On disequilibrium adjustment processes

Here, we study a class of disequilibrium processes defined by differential inequalities, where prices are adjusted according to the agent's short-term demands, in both pure exchange and monetary settings. We establish convergence theorem and accessibility theorem without convexity hypotheses on the utility functions.     

Optimal design of trade institutions

We model an economy with social institutions that facilitate trade and induce three types of costs: establishment costs, access costs, and use costs. Use costs are specific transaction costs related to the use of these trade institutions. We assume that a trade institution is economically completely determined by the costs it imposes and by the effects on the trades it facilitates. We extend the Pareto efficiency concept to include various modes of organization of social institutions: the costs and benefits of these organizations are expressed in the trades they facilitate.Within this setting we discuss a valuation equilibrium concept, in which all agents use a common conjectural price system that assigns to every trade institution the price vector that would prevail under it. This feature of the equilibrium is important in securing the second welfare theorem, and is new to the analysis of economies with costly trade. Since the use costs can be nonlinear, there are non-convexities that prevent the second welfare theorem from obtaining in a finite economy, but we show it for large economies.Received: 3 April 2002, Accepted: 30 April 2003, JEL Classification: D59, D70, H49Robert P. Gilles: donewhile visiting the Center for Economic Research, Tilburg University, Tilburg, The Netherlands. Financial support from the Netherlands Organization for Scientific Research (NWO), grant B46-390, is gratefully acknowledged.Dimitrios Diamantaras: Part of this research wasSupport from Temple University via a Fuller research fellowship is gratefully acknowledged.The authors would like to thank Suzanne Scotchmer, Andreu Mas-Colell, Marcus Berliant, Shlomo Weber, Hans Haller, Dhanajay Gokhale, Julian Manning, and two anonymous referees for their valuable comments and discussions of previous drafts of this paper. A previous version of this paper was circulated as Equilibria of economies with costly trade.     

Research design in total institutions: problems,pitfalls, and possible solutions

Research in total institutions is fraught with problems and pitfalls rarely discussed in methodology and research design textbooks but regularly encountered in the literature. Five of the major relevant problems in research designs for this area are considered, examples of the pitfalls are given, and suggestions for minimizing or overcoming them are offered.     

Economic freedom and public,non-market institutions: evidence from criminal prosecution

Economic freedom, which measures the protection of property and freedom to contract, is generally argued to capture the quality of a state’s institutions regarding market activity. As to be expected, numerous studies have found that economic freedom is associated with good economic outcomes. Additionally, much effort in public economics has worked to identify the features of quality non-market public institutions. No effort has been made to connect institutions that influence market activity and institutions that govern non-market activities. We take a first step. We employ a linear programming method for measuring relative efficiencies known as Data Envelopment Analysis. We apply this technique to information on the use of inputs to the production of the prosecution of crime across the thousands of local prosecutor offices in the U.S. We then compare state-level measurements of prosecution productivity with data on state-level economic freedom from the Economic Freedom of North America index. We show that there is a positive and statistically significant relationship between the two. Those states that develop institutions respecting economic freedom also tend to be the states that develop efficient publicly-provided services. The results are extended to complementary economic freedom measurements.     

International competition and pay,working time and employment: exploring the processes of adjustment

The internationalisation of markets, competition and regulation is increasingly recognised. So far, however, debate about the effects has been largely speculative. This article examines the UK engineering industry. Survey evidence suggests that international comparisons are relatively unimportant, little benchmarking is going on and that stability characterises pay and working time arrangements. Further interview evidence explains that this is because pay and working time are set with employee expectations in mind, whereas it is the treatment of unit costs that reflects international pressures. As a consequence there has been substantial reductions in employment as well as some important changes in work organisation, even if there has been little change in pay or working time systems. In effect, it suggests that there is a form of ‘implicit contract’ taking place. A wider implication is that the main impetus for the ‘Europeanisation’ of industrial relations is likely to come from the growing convergence of costs rather than pressures for wage parity.     

A continuity property for local price adjustment mechanisms

This paper makes a case that a (local) continuity property is a reasonable one for any local price adjustment mechanism. This property means that if the starting points (i.e., initial prices) of the adjustment process are ‘close' to one another, and if the characteristics of the economies are ‘close' to one another, then, given any price adjustment mechanism, agents should compute equilibria that are ‘close' to one another. Under preferences which satisfy a ‘surjectivity hypothesis', it is shown that the tâtonnement process satisfies this continuity property on a nice subset of the space of all economies. A characterization of these economies for which the tâtonnement process is locally stable is given. Chart logic is a useful way to think about the path dependent property of implied volatility and about the relationship between implied volatility and historical volatility.     

Corruption, institutions and regulation

We analyze the effects of corruption and institutional quality on the quality of business regulation. Our key findings indicate that corruption negatively affects the quality of regulation and that general institutional quality is insignificant once corruption is controlled for. These findings hold over a number of specifications which include additional exogenous historical and geographic controls. The findings imply that policy makers can focus on curbing corruption to improve regulation, over wider institutional reform.     

Simultaneous determination of product attributes and prices, and production processes in product-line design

Global competition, rapid changes in technology, and market fragmentation have resulted in shorter product life cycles. In order to remain viable, it is increasingly important for firms to introduce new products frequently. Product design is a complex process that involves coordination of activities among several functional disciplines within the company as well as the customers and the suppliers. Traditionally, the information flow among the various product development stages has been sequential. However, there is increasing evidence to suggest that an integrated approach that considers several stages simultaneously may be superior.This paper provides a decision support tool for implementing such an integrated approach. On the basis of given customer preferences, the paper presents a model for determining the number of new products to be introduced, the exact specifications of these products, and the production processes for efficiently delivering these specifications. These decisions are made in an integrated manner by simultaneously considering the interaction among the various choice variables. A decomposition-based solution procedure is developed that iterates between the product design and process selection decisions while maintaining an effective link between them.In addition to understanding the economic value of adopting the integrated approach to product design, the paper discusses how the proposed model can be used effectively to perform sensitivity analysis with respect to some of the important decision variables.     

Dumping, adjustment costs and uncertainty

Domestic demand uncertainty in the presence of adjustment costs can cause profit-maximizing firms to sell output abroad at a loss. Firms may dump output at prices below long-run marginal and average productions costs with probability arbitrarily close to one. The model predicts dumping is particularly likely in process industries such as steel. Closed form dumping solutions and interesting comparative statics are obtained. Also, the effect of domestic competition on dumping is examined. I find domestic competition increases total dumping, although a monopolist maximizing output subject to a zero expected profit constraint will dump more than a competitive industry.     

注重从创新机制上加强事业单位领导班子建设

班子建设作为党的建设新的伟大工程的核心内容,只有以改革创新精神,才能适应新世纪新阶段的发展要求,才能为全面建设小康社会提供坚强有力的保证。     

Relationship between organizations, institutions, entrepreneurship and economic growth process

The main goal of this paper is to show that organizations and institutions play a relevant role in the economic growth process, both directly and indirectly. Human capital plays a direct role by facilitating the introduction and use of new technologies. A more indirect role is play by entrepreneurial activity in three ways: 1) supplying monetary funds; 2) creating an adequate social climate and 3) encouraging trust in the society. The hypotheses introduced are tested using the data on eleven countries.     

Growth, public investment and corruption with failing institutions

Corruption is thought to prevent poor countries from catching up with richer ones. We analyze one channel through which corruption hampers growth: public investment can be distorted in favor of specific types of spending for which rent-seeking is easier and better concealed. To study this distortion, we propose a dynamic model where households vote for the composition of public spending, subject to an incentive constraint reflecting individuals’ choice between productive activity and rent-seeking. In equilibrium, the structure of public investment is determined by the predatory technology and the distribution of political power. Among different regimes, the model shows a possible scenario of distortion without corruption in which there is no effective corruption but the possibility of corruption still distorts the allocation of public investment. We test the implications of the model on a set of countries using a two-stage least squares estimation. We find that developing countries with high predatory technology invest more in housing and physical capital in comparison with health and education. The reverse is true for developed countries.      

土地市场淡静中的调整

曾经的热反衬了2008年土地市场的冷.　　就在一年以前,土地裹挟着资本将地产市场推向了过山东的顶点.……     

Economic institutions and horizontal checks and balances in the Chinese bureaucratic system: evidence at the prefecture-city level

Economics of Governance - In China, “democratic centralism” complicates horizontal and vertical bargaining among politicians. Higher-level cadres need to consider not only...     

Messaging specifications, properties and gratifications as institutions: How messaging institutions shaped wireless service diffusion in Norway and Japan

We address the following question: why have a large number of mobile services been successful in Japan but received only lukewarm response in Norway despite Norway’s lead in the late 1990s in wireless messaging? Current explanations are not sufficient in explaining this dilemma. We approach mobile service diffusion through the lens of new institutionalism by analyzing how messaging institutions emerged both on supply and demand sides that enabled and constrained mobile service innovation. A tripartite framework of institutional fields consisting of architectural service specifications, service properties, and use gratifications is formulated. Using secondary data we show that mobile service specifications in Japan integrated better interpersonal communication and data services and thereby allowed instrumental and aesthetic properties to align with expressive properties of messaging. In Norway disjoint service specifications caused service properties and gratifications to remain disconnected, which inhibited data service adoption and channeled data service adoption towards simple SMS based messaging solutions. Differences in service specifications and prospective gratifications not only account for differences in overall service diffusion, but offer valuable insights into institutional forces that shape complex mobile service innovation.     

Efficient,Pareto-improving processes

We give two optimization programs for determining whether Pareto improving local changes are possible. When they are, the programs compute them. Any procedure generating efficient and Pareto improving changes can be replicated by these programs. The two programs are dual to each other. We apply the programs to Pareto improving exchange processes and to Pareto-improving tax-tariff reforms.     

经济制度,劳动分工和经济绩效

本文构建了一个新兴古典经济学一般均衡模型,采用超边际分析方法,来解释经济制度对自利个人的行为影响。分析表明,由制度所决定的“偷抢“交易对手财物活动费用系数提高时（偷抢的成本增大）,自利的个人偷抢活动水平就会降低,投入偷抢的时间下降,投入生产的时间会上升,生产率会提高,真实收入会增加,从而改善社会的经济绩效。本文对目前我国开展的整顿和规范市场的经济秩序有现实的指导意义。     

Multilateral adjustment,regime switching and real exchange rate dynamics

The purpose of this paper is to examine the role of multilateral adjustment to U.S. external imbalances in driving bilateral real exchange rate movements by developing a new regime-switching model that consists of a Markov-switching model with a time-varying transition matrix that depends on a threshold variable. Consequently, the dynamics of the real exchange rate can be modeled in the context of two regimes: one in which multilateral adjustment to large U.S. external imbalances is an important factor driving movements in the real exchange rate and the second in which the real exchange rate is driven mainly by country-specific macroeconomic fundamentals. We apply this model to the bilateral real Canada–U.S. dollar exchange rate and compare its performance to several other alternative models. All of the models are estimated using a Bayesian approach. Our findings suggest that during periods of large U.S. imbalances, an exchange rate model for the real Canada–U.S. dollar exchange rate should allow for multilateral adjustment effects.