Academic freedom,private‐sector focus,and the process of innovation

We develop a model that clarifies the respective advantages and disadvantages of academic and private‐sector research. Rather than relying on lack of appropriability or spillovers to generate a rationale for academic research, we emphasize control‐rights considerations, and argue that the fundamental tradeoff between academia and the private sector is one of creative control versus focus. By serving as a precommitment mechanism that allows scientists to freely pursue their own interests, academia can be indispensable for early‐stage research. At the same time, the private sector's ability to direct scientists toward higher‐payoff activities makes it more attractive for later‐stage research.     

Marx's critique of “eternal” political economy: how Mill is alien to Marx's attacks

Marx deplored political economy's claims to establish “eternal” – or “natural” – laws. This paper seeks to defend John Stuart Mill from his critique. It argues that, contrary to what Marx alleged, these two economists have a great deal more in common on this topic than is frequently realised. Both on the theoretical level and on the political one, Mill's views about the relativity of capitalism seem very close to Marx's. This paper also suggests that Marx may have ignored Mill's insistence on the relativity of economic theories because it may have challenged his own “scientific socialism”.     

Education Subsidies, Social Security and Growth: The Implications of a Demographic Shock

We develop a three-period overlapping-generations model in which individual decisions about education are the engine of growth. In this setting, we investigate the normative role of education subsidies and old age pensions. Calibrating this model on empirical data, it is shown that the case for positive pension benefits is rather weak on the optimal path. An important part of education subsidies should be financed by lump-sum taxes on retirees. We also examine how these transfers should be adjusted in the presence of a baby boom-baby bust demographic shock. It turns out that an appropriate policy could be to increase education when the baby-boom generation is at work. Labor productivity will then be higher when aging peaks so that the pension bill can be financed without reducing welfare for the baby-bust generations.
JEL classification : O 41; J 24; E 62     

A High‐Frequency Investigation of the Interaction between Volatility and DAX Returns

One of the most noticeable stylised facts in finance is that stock index returns are negatively correlated with changes in volatility. The economic rationale for the effect is still controversial. The competing explanations have different implications for the origin of the relationship: Are volatility changes induced by index movements, or inversely, does volatility drive index returns? To differentiate between the alternative hypotheses, we analyse the lead‐lag relationship of option implied volatility and index return in Germany based on Granger causality tests and impulse‐response functions. Our dataset consists of all transactions in DAX options and futures over the time period from 1995 to 2005. Analyzing returns over 5‐minute intervals, we find that the relationship is return‐driven in the sense that index returns Granger cause volatility changes. This causal relationship is statistically and economically significant and can be clearly separated from the contemporaneous correlation. The largest part of the implied volatility response occurs immediately, but we also observe a smaller retarded reaction for up to one hour. A volatility feedback effect is not discernible. If it exists, the stock market appears to correctly anticipate its importance for index returns.     

Exchange rate volatility and productivity growth: The role of financial development

The vast empirical exchange rate literature finds the effect of exchange rate volatility on real activity to be small or insignificant. In contrast, this paper offers empirical evidence that real exchange rate volatility can have a significant impact on productivity growth. However, the effect depends critically on a country's level of financial development. The results appear robust to time window, alternative measures of financial development and exchange rate volatility, and outliers. We also offer a simple monetary growth model in which real exchange rate uncertainty exacerbates the negative investment effects of domestic credit market constraints.     

Positioning of the stakeholders in the interaction project management–project marketing: A case of a coconstructed industrial project

Based on a business‐to‐business (B‐to‐B) case within the automotive industry, this study proposes logics (constructivist and determinist, respectively) of protagonists and highlights the complexity of their dynamics during the successive project's phases. The concept of milieu will emphasize the complex business in which project marketing takes place; notably, it allows better identification of relevant relationships. Our article focuses on this concept of milieu with regard to the interactions between project marketing and project management actors during project phases. In particular, this article underlines the difference and the accommodation between the dynamics of interaction and the dynamics of congruence of marketing and management logics.     

Measuring and Accounting for the Deprivation Gap of Portuguese Immigrants in Luxembourg

This paper examines the relative well‐being of Portuguese immigrants in Luxembourg by looking at indicators of material deprivation. We document material deprivation differences between immigrants and nationals—the “deprivation gap”—and measure the extent to which income differentials (and other sociodemographic differences) explain this gap using a combination of non‐parametric methods and a versatile graphical device. We find a large and significant deprivation gap against Portuguese immigrants, whatever the indicator considered. The extent to which the gap is merely a reflection of differences in income, however, depends on what deprivation items are taken into consideration. Income differences almost fully account for material deprivation differences when the latter is measured using the items included in the official EU social indicator of material deprivation. Inclusion of housing condition indicators mitigates this relationship and we then find compelling evidence that the deprivation gap is not entirely accounted for by income differentials.     

Reciprocal influences in future thinking between Europe and the USA

La prospective is generally considered to have grown after WWII in developed countries with two main centers, France and the United States of America. In France, the development of prospective does constitute an important point in contemporary history. Stemming from an idea from philosopher Gaston Berger near the end of the 1950s, a spirit arose accompanied by a practice spread in the central administration (government) and in major French corporations. The objective of this article is not to claim any French originality in thinking about the future. Instead, the following pages show how an original approach blending reflection on the future and present action took shape and the relationship that developed involving current practices on the other side of the Atlantic, mainly the USA, with the help of a few intermediaries.     

Scenario building: Uses and abuses

Scenarios hold little interest if they are not pertinent, coherent, and plausible. Although foresight requires a rigorous approach to address complex problems, the tools must also be simple enough to be easily used. Since the mid-1980s, the approach in strategic prospective workshops (a term that reminds us of the participatory nature of the French approach) has proven its effectiveness in meeting these criteria (simple, rigorous and appropriable; i.e., may be appropriated by participants). The authors try to reply to simple and important questions: What is a scenario? How to judge the quality of a scenario? Which strategies for which scenarios? These questions remind us that applications of strategic foresight tools are contingent and modular. They could also involve the stakeholders from upstream to downstream, as seen in the agro-food sector. Finally, they argue that the future still has to be built and that futurists produced too many scenarios and not enough projects.