Is the US fiscal deficit sustainable?: A fractionally integrated approach

In this paper, we examine if sustainability of the US fiscal deficit holds by means of studying the univariate properties of the difference between expenditures and public revenues using a methodology based on fractional processes. Furthermore, we incorporate the possibility of structural breaks in the deficit process. The results show that when allowing for a break in the mid-1970s, the public deficit in the US is an I(d) process with the fractional integration parameter d being slightly less than unity, implying that the fiscal deficit is mean reverting, and thus, sustainable, though the adjustment process towards equilibrium will take a very long time.     

Transaction Costs and the Present Value “Puzzle” of Farmland Prices

The present study introduces a theoretical land pricing model that allows for proportional transaction costs, and a corresponding kernel regression test. The model is tested with farmland returns data for 20 individual states, and also with two aggregate U.S. level series. The constant discount rate (CDR) present value model (PVM) of farmland prices is strongly rejected. However, it is found that the behavior of land prices and rents is consistent with the CDR-PVM in the presence of empirically observed values of transaction costs. Findings are very robust in that they apply to both individual state-level data and the U.S. aggregate-level series.     

World wage distribution

Two mechanisms are specified by which Hicks neutral efficiency differences between countries generate magnified international wage gaps. The theory is consistent with empirical observations on the price of non-internationally traded goods.     

Choosing governance modes for external technology sourcing

This study examines the effect of uncertainty on governance mode choice of interfirm relationships in new business development (NBD). We combine transaction cost economics and real options reasoning, arguing that in the early stages of NBD, where technological and market uncertainty are very high, companies are better off using governance modes that are reversible and involve a low level of commitment. When uncertainty has decreased as a result of prior R&D investments, transaction costs considerations become dominant and companies will shift towards governance modes that are less reversible and more hierarchical. We argue that technological distance leads to less hierarchical governance modes and prior cooperation between firms leads to subsequent choices for more hierarchical modes. Finally, we propose that higher exogenous uncertainty leads to less hierarchical governance modes.     

Price formation and the inflationary process in a small open economy (The Netherlands)

Summary Price formation in the manufacturing, services, building and agricultural sectors is analysed by estimating price equations in which unit labour costs, import prices, capacity utilization and the structure of the sellers market (sheltered or competitive) play a part. These equations have been included in a model in which sectoral wages and social security premiums are endogenous as well. This model, which is still partial since it considerse.g. labour productivity and capacity utilization as exogenous, allows a study of the intersectoral multiplier effects which were found to be quite considerable.A large number of simulation results are presented showing the effects of both domestic and foreign exogenous shocks.Finally, an analysis of the relative importance of the factors determining the rise in consumer prices during 1954–1972 has been carried out.     

Familial control,size and performance in the largest French firms

This paper explores to what extent large French firms in the hands of wealthy families have performed in a significantly different manner from non-familial firms. The results of the econometric analysis confirms the Monsen Downs Williamson theory according to which only a combination of size and divergent goals could cause deviations from profit-maximization. Indeed, it is established that when ownership and management are not essentially separate, large size has a systematically better impact upon profitability than when such a divorce exists. Differences in financial structure viz leverage do not affect the result.     

Het dagbladbedrijf in Nederland

Mr. Dr. M. Rooy, Het dagbladbedrijf in Nederland, H. E. Stenfert Kroese N.V. Leiden 1956, 613 blz.