Unequal Exchange and Exploitation

Marx insists that the richer country exploits the poorer one through an unequal exchange of labour quantities. Elsewhere I have confirmed that the unequal exchange of labour quantities is possible, but I failed to consider carefully whether this implies an unequal exchange of values, i.e. international exploitation. This paper argues that Marx is wrong to insist on it, in that he does not consider properly the comparison of values differently dated, and points out that a similar failure can be found in the theory of Bauer and Grossmann. Finally, I state my own theory, which is free from the difficulties found in Marxian theories.
JEL Classification Numbers: B1, F0.     

Indescribability and its irrelevance for contractual incompleteness

The incomplete contracts literature often cites indescribable contingencies as a major obstacle to the creation of complete contracts. Using agents’ minimum foresight concerning possible future payoffs, Maskin and Tirole (Rev Econ Stud 66:83–114, 1999) show that indescribability does not matter for contractual incompleteness as long as there is symmetric information at both the contracting stage and the trading stage. This is called the irrelevance theorem. The following generalization of the irrelevance theorem is shown here: indescribability does not matter even in the presence of asymmetric information at the trading stage, as long as there is symmetric information at the contracting stage. This is an important clarification because Kunimoto (Econ Lett 99:367–370, 2008) shows that indescribability can matter if there is asymmetric information at both stages. It is thus argued that asymmetric information at the contracting stage is necessary for indescribability to be important in the rational agents contracting model.     

Factors Influencing Corporate Environmental Protection Activities for Greenhouse Gas Emission Reductions: The Relationship Between Environmental and Financial Performance

This paper analyzes the relationship between a firm??s greenhouse gas (GHG) emissions and its profitability in Japanese manufacturing. Defining the difference between the marginal revenue and cost of reducing GHG emissions as the ??net benefit,?? which is endogenously characterized by various factors, we estimate a switching regression model where the sign of the net benefit determines the relationship between GHG emissions and profitability. Our empirical analysis focuses on ISO 14001 adoption, market competition, uncertainty, financial flexibility, and share ownership structure as the factors, and indicates that firms with low firm-specific uncertainty, high financial flexibility, and a high proportion of large shareholders tend to have a nonnegative net benefit, so that the positive relationship between their GHG emissions and profitability is mitigated. On the other hand, although ISO 14001 adoption is generally considered to be an indicator of a firm??s stance on environmental proactiveness, it does not provide a sufficient incentive to reduce emissions. Factors such as uncertainty, financial flexibility, and share ownership structure are more important to GHG emission reductions.     

POST‐KEYNESIAN EFFECTIVE DEMAND AND CAPITAL–LABOUR SUBSTITUTION

This paper analyses the relationship between the real wage rate and employment when we induce capital–labour substitution within a Post‐Keynesian Kaleckian model. To avoid the over‐determinacy problem, we consider a non‐homogeneous production function and cost minimization, in contrast to recent work that assumed a homogeneous production function and profit maximization. As a result, we find not only that increasing returns to scale are important in sustaining the long‐run stability condition, but also that if the increasing returns to scale are small, then it is more likely that employment will increase.     

EVALUATING HEDGING ERRORS: AN ASYMPTOTIC APPROACH

We propose a methodology for evaluating the hedging errors of derivative securities due to the discreteness of trading times or the observation times of market prices, or both. Utilizing a weak convergence approach, we derive the asymptotic distributions of the hedging errors as the discreteness disappears in several situations. First, we examine the hedging error due to discrete-time trading when the true strategy is known, which generalizes the result of Bertsimas, Kogan, and Lo (2000) to continuous Itô processes. Then we consider a data-driven strategy, when the true strategy is unknown. This strategy is free of parametric model assumptions, therefore it is expected to serve as a benchmark for the evaluation of parametric strategies. Finally, we consider a case study of the Black-Scholes delta-hedging strategy when the volatility is unknown in the proposed framework. The results obtained give us a prospect for further developments of the framework under which various parametric strategies could be compared in a unified manner.     

Monotonicity and continuity of the critical capital stock in the Dechert–Nishimura model

We show that the critical capital stock of the Dechert and Nishimura (1983) model is a decreasing and continuous function of the discount factor. We also show that the critical capital stock merges with a nonzero steady state as the discount factor decreases to a certain boundary value, and that the critical capital stock converges to the minimum sustainable capital stock as the discount factor increases to another boundary value.     

Firm level return-volatility analysis using dynamic panels

This paper examines “leverage” and volatility feedback effects at the firm level by considering both market and firm level effects, using 242 individual firm stock data in the US market. We adopt a panel vector autoregressive framework which allows us to control simultaneously for common business cycle effects, unobserved cross correlation effects in return and volatility via industry effects, and heterogeneity across firms. Our results suggest that volatility feedback effects at the firm level are present due to both market and firm effects, though the market volatility feedback effect is stronger than the corresponding firm level effect. We also find that the leverage effect at the firm level is persistent, significant and negative, while the effect of market return on firm volatility is persistent, significant and positive. The presence of these effects is further explored through the responses of the model's variables to market-wide return and volatility shocks.     

Human Capital, Productivity, and Stratification in Rural Pakistan

This paper investigates the effects of human capital on productivity using micro panel data of rural households in the North‐West Frontier Province, Pakistan, where a substantial job stratification is observed in terms of income and education. To clarify the mechanism underlying this stratification, the human capital effects are estimated for wages (individual level) and for self‐employed activities (household level), and for farm and non‐farm sectors. Estimation results show a clear contrast between farm and non‐farm sectors—wages and productivity in non‐farm activities rise with education at an increasing rate, whereas those in agriculture respond only to the primary education.