Growth maximizing government size,social capital,and corruption

Our paper intersects two topics in growth theory: the growth maximizing government size and the role of Social Capital in development. We modify a simple overlapping generations framework by introducing two key features: a production function à la Barro together with the possibility that public officials steal a fraction of public resources under their own control. As underlined by the literature on corruption, Social Capital affects public officials' accountability through many channels which also affect the probability of being caught for embezzlement and misappropriation of public resources. Therefore, in our endogenous growth model such probability is taken as a proxy of Social Capital. We find that maximum growth rates are compatible with Big Government size, measured both in terms of expenditures and public officials, when associated with high levels of Social Capital.     

Hospital competition under pay‐for‐performance: Quality,mortality, and readmissions

Health outcomes, such as mortality and readmission rates, are commonly used as indicators of hospital quality and as a basis to design pay‐for‐performance (P4P) incentive schemes. We propose a model of hospital behavior under P4P where patients differ in severity and can choose hospital based on quality. We assume that risk‐adjustment is not fully accounted for and that unobserved dimensions of severity remain. We show that the introduction of P4P which rewards lower mortality and/or readmission rates can weaken or strengthen hospitals' incentive to provide quality. Since patients with higher severity have a different probability of exercising patient choice when quality varies, this introduces a selection bias (patient composition effect) which in turn alters quality incentives. We also show that this composition effect increases with the degree of competition. Critically, readmission rates suffer from one additional source of selection bias through mortality rates since quality affects the distribution of survived patients. This implies that the scope for counterproductive effects of P4P is larger when financial rewards are linked to readmission rates rather than mortality rates.     

Modelling tourism flows through gravity models: a quantile regression approach

Gravity models are widely used to study tourism flows. The peculiarities of the segmented international demand for agritourism in Italy are examined by means of a novel approach: a panel data quantile regression. We characterize the international demand for Italian agritourism with a large data set, by considering data of 33 countries of origin, from 1998 to 2010. Distance and income are the major determinants, but we also found that mutual agreements and high urbanization rates in countries of origin are associated with larger flows of incoming tourists.     

Options and sunspots in a simple monetary economy

Summary. We study sunspot immunity in a dynamic monetary economy in which consumers are allowed to trade put and call option contracts on the general price level. We define the concept of strong sunspot immunity to characterize economies that have no sunspot equilibria regardless of the number of extrinsic states and their probabilities of occurrence. We show that a small number of option contracts can make an economy strongly sunspot immune. In addition, we demonstrate how asset re-trading opportunities, and the associated capital gains and losses, reduce the number of options needed for this result to obtain. Received: August 13, 1996; revised version: January 20, 1997     

Marketing mix and customer equity of SPA brands:Cross-cultural perspectives

Globalization has substantially transformed the fashion industry. Firms that conduct innovative marketing campaigns for SPA brands, also known as fast fashion, are operating worldwide. Because SPA brands tend to have short trend cycles, corporate profitability is sensitive to consumers' attitudinal changes. The authors of this study establish a theoretical framework by examining research trends related to customer equity at home and abroad by delving into the current state of global SPA brands, defining customer equity, developing customer equity measurements, and conducting empirical analyses. This study uses structural equation models to analyze corporate marketing activity effects on customer lifetime value through brand attitude. Although earlier studies identify customer equity as driving value equity, brand equity, and relationship equity, the authors introduce social network equity as another driver.     

含分布式发电配电网企业综合效益分析

为了提高电力系统的经济性与安全性,评估接入分布式发电(DG)后电网企业的综合效益成为指导企业决策的主要依据,为日后电网整体规划挑选最优方案提供理论依据。在研究含分布式发电的配电网的综合效益的基础上,从DG接入对系统网损、扩容投资、售电损失、生态环境等综合社会效益方面产生影响出发,分析各个部分相应模型,完善整体综合效益量化模型。以电网企业的整体效益最大化为目标,考虑经济性约束条件,保证DG的合理运行。由算例分析可知,电网企业整体社会收益增加,可实现经济接入并带来利润。既验证了模型的合理性,又为电网企业应季规划电力分配的决策提供数据支持与依据。     

Monetary equilibria over an infinite horizon

Summary. Money provides liquidity services through a cash-in-advance constraint. The exchange of commodities and assets extends over an infinite horizon under uncertainty and a sequentially complete asset market. Monetary policy sets the path of rates of interest and accommodates the demand for balances through open market operations or loans. A public authority, which, most pertinently, inherits a strictly positive public debt, raises revenue from taxes and seignorage, and it distributes possible budget surpluses to individuals through transfers. Competitive equilibria exist, under mild solvency conditions. But, for a fixed path of rates of interest, there is a non-trivial multiplicity of equilibrium paths of prices of commodities. Determinacy requires that, subject to no-arbitrage and in addition to rates of interest, the prices of state-contingent revenues be somehow determined.Received: 16 April 2003, Revised: 16 January 2004, JEL Classification Numbers: D50, E40, E50.We are grateful to Pietro Reichlin, Rabah Amir, Tomoyuki Nakajima, Armando Dominioni and Leo Ferraris for helpful discussions and their reading of preliminary drafts. The usual disclaimer applies. An earlier version was circulated as [4].     

Theory and practice of monetary policy

Summary. We consider an optimally managed renewable resource with stochastic non-concave growth function. We characterize the conditions under which the optimal policy leads to global extinction, global conservation and the existence of a safe standard of conservation. Our conditions are specified in terms of the economic and ecological primitives of the model: the biological growth function, the welfare function, the distribution of shocks and the discount rate. Our results indicate that, unlike deterministic models, extinction and conservation in stochastic models are not determined by a simple comparison of the growth rate and the discount rate; the welfare function plays an important role.Received: 20 October 2004, Revised: 28 February 2005, JEL Classification Numbers: D90, O11, O41, Q32.Santanu Roy: Correspondence toResearch on this paper was completed when the second author visited Cornell University in July, 2003. We thank the Center for Analytic Economics and the Department of Economics at Cornell University for making this research visit possible. The current version has gained considerably from the comments made by an anonymous referee.     

Domestic financial market frictions,unrestricted international capital flows,and crises in small open economies

Summary. We present an example of a small open economy where small increases in the world interest rate may induce a sharp decline in output and a precipitous depreciation of the exchange rate. Due to a costly state verification problem in domestic credit markets, combined with unrestricted international capital flows, our economy generates two long-run equilibria, one with low GDP and a relatively depreciated real exchange rate (RER), and one with high GDP and a relatively appreciated RER. The first is always a saddle, while the second may be a sink or a source, depending on the level of the world interest rate. A crisis is identified with the economy switching from an equilibrium path approaching the high-output steady state to the saddlepath approaching the low-output steady state. In Mexicos recent history, periods of growth associated with appreciation of the RER have alternated with periods of sharp contraction and depreciation of the RER. Our economy displays such behavior in response to changes in the world interest rate.Received: 9 April 2002, Revised: 20 March 2003JEL Classification Numbers: E5, F4.G. Antinolfi, E. Huybens: We thank Steve Fazzari, Tim Kehoe, Todd Keister, Manuel Santos, Karl Shell and especially Bruce Smith for very helpful discussions. Jaime Calleja Alderete, Eduardo Camero Godínez, and Juan Vargas Hernández provided excellent research assistance. All remaining errors are ours. Huybens was an assistant professor in the Centro de Investigación Económica, ITAM, at the time this article was written, and part of this work was completed while Antinolfi was a visiting scholar at the Federal Reserve Bank of St. Louis. The views expressed herein are those of the authors, and do not reflect those of the World Bank or the Federal Reserve Bank of St. Louis. Correspondence to: G. Antinolfi