Market information: Selling intensity and the dynamics of international economic integration

Summary We may assume the more a firm has traded previously with a particular party, or a particular country, the lower the costs of market information will be. When a firm starts to trade with a new country, we may further assume that the greater the cultural distance is between this country and its own country, the larger the information costs will be.A statistical study of the Swedish imports of selected consumers goods after the establishment of EFTA indicates that these assumptions hold true for non-selling intensive commodities, but not for selling intensive commodities.The research on which this paper is based is a part of a more general study of how various knowledge factors influence international business decisions, which will be published in a forthcoming bookHow Foreign is Foreign Trade? A first draft of the paper was written during a stay at the International Institute of Management in Berlin, and I am grateful for the aid which I recieved from the Institute's staff during its preparation. I am also most grateful Michal Groniewitz at the Institute of Business Studies in Uppsala whose time-consuming and tedious task it has been to prepare the tables on Swedish imports, on which the statistical part of the study has been based.     

The American economy in the 1980's

Conclusion There are many things that could distort or completely change the picture that has been sketched of the U.S. economy in the 1980's. War and major technological innovations are two that come immediately to mind. A quick and unexpected reversal of the trends that form the basis of the picture could also, although this seems very unlikely. Or new and unanticipated socio-psychological trends could be generated which would result in a different picture than the one presented. Perhaps it appears that I have stuck my neck out in this discussion. If you think that, you are wrong; I am in a can't-lose situation. If I am right, I can always point to my statements of 1978. Since the anticipations of this paper cannot be fully judged for at least a decade, I am safe even if I am wrong. In ten years nobody except me will remember what I said today, and even I may not. Presidential Address to the Sixth Annual Atlantic Economic Conference, October 11–14, 1978, Washington, D.C.     

The multinational enterprise and economic internationalism

Multinational enterprises have been praised as means of achieving the most efficient use of the world's resources, and, therefore, as a new means to classical economic internationalism. Examination of their behaviour gives little evidence that they would achieve this goal, for their criteria of decision-making are different and their movement of factors is for company objectives, not economic or market: the market cannot signal long-term investment opportunities. Nor is the multinational enterprise likely to respond to national economic criteria, for its orientation is regional or international, though certainly not yet ‘global’. Conflicts of values and concepts of equity will continue to produce tensions and calls for controls over the multinational enterprise.     

Europe’s Demographic Deficit A Plea For A Child Pension System

Summary This paper considers the economic implications of the stalling birth rates and demographic development in Europe. To remedy for this it proposes a child pension system. This system allows additional pension facilities depending on the number of children raised. It should be a PAYG pension financed with an income tax. The main motivation for this is that parents have invested resources which also benefit society.18th Tinbergen Lecture, Amsterdam, October 22, 2004Ifo Institute for Economic Research at the University of Munich.I am grateful to Lans Bovenberg and Peter Cornelisse for useful conversations about the Dutch pension system and Tinbergens views on children and pensions. I thank Robert Koll, Regina von Hehl and Elsita Walter for careful research assistance, and Tobias Seidel, Michael Stimmelmayr, Martin Werding and Markus Zimmer for useful comments.     

An economic rationale for a system of loglinear asset demand functions

Summary In this paper we derived a system of asset demand functions from an expected utility maximization model, in which the utility function satisfies both the decreasing absolute risk aversion as well as the increasing relative risk aversion criteria. The rates of return are assumed to be distributed as a multivariate log-normal distribution. It is shown that a system of log-linear asset demand functions follows from the exact model as an approximation and performs better than similar types of linear asset demand functions which follow from a negative exponential utility function.I am grateful to Professor A. R. Bergstrom and Mr. R. E. Bailey for their comments on an earlier draft. Comments from the referee of this journal helped me to improve my presentation. I am also grateful to Professor R. Bandyopadhyay for his comments. I am solely responsible for any errors.     

基于新C-D生产函数的广东省经济增长实证研究

本文构建引入制度变量的新C—D生产函数。研究资本、劳动、科技和制度要素共同作用下的经济增长，运用广东省的时间序列数据进行了实证分析。发现改革开放25年来广东省经历了以“开放化、市场化、民营化”为主要内容的三次制度创新，平均制度变革速率达15．17％；资本、劳动、科技、制度的产出弹性分别为0．41、0．43、0．16、0．029，对经济增长的贡献率分别为58．4％、10．4％、27．5％、3．7％；经济增长的粗放特征较为明显，以转变经济增长方式为核心的新一轮制度创新势在必行。     

Warfare and Economic Inequality: Evidence from Preindustrial Germany (c. 1400-1800)

What was the impact of military conflict on economic inequality? I argue that ordinary military conflicts increased local economic inequality. Warfare raised the financial needs of communities in preindustrial times, leading to more resource extraction from the population. This resource extraction happened via inequality-promoting channels, such as regressive taxation. Only in truly major wars might inequality-reducing destruction outweigh inequality-promoting extraction and reduce inequality. To test this argument I construct a novel panel dataset combining information about economic inequality in 75 localities, and more than 700 conflicts over four centuries. I find that the many ordinary conflicts — paradigmatic of life in the preindustrial world — were continuous reinforcers of economic inequality. I confirm that the Thirty Years’ War was indeed a great equaliser, but this was an exception and not the rule. Rising inequality is an underappreciated negative externality in times of conflict.     

Global Imbalances or why are the Poor Financing the Rich?

Summary Traditional economic models predict that capital should flow from capital-rich to capital-poor economies. In recent years, capital has been flowing in the opposite direction, although foreign direct investment flows do behave more in line with theory. Do these perverse patterns of flows dampen growth in non-industrial countries by depriving them of financing for investment? On the contrary, the evidence suggests non-industrial countries that have relied more on foreign finance have not grown faster in the long run. At the same time, growth and the extent of foreign financing are positively correlated in industrial countries. I argue that the reason for this difference may lie in the limited ability of non-industrial countries to absorb foreign capital. This paper draws heavily from work with Eswar Prasad and Arvind Subramanian, who should share the credit for the contents. I alone am responsible for remaining errors.     

New classical and austrian business cycle theory: Is there a difference?

Conclusions To compare new classical and Austrian theory seems legitimate only with respect to a particular aspect of economic reality, namely business cycles. In the past century, Austrians have covered so many fields of economic theory that the achievements of new classicals are comparatively small. The discussions of both approaches showed that it would not be appropriate to claim that Austrians have developed theonly theory of business cycles which refers to individual behavior and choice. New classicals have rediscovered this approach and used many of the tenets for their explanation. This is not to say that new classical theory completely follows Austrian traditions. But many of the differences appear to be small or are only semantic in character.     

Instability of Equilibria in Experimental Markets: Upward-Sloping Demands,Externalities, and Fad-Like Incentives

The objective of the paper is to study markets in which the value of the activity to any one person increases with the level with which the activity is undertaken by others. The general interpretation could be fads, mimicking behavior, or some sort of belief formation process in which the beliefs or expectations of agents about some underlying state of nature are influenced by the buying behavior of other agents. The result is to create a market that can be modeled as having an upward-sloping market demand curve. The questions posed are (i) in the fad-like environment, does the classical concept of equilibrium (as an equating of market demand and market supply) accurately predict market behavior; (ii) can both stable and unstable equilibria be observed; and (iii) which of the two classical concepts of stability best describes the conditions under which instability is observed? Under the conditions of a fad-like demand side externality in a market organized by the multiple unit double auction (MUDA), market equilibration occurs at a point where demand equals supply. The disequilibrium behavior follows the dynamics of the Marshallian model of dynamics, as opposed to the Walrasian model. These results confirm and extend the major findings of Plott and George who studied a similar environment with a downward-sloping supply.     

Monopoly: A Game Economists Love to Play—Badly!

Giving this presidential address to the Southern Economics Association is more of a privilege than a duty of office. I suspect that I am more honored to give this talk than most past presidents of the Association, given my current academic post in California. I may be far removed from my southern heritage in space, but not in orientation. My heart remains tied to the South. I am very pleased that the SEA board and members did not consider my current California connection as a disqualification for president of the Association.     

Filosofische tijbegrippen in de economische wetenschap en het tijdaspect der economische verschijnselen

Summary In this article the author attempts to bridge the gulf between philosophy and economics by tracing the development of two philosophical time concepts in economic science. First the concept of transcendental time connected since the Greeks with ideas about natural laws is discussed and the breakthrough of this concept into economics in the works of the Thomists and the Physiocrats. Secondly the author deals with the concept of immanent time and its influence on the economic thinking of the later members of the historical school in Germany (Sombart and Max Weber). This evolution of time concepts in economics has been accompanied by different views on economic laws. Originally these were interpreted as nature-oriented, metaphysical laws, which are called transcendental apriori's. Later on, especially in the thinking of the classical economists, these laws were regarded as the ultimate starting-points of economic reasoning; in so far they have this meaning they are called cognitive apriori's. The concept of immanent time resulted in the verstehende Methode. The author emphasizes the fact that the two time concepts have always been closely related with ideas about scientific methods: that of transcendental time with the search for premises which embody the ultimate causes of economic phenomena; that of immanent time with investigations layingstress on the historically relative character of those phenomena. The immanent method contributed to the greater differentiation and subjectivation of the premises which for a long time were used in economic theory and also to the development of a specific economic time concept. This concept comprises the abstract theoreticalperiod as well as its practical counterpart, theterm, which is used in empirical analysis in order to determine the factual length of these periods.

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Op deze plaats wil ik gaarne mijn grote erkentelijkheid uitspreken jegens prof. dr. P. Hennipman, prof. mr. dr. K. Kuypers, prof. dr. H. A. J. F. Misset, mevr. drs. E. M. Barth, drs. J. H. Brussee, drs. J. P. J. Fit en drs. H. Leliveld die mij bij het schrijven van dit artikel met raad en daad terzijde hebben gestaan.     

“Cautiously Optimistic” Comments on “Black Americans in the 21st Century: Should we be Optimistic or Concerned?”

This is a commentary on Angel Harris’ examination of the current state and challenges facing the black community. Harris provides a comprehensive overview of the socio-economic status of the black Americans and questions America’s ability to achieve the American “creed of opportunity”. My response to Harris’ question, “Should we be pessimistic or optimistic”, is that I am cautiously optimistic. My optimism is rooted in postsecondary progress of black despite challenges to affirmative action and the lingering test score gap between blacks and whites. However, I am “cautious” about the willingness of policy makers to use “race targeted” or “wealth-based-tested” programs to arrest practices which hinder employment, income and wealth opportunity.     

Presidential popularity and reputation

Summary This paper reports on the results of an empirical study of relationships between the popularity of US presidents and economic variables. Traditionally, these relationships are based on the hypothesis that voters hold the incumbent President responsible for the economic situation. We derive an alternative specification of popularity, based on the hypothesis that political parties perform better on different issues. Empirical evidence turns out to be strongly in favour of our hypothesis. Our findings have important implications for studies on government behaviour in which it is assumed that one of the objectives of administrations is to maximise votes.I am indebted to J.C. Siebrand, A.S. Brandsma, G.E. Hebbink, N. van der Windt and an anonymous referee for many useful suggestions.     

The optimal exploitation of exhaustible resources,a survey

Summary In this article a survey is given of the economic theory on the optimal exploitation of exhaustible resources. Attention is paid to Hotelling's pioneering work, the specification of welfare objectives, open economies, extraction costs, uncertainty, research and development and the relation between optimal economic growth and optimal extraction.I am indebted to C. Elbers, T. van der Meij, R. Ramer and H. Weddepohl for helpful comments.     

Income distribution as an objective in development planning

Summary In an input-output framework, income distribution among classes depends on final demand. Traditionally, it has been assumed that the policy-maker selects a distribution vector maximizing his preference function, and it has been attempted to determine this function by an interview. Here, we assume that the policy-maker does not know his preference function but constructs its relevant parts in a communication process with his adviser. This process converges to a (classwise) Pareto-optimal distribution vector and under some further assumptions, any such vector may be attained in principle. Colombian data are used for illustration.I am indebted to Dr. Jacques Melitz for improving my English and to Mr. Roland Fahrion for computational assistance. Nevertheless, I assume sole responsibility for any remaining deficiencies of this paper.     

国际企业孵化网络研究的图谱分析——基于SSCI数据库20年以来文献的科学计量

随着知识经济和信息技术的发展,创业网络在20世纪末以来被赋予新的涵义,企业孵化网络作为其重要的一个分支近年来获得了更多的关注。但受制于创业情景中体制、经济、文化等差异的影响,企业孵化网络尚未形成一个一致的理论分析范式。基于此,文章应用科学计量方法对其研究的力量分布、热点分布以及未来趋势进行分析,系统阐释国外企业孵化网络研究的形成和演进,研究对于相关领域研究方向的选定与规划具有重要的借鉴意义。     

从理性认识自我的角度看当今的反腐自律建设

目前,我国改革已进入关键时段,党风廉洁建设和反腐自律建设关乎着党和国家的前途命运。如何进行反腐建设,怎样反腐更有成效等问题逐渐成为焦点。作为新时期的领导干部,只有做到运用批判性思维审视自我,才能坚定不移地反对腐败;只有运用独立思考能力追溯本源,才能与群众保持血肉联系;只有运用独立判断能力正视自我责任,才能做廉洁自律型干部,才能有助于构造中国特色反腐倡廉的格局。也只有从"我是谁""从哪里来""到哪里去"三个角度出发,才能做到反腐的标本兼治。     

Regulating the Anticommons: Insights from Public‐Expenditure Theory

This article offers a new interpretation of the traditional Cournot complements problem, or anticommons, by using the theory of public goods to gain a perspective on the problem. Specifically, I examine the pricing strategies and regulation of multiple monopolies that produce products which consumers view as perfect complements. I show that collusion by the firms increases total social welfare and that the collusion problem can be reinterpreted as a problem of provision of public goods from the point of view of the firms. I take this insight further and derive the familiar concepts of the Samuelson marginal condition and the ratio equilibrium for the firms. I compare these outcomes to the first best solution and then apply incentive‐compatible mechanisms to strategically implement the Pareto superior ratio‐equilibrium outcome and the optimal marginal‐cost pricing outcome. Finally, I show how this methodology can be applied to the more familiar Cournot model of oligopoly.     

Arrow's impossibility theorem

Summary It is the purpose of this article to give an exact formulation of Arrow's famous impossibility theorem and its proof. Although the results presented here are not new in the sense that the theorem is refuted or questionned, it may be of some interest especially for the reader who wants to get a more or less complete view of the argumentation leading up to the theorem. Special attention is paid to the logical structure of the argument in the conviction that a lot of misunderstanding exists about what Arrow and subsequent writers tried to say. By way of introduction to the central theme some remarks are made concerning the relation of the Arrow problem to welfare economics.The author would like to thank Mr. W. R. de Jong of the Department of Philosophy of the Free University for his valuable advice in the field of logic and in particular Keimpe Reitsma, student of economics at the Free University, for the extensive discussions which formed an indispensable element in realizing this article. Thanks are due also to two referees for their useful suggestions.During the preparation of this article I was Assistant Professor at the Faculty of Economics, Free University, Amsterdam, The Netherlands. At present I am with the Ministry for Social Affairs, Directorate for General Economic Affairs.