FROM EXPERIENCE The Customer's Eye View of Innovation

Currently, "working close to the market" is in vogue. Yet often we ignore the single most important premise of this basic operating philosophy. Donald Potter reminds us that it is essential that our new product development efforts key on the basic principle of lowering our customers' costs. He describes one way to achieve this objective while referencing his study of over 500 corporate strategies. Too often, marketing research investigates customers' reactions to existing products, not future needs. A better approach is to develop a deep understanding of the customers' economics of using a product over its entire lifetime.     

Cutting-edge technologies

The past 20 years have witnessed a revolution in high-speed rail technologies. More esoteric technologies such as MAGLEV now seem like technological dead-ends. However, there have been failed projects as well as successes, and the management of technological innovation has played a crucial role. The development of high speed trains illustrates the constraints and direction provided by social, political, economic and managerial factors, and their interplay.     

OPTIMAL LIQUIDITY IN PERSONAL FINANCIAL PLANNING

This paper investigates the question of optimal portfolio liquidity in a personal financial planning framework. The difficulties encountered in answering this question are discussed, liquidity is defined, and a variety of motives for maintaining liquidity are examined in depth. The major thrust of the paper is the development of a theoretical model of liquidity needs, which is then simplified in a stepwise manner through the inclusion of cash substitutes, need interdependence, and other devices. It is concluded that a significantly reduced liquidity needs model is hypothetically possible, permitting the planner to think in terms of substantially smaller client cash balances.     

The Expanding Techniques of Progress: Agricultural Biotechnology and UN-REDD+

This paper provides a comparative analysis of agricultural biotechnology and the United Nations program for reduced emissions from deforestation and forest degradation (REDD). Despite the existing differences between the technical manipulation of biological systems and a conservation program aimed at reducing carbon and protecting forests, the two share commonalities in ideological origin, application, and values. Presented as positive developments, both seek to address large-scale issues such as global hunger and climate change, but while receiving national and international support they remain controversial issues. Both issues are critically assessed, beginning with a brief history, followed by the application of William Dugger's four invaluation processes: contamination, subordination, emulation, and mystification. This approach unravels the subtle social power of state and market forces that seek to control genetic material and forest frontiers as new outlets for growth and investment.     

The risks and rewards of design investment

Cutbacks in design investment are often made in a time of recession because managers, when faced with competing demands, are unaware of the commercial value of such investment The research reported in this paper investigated the risks and rewards of investing in professional design expertise at a project or product level and found that such investment involves relatively low risks and can yield substantial rewards by opening up new markets and enhancing profitability However, management skills are needed to fully exploit design expertise Proper briefing of designers, regular communication between marketing, design and production, and effective project management can make the difference between success and failure     

Misallocation and productivity effects of the Smoot–Hawley tariff

Using a newly created microeconomic archive of US imports at the tariff line level for 1930–1933, we construct industry-level tariff wedges incorporating the input–output structure of US economy and the heterogeneous role of imports across sectors of the economy. We use these wedges to show that the average tariff rate of 46% in 1933 substantially understated the true impact of the Smoot–Hawley (SH) tariff structure, which we estimate to be equivalent to a uniform tariff rate of 70%. We use these wedges to calculate the impact of the Smoot–Hawley tariffs on total factor productivity and welfare. In our benchmark parameterization, we find that tariff protection reduced TFP by 1.2% relative to free trade prior to the Smoot–Hawley legislation. TFP fell by an additional 0.5% between 1930 and 1933 due to Smoot–Hawley. We also conduct counterfactual policy exercises and examine the sensitivity of our results to changes in the elasticity of substitution and the import share. A doubling of the substitution elasticities yields a TFP decline of almost 5% relative to free trade, with an additional reduction due to SH of 0.4%.     

Opinion Divergence Among Professional Investment Managers

Abstract:  We find that opinion divergence among professional investment managers is commonplace, using a large sample of transaction-level institutional trading data. When managers trade together, future returns are similar regardless if they are all buying or selling, inconsistent with the notion that professional investment managers possess stock picking ability or private information that is of investment value. However, when managers trade against each other, subsequent returns are low, especially for stocks that are difficult to short. This U-shaped disagreement-return relationship is consistent with Miller's (1977) hypothesis that, in the presence of short-sale constraints, opinion divergence can cause an upward bias in prices.