Structural models of complementary choices

This article reviews the rapidly growing literature on structural models of complementary choices. It discusses recent modeling developments and identifies promising areas for future research.     

The Intertemporal Causal Dynamics Between Fixed Capital Formation and Economic Growth in The Group-Of-Seven Countries *

The debate between De Long and Summers (1991, 1992) and Blomstrom, Lipsey and Zejan (1996) who reported conflicting results on the relationship between fixed capital formation and economic growth raised doubts on whether changes in a country's capital formation shares in GDP have an influence on its future growth rates. This paper addresses the issue again by examining the causal patterns between the share of fixed investment in GDP and the growth rate of per capital real GDP on an individual country basis, using time series on each of the group-of-seven countries. The empirical results suggest that the causal relationship between these variables may vary significantly across the major industrialized countries that presumably belong to the same growth group. Most importantly, no consistent evidence is found that causality is running in only one direction. Rather, causality between fixed investment and growth seems to have a country-specific nature and may run in either directions.     

A tale of two deficits: an empirical investigation for canada

This article purports to explain the current account behavior for Canada in the context of the twin-deficit hypothesis. The study tests the validity of the hypothesis in a model in which domestic savings and investment are explicitly considered. In this article we use the cointegration analysis to investigate the secular relationship between the fiscal and current account deficits. We also estimate an error correction model to capture the short-run dynamics of the relationship. A major finding of this study is that the current account deficit seems to be related both to the fiscal deficit and the savings—investment gap.     

Disease management programs: program intervention, behavior modification, and dosage effect

Disease management programs provide highly personalized self- management support to consumers afflicted with chronic illnesses. Program interventions include the provision of health information, ongoing motivation, and support for behavior change, adherence to pharmacotherapy, development of self-efficacy, and the distribution of self-care tools. Interactions between program and patients are structured and repetitive over time. Consumer behavior change can result in measurable improvements in quality and medical cost savings from postponement or avoidance of preventable complications. We evaluated the impact on cost and quality of a comprehensive Diabetes Disease Management Program (DDMP) across ten US urban markets. A staggered implementation allowed for ten pre–post and five pair-wise comparisons. The DDMP demonstrated significant improvements in six diabetes-related quality indicators, lower cost, and a dose-response with greater than 6 months participation. We conclude that a DDMP improves quality of care and reduce overall medical costs.     

A production/remanufacture model with returns’ subassemblies managed differently

This paper considers a production-remanufacturing inventory model for a single product, where constant demand is satisfied from the inventory of newly produced and remanufactured items. Although the available models in the literature imply that collected used units (or returns) are disassembled for recovery purposes, these models really do not treat them as such. Contrary, the returns are assumed to be recovered as whole units, perhaps, for simplicity. This assumption may not capture the benefits reaped from product recovery programs. This paper addresses this limitation in the literature and assumes that each unit of a used product is collected and disassembled into components, where these components are sorted into subassemblies, which are fed back into the production-remanufacturing process. The returned subassemblies are remanufactured and reassembled to represent a second source of as-good-as-new units of the end-product. For this multi-component inventory problem, the question that needs to be answered is whether, or not, extreme strategies of either pure remanufacturing or pure production are more economical than a mixed strategy (one that combines both strategies). A mathematical model is developed that accounts for the inventories of subassemblies. The results suggested that not accounting for the disassembled components of a product leads to inappropriate inventory decisions that are not environmentally sound.     

Investment Opportunity Set and Voluntary Disclosure of Prospective Information: A Simultaneous Equations Approach

Abstract:   This paper examines empirically the relationship between the level of disclosure of prospective information and the investment opportunity set for firms in New Zealand. Using a systems (two‐stage least squares) approach that explicitly controls for potential endogeneity between disclosure and IOS, we find that the level of prospective information disclosure is significantly and positively related to IOS in both specifications in our simultaneous analysis. Further, we document that prospective information disclosure is positively related to firm size and new security offerings, and is not related to inside ownership and firm profitability. IOS is positively impacted by a firm's investments in fixed assets and its profitability. Finally, we find that forward looking disclosure levels are positively related to the proportion of outside directors on the board and negatively related to barriers to entry, but these findings are not robust across alternative model specifications.     

Least squares, preliminary test and Stein-type estimation in general vector AR(p) models

In the general vector autoregressive process AR ( p ), multivariate least square estimation (LSE)/maximum likelihood estimation (MLE) of a subset of the parameters is considered when the complementary subset is suspected to be redundant. This may be viewed as a special case of linear constraints of autoregressive parameters. We incorporate this nonsample information in the estimation process and propose preliminary test and Stein-type estimators for the target subset of parameters. Under local alternatives their asymptotic properties are investigated and compared with those of unrestricted and restricted LSE. The dominance picture of the estimators is presented.