、港口利润以及港口使用费都更高。     

能够为母公司创利的IBM实验室

多年来IBM不但是世界获得专利最多的高技术企业，而且它的实验室能为母公司盈得巨额利润，本文总结了该公司的成功经验，主要是：（一）研发资金雄厚；（二）有一大批高水平的科学家；（三）研发以市场为导向；（四）从管理体制上确保研发的经济效益；（五）强调基础研究的重要作用。（六）突出计算机服务业；（七）利用公关造势。     

What are the ethics of welfare economics? And,are welfare economists utilitarians?

Four questions: (1) What is welfare economics? (2) Is it an ethical system?  (3) How do welfare economists differ from one another? And (4), how do they differ from other economic ethicists? Then utilitarianism is discussed. I was taught, and have inferred to others, that welfare economists are utilitarians. They are not. Welfare economics is an atypical form of welfare consequentialism: consequentialist in that whether an act or policy is right or wrong is a function of only its consequences—the adjective “welfare” because the only consequences that matter are the welfare (well-faring) consequences. Most welfare consequentialists are neither welfare economists nor utilitarians. And, most moral philosophers are not welfare consequentialists—neither are most normal folk.     

Purchasing power parity and the role of traded goods: evidence from EU states

In this paper the debate on purchasing power parity (PPP) is considered by providing results with disaggregated price data from European countries. The disaggregation of the price data is important because it allows for the consideration of goods that are likely tradable (e.g., fruits) with goods that are not tradable (e.g., hotel rooms). The European focus is important because these results are able to shed light on the effect of the type of exchange rate regime, member of exchange rate mechanism (ERM) or not.