THE ROLE OF FEES IN PATENT SYSTEMS: THEORY AND EVIDENCE

This paper reviews the economic literature on the role of fees in patent systems. Two main research questions are usually addressed: the impact of patent fees on the behavior of applicants and the question of optimal fees. Studies in the former group confirm that a range of fees affect the behavior of applicants and suggest that a patent is an inelastic good. Studies in the latter group provide grounds for both low and high application (or pre‐grant) fees and renewal (or post‐grant) fees, depending on the structural context and policy objectives. The paper also presents new stylized facts on patent fees of 30 patent offices worldwide. It is shown that application fees are generally lower than renewal fees, and renewal fees increase more than proportionally with patent age.     

THE EVOLUTION OF STOCK MARKET EFFICIENCY OVER TIME: A SURVEY OF THE EMPIRICAL LITERATURE

Abstract This paper provides a systematic review of the weak‐form market efficiency literature that examines return predictability from past price changes, with an exclusive focus on the stock markets. Our survey shows that the bulk of the empirical studies examine whether the stock market under study is or is not weak‐form efficient in the absolute sense, assuming that the level of market efficiency remains unchanged throughout the estimation period. However, the possibility of time‐varying weak‐form market efficiency has received increasing attention in recent years. We categorize these emerging studies based on the research framework adopted, namely non‐overlapping sub‐period analysis, time‐varying parameter model and rolling estimation window. An encouraging development is that the documented empirical evidence of evolving stock return predictability can be rationalized within the framework of the adaptive markets hypothesis.     

THE ECONOMICS OF NETWORKS: A SURVEY OF THE EMPIRICAL LITERATURE

Abstract.  Network effects, the increase in value of consuming a product if many other consumers use the same product, are a feature of many markets and in particular of many high-technology products. This paper surveys the burgeoning empirical literature that has developed especially during the last years. After theoretical work dominated the earlier years of research in this area, newer research has combined theoretical models with empirical studies and applied work with direct implications for public policy, marketing and company strategies. Furthermore, insights from the study of social networks have been applied to analyse how consumers interact with each other. The paper argues that a closer analysis of the network structure of consumer interaction promises fruitful future research avenues and advances in our understanding of how network effects operate.     

A SURVEY OF THE ECONOMICS OF PATENT SYSTEMS AND PROCEDURES

The last several decades have seen increases in patenting activity worldwide, as well as growing issues related to patent quality. In response to these quality issues a recent patent literature has emerged, that investigates the behavior and incentives of patent examiners, applicants, and third parties. In this paper, we provide an overview of patent procedures, patent systems and a survey of the new economic literature on patent systems. Both theoretical and empirical papers are considered. Policy implications coming from this literature are presented.     

EXCHANGE RATE TARGET ZONES: A SURVEY OF THE LITERATURE

This work selectively reviews the literature on exchange rate target zones and their theoretical and empirical methodologies and examines whether they can be used to clarify to what extent this type of exchange rate regime could contribute to greater exchange rate stability. We discuss the main contributions of the first and second generations of exchange rate target zone models. In an attempt to reconcile the poor empirical performance of the Krugman model with the reality of exchange rate target zone regimes, this line of research integrates target zones with alternative underlying economic models, such as imperfect credibility, intra‐marginal interventions and sticky price models. It was thus possible to understand the correlations observed between the exchange rate, its fundamentals determinants and the interest rate differential, and to explain the fact that the statistical distribution of the exchange rate is hump shaped rather than U shaped. This implies that the initial emphasis of target zone models on nonlinearities, ‘honeymoon effect’, ‘smooth pasting’ and marginal interventions has vanished. Exchange rate target zones are better described as similar to managed floating regimes with intra‐marginal interventions, with some marginal interventions when the exchange rate reaches the edges of the floating band.     

EMBODIED CARBON IN TRADE: A SURVEY OF THE EMPIRICAL LITERATURE

This paper critically reviews the literature on embodied carbon in trade and evaluates our present empirical understanding of these flows. A careful comparison of quantitative results from this literature exposes significant inconsistencies. For instance, estimates for emission embodied in world trade in 2004 range between 4.4 Gt and 6.2 Gt CO2, the difference corresponding to around half of Europe's annual emissions. A few consistent themes do nevertheless emerge from the literature. Most importantly, emissions in trade constitute a large and growing share of global emissions. Uncertainty about country‐level embodied emissions remains large, however, which presents severe limitations for the practical application of embodied carbon principles in climate policy.     

THE ECONOMICS OF MOVIES: A LITERATURE SURVEY

Abstract The film industry provides a myriad of interesting problems for economic contemplation. From the initial concept of an idea through production, distribution and finally exhibition there are many aspects to the film project and the film industry that present new and interesting puzzles worthy of investigation. Add to this the high level of data availability, and it is little wonder that an increasing number of researchers are being attracted to this industry. To date, however, there are no comprehensive surveys on the contribution of economists to this literature. This paper attempts to fill this void and unify what is known about the industry. It also identifies and discusses potential areas for new research.     

A SURVEY OF RECENT DEVELOPMENTS IN THE LITERATURE OF FINANCE AND GROWTH

Abstract.  This paper provides a survey of the recent progress in the literature of financial development and economic growth. The survey highlights that most empirical studies focus on either testing the role of financial development in stimulating economic growth or examining the direction of causality between these two variables. Although the positive role of finance on growth has become a stylized fact, there are some methodological reservations about the results from these empirical studies. Several key issues unresolved in the literature are highlighted. The paper also points to several directions for future research.     

THE DEMAND FOR BEER,WINE AND SPIRITS: A SURVEY OF THE LITERATURE

Abstract The demand for alcohol literature is vast and much conflicting information about the nature of the demand for alcoholic beverages has been published. This paper presents a survey of the literature, and then uses the technique of meta‐regression analysis to establish insights into the nature of the demand for beer, wine and spirits. Unlike previous meta‐studies of the demand for alcoholic beverages this study adjusts for the precision of each elasticity estimate. The analysis presented suggests reported elasticity estimates will be influenced by such factors as estimation technique, data frequency and time period under consideration. With respect to time, the findings suggest that the demand for alcoholic beverages has become less inelastic since the mid‐1950s and that the income elasticity has been falling since the mid‐1960s. The analysis also found support for the idea that alcohol as a commodity group is a necessity, and that consumers respond to price discounting with inventory behaviour rather than true substitution behaviour. Little support is found for the idea that the demand for alcoholic beverages varies fundamentally across most countries, although wine may be an exception.     

THE BENEFITS AND COSTS OF MONETARY UNION IN SOUTHERN AFRICA: A CRITICAL SURVEY OF THE LITERATURE

Abstract.  With the 14 members of the Southern African Development Community (SADC) having set the objective of adopting a common currency for the year 2018, an expanding empirical literature has emerged evaluating the benefits and costs of a common-currency area in Southern Africa. This paper reviews that literature, focusing on two categories of studies: (1) those that assume that a country's characteristics are invariant to the adoption of a common currency and (2) those that assume that a monetary union alters an economy's structure, resulting in trade creation and credibility gains. The literature reviewed suggests that a relatively small group of countries, typically including South Africa, satisfies the criteria necessary for monetary unification. The literature also suggests that, in a monetary union comprising all SADC countries and a regional central bank that sets monetary policy to reflect the average economic conditions (e.g. fiscal balances) in the region, the potential losses (i.e. higher inflation) from giving up an existing credible national central bank, a relevant consideration for South Africa, could outweigh any potential benefits of trade creation resulting from a common currency.     

DELEGATED PORTFOLIO MANAGEMENT: A SURVEY OF THE THEORETICAL LITERATURE

Abstract.  This paper provides a selective review of the theoretical literature on delegated portfolio management as a principal–agent relationship. The main focus of the paper is to review the analytical issues raised by the peculiar nature of the delegated portfolio management relationship within the broader class of principal–agent models. In particular, the paper discusses the performance of linear versus nonlinear compensation contracts in a single-period setting, the possible effects of limited liability of portfolio managers, the role of reputational concerns in a multiperiod framework, and the incentives to noise trading. In addition, the paper deals with some general equilibrium dimensions and asset pricing implications of delegated portfolio management. The paper also suggests some directions for future research.     

AUTOREGRESSIVE CONDITIONAL DURATION MODELS IN FINANCE: A SURVEY OF THE THEORETICAL AND EMPIRICAL LITERATURE

Abstract.  This paper provides an up-to-date survey of the main theoretical developments in autoregressive conditional duration (ACD) modeling and empirical studies using financial data. First, we discuss the properties of the standard ACD specification and its extensions, existing diagnostic tests, and joint models for the arrival times of events and some market characteristics. Then, we present the empirical applications of ACD models to different types of events, and identify possible directions for future research.     

THE ECONOMICS OF COUNTERTERRORISM: A SURVEY

We provide a review of theoretical and empirical contributions on the economic analysis of terrorism and counterterrorism. We argue that simple rational‐choice models of terrorist behavior – in the form of cost‐benefit models – already provide a well‐founded theoretical framework for the study of terrorism and counterterrorism. We also hint at their limitations which relate to the failure of accounting for the dynamics between terrorism and counterterrorism that may produce unintended second‐order effects as well as for the costs associated with counterterrorism and its international dimension. We reevaluate previously proposed counterterrorism strategies accordingly. Finally, in the light of our findings, we discuss interesting areas of future research.     

ALCOHOL CONSUMPTION AND HUMAN CAPITAL: A RETROSPECTIVE STUDY OF THE LITERATURE

Abstract Grossman proposed an individual's health can be viewed as one aspect of their human capital. Following this line of thought a number of recent papers have reported a positive impact of alcohol consumption on earnings. The rationale for the existence of such a relationship is the positive impact of alcohol on physical and mental health. We conduct a meta‐analysis to determine whether such factors as: the estimation technique, the presence of ex‐drinkers in the sample, possible sample selection bias and publication bias may all contribute to these findings. An additional suggestion for the positive relationship between alcohol and wages is the presence of a common set of personality traits that determines drinking behaviour and also leads to higher earnings. We examine this relationship by reviewing the literature that investigates if the personality influencing aspects of alcohol consumption influences measures of human capital. We also survey the significant body of research that has examined how alcohol consumption has been found to influence educational outcomes and the work force participation of problem drinkers.     

PICKING WINNERS? A SURVEY OF THE MEAN REVERSION AND OVERREACTION OF STOCK PRICES LITERATURE

Abstract. This paper surveys, and suggests a possible synthesis of, two growing literatures concerning stock market anomalies. The first concentrates on identifying contrarian trading rules, capable of generating profits, when securities are segregated on the basis of past earnings, or share price performance. The other simply examines the time-series properties of security prices to find evidence of low-frequency negative autocorrelation, or 'meanreversion'. We seek to articulate the points of interdependence between the two strands of research and the problems of joint hypothesis testing implied by the close relation between 'Overreaction'and 'mean-reversion'tests.     

THE ROLE OF LAW IN ECONOMIC GROWTH: A LITERATURE REVIEW

Abstract Compared with other explanatory variables, such as capital accumulation, technological innovations, geographical endowments, economic openness, and cultural factors, institutions, especially legal institutions have been regarded as a crucial condition for economic growth in recent years. The importance of legal rules is systematically revealed by a series of cross‐country econometric studies conducted by La Porta et al., who claim that legal origins are central to understanding the divergence in living standards across the regions and countries of the world and, compared with civil law countries, especially those countries with French civil law tradition, common law countries have enjoyed superior economic outcomes. The controversies set off by La Porta et al.'s proposition indicate that there are a number of questions that are difficult to explain by La Porta et al.'s theory, and hence call for more work on comparative analysis of different legal families before a consensus can be reached.     

ASSESSING THE REGIONAL ECONOMIC IMPACTS OF DEFENSE ACTIVITIES: A SURVEY OF METHODS

Defense activities exercised in a specific region may alter the region's economic performance. An accurate assessment of the potential economic impacts of defense activities is a valuable undertaking to enable regional planners to prepare for changes. The variety in the methods (among others, input–output models, economic base models, Keynesian regional multipliers, fixed‐effects estimators, and case‐study approaches) inspired by geography, sociology, and political science can pose a dilemma. We detail the historical and theoretical background of each method, as well as select exemplary cases where these methods were applied. By examining old and “new” methods, we aim to construct a typology that could be valuable to all stakeholders. In this sense, defense economics can also contribute to the allied social sciences by outlining evaluation methods that may be applicable to other fields.     

POPULATION AGE STRUCTURE,SAVING, CAPITAL FLOWS AND THE REAL EXCHANGE RATE: A SURVEY OF THE LITERATURE

Abstract This paper surveys the existing literature on the effects of population age structure on saving, capital flows and the real exchange rate. We build on previous surveys of age structure and saving behaviour by including extensive discussion of international linkages, specifically the impact on capital flows and real exchange rates. We also point to unresolved issues that need to be addressed given that population aging has serious policy implications in the developed economies these days.     

EXTREME VALUE THEORY IN FINANCE: A SURVEY

Extreme value theory is concerned with the study of the asymptotic distribution of extreme events, that is to say events which are rare in frequency and huge in magnitude with respect to the majority of observations. Statistical methods derived from it have been employed increasingly in finance, especially for risk measurement. This paper surveys some of those main applications, namely for testing different distributional assumptions for the data, for Value‐at‐Risk and Expected Shortfall calculations, for asset allocation under safety‐first type constraints, and for the study of contagion and dependence across markets under conditions of stress.     

PATENT ENFORCEMENT: A REVIEW OF THE LITERATURE

Without the confidence that patent rights can be enforced quickly and efficiently, when needed, the patent system will not stimulate innovation. For this reason, governments, academics, international institutions and the private sector have poured significant resources into gathering and analysing statistics on patent enforcement over the last two decades. This paper reviews these studies and finds that while infringement is relatively common, much enforcement occurs informally and less than 1–2% of patents incur litigation. New strategic uses of the enforcement system, especially by nonpracticing entities, are the major emerging enforcement issue, especially in the United States. While the old problem of litigation costs attracts the lion's share of empirical attention, it has produced remarkably few solutions to date.