SPECIALIZATION AND TRADE: A GAME THEORETICAL APPROACH

Abstract.  In this paper we consider the problem of specialization and trade for large economies with a continuum of ex ante identical individuals and with a finite number of goods. Different from the classical treatment, we adopt a game theoretical approach. Therefore in our models the prices of traded goods are endogenously formulated according to the bidding strategies of the producer-consumers. Furthermore, we assume that in the beginning individuals randomly choose their professions. As a result, with a short-run Nash equilibrium different types of professionals may have different utility levels; while through a dynamic process, a long-run Nash equilibrium with utility equalization is reached. Besides, we also attempt to provide a new algorithm for the computation of general equilibrium models in the Yang-Ng framework.     

TESTING FOR INVERSE HOMOTHETICITY: A NONPARAMETRIC APPROACH

The efficiency of a decision-making unit can be estimated relative to the direct output possibility set or the indirect (cost-constrained) output possibility set. For the direct and indirect output sets we show that the ratio of two Farrell (radial) efficiency measures equals the ratio of two Zieschang (non-radial) efficiency measures if and only if the production technology is inverse-homothetic. A consequence of inverse homotheticity is that the input and output expansion paths are linear.     

ACCOUNTING FOR RESOURCE DEPLETION: A MICROECONOMIC APPROACH

The theoretical basis of a practical method of accounting for depletion of mineral resources is presented. Rent rises at the rate of interest, but depletion does not. Rent is equal to the sum of depletion and depreciation less any opportunity cost of present production as compared to waiting. Depletion follows a path which is dependent on the depreciation formula chosen by the accountant. The approach is compared to the methods proposed by the BEA in 1994.     

EVALUATING RATIONAL PARTISAN BUSINESS CYCLE THEORY: A RESPONSE*

In a recent article published in this journal Steven Sheffrin presented the results of two tests on the so called “Rational Partisan Theory”. Sheffrin concluded that the evidence provides “little support for a strict interpretation of the theory”. This note argues that, although interesting in itself, the tests performed by Sheffrin are not particularly informative about the empirical relevance of the Rational Partisan Theory. Also, this note reconciles Sheffrin's results on OECD economies with the literature, which, in general, has found rather supportive evidence for the Rational Partisan Theory.     

A THEORETICAL FRAMEWORK FOR THE MEASUREMENT OF WELL-BEING

The conceptual framework of the system specifies that societal resources are limited by two basic factors: the amount of available human time, and the stock of wealth inherited from the past. Wealth is defined very broadly to cover not only the conventional tangible capital assets familiar to economists, but also intangible human and other capital assets, stocks of organizational capital reflected by networks of social support systems (the family, the neighbourhood), stocks of environmental assets (the sun and air), and stocks of socio-political assets (security, freedom of choice). Human time covers market work, household production, leisure, and biological maintenance. Human time and capital stocks are used within households to produce a variety of tangible and intangible outputs, and these outputs in turn are used to produce a variety of satisfactions (utilities) or to augment stocks of capital, or both. The basic sources of well-being in the system are ultimately of two types: well-being is produced as a consequence of the intrinsic benefits from all activities engaged in by individuals, which is to say that people have preferences over the way they spend their time; secondly, people derive utilities from the existence of various stocks or states of society, and these satisfactions are independent of the way in which time is used. The satisfactions associated with flows of goods are subsumed by satisfactions derived from activities associated with those goods. The system contains a set of linkages among the various parts: inputs of goods and time are used to produce tangible household output, using the familiar notions of household production functions and constrained optimization; tangible household products, which are intermediate in the system, are used in conjunction with human time to produce direct satisfactions or to augment household capital stocks; both household (micro) and societal (macro) capital stocks are linked directly to psychological well-being; household activities are linked directly to flows of satisfactions, termed process benefits in the system; household preferences and values relating to policy variables are linked to public policies of various sorts, and policies modify the constraints and opportunities relevant for household decisions. The system also has dynamic linkages. Modifications of household or public stocks produce impacts on future flows of well-being; satisfactions from activities may adapt to the existence of constraints, hence changes in constraints can modify preferences and subsequently modify activities; and household behavior has a life-cycle dimension which is inherently dynamic.     

JAPAN: THE CASE FOR A TAYLOR RULE? A SIMPLE APPROACH

Abstract.  In this article I propose two different models for analyzing the conduct of monetary policy, facing certain expectations. The first is a autoregressive model, which implicitly accounts for adaptive expectations, while the second accounts for the rational expectations. I used these models to judge whether or not the Taylor rule can be a good benchmark for the conduct of monetary policy in Japan. The conclusion is that a simple AR model fits the data better than the Taylor rule, and that assuming rational expectations in Japan could be highly misleading, at least since the mid-1990s.     

COMMENT: TESTING FOR INVERSEHOMOTHETICITY: A NONPARAMETRIC APPROACH*

This paper starts from Fukuyama and Weber's (2004 ) work on testing for inverse homotheticity to show that the equality of the output gain function and the Zieschang output gain function is not equivalent to inverse homotheticity. Hence, testing for the equality of these gain functions cannot prove that a technology is inverse homothetic. Moreover, it is established that the gain functions are equal if and only if the direct and indirect isoquant and the corresponding efficient set are equal, which does not depend on inverse homotheticity.     

THE PARTISAN MODEL OF MACROECONOMIC CYCLES: MORE THEORY AND EVIDENCE FOR THE UNITED STATES*

The “Partisan Theory” of macroeconomic policy is based on the idea that political parties typically weight nominal and real economic performance differently, with left-party governments being more inclined than right-party ones to pursue expansive policies designed to yield lower unemployment and higher growth, but running the risk of extra inflation. Given suitable assumptions about the structure of the macroeconomy, partisan models imply a political signal in demand management, output and inflation movements originating with shifts in party control of the government. In this paper I develop and test with postwar US data a revised Partisan model that allows for (i) uncertainty among policy authorities about the sustainable output growth rate and therefore about how aggregate demand expansions will be partitioned between extra output and extra inflation, and (ii) ex-post and projective learning and preference adjustment under such uncertainty. Dynamic numerical analysis of a small, stylized political-economic model based on these extensions of Partisan Theory generates within-sample forecasts that correspond remarkably well to the observed pattern of price, output and nominal spending fluctuations under the parties.     

COMPETITION POLICY FOR DEVELOPING COUNTRIES: A LONG-RUN, ENTRY-BASED APPROACH

This paper describes key aspects of a long-run, entry-based approach to the design of competition policy for developing countries. A competition policy with the sole purpose of mitigating governmental, natural, and artificial barriers to entry best serves the goals of promoting the competitive process and fostering democracy. Freedom of entry is the sine qua non of the competitive process. Freedom of entry promotes the development of efficient, innovative firms capable of competing in international markets and ensures that market reforms will enhance social welfare.     

中国农村劳动力返乡:基于人力资本回报的理论和实证分析

本文借鉴刘易斯二元经济发展模型和托达罗模型,构造了农村劳动力两阶段迁移理论模型,理论分析表明,农村劳动力返乡是理性选择,原因是其人力资本回报在欠发达地区要高于发达地区。随后,本文利用2007年5月调查获得的中西部70个县2353位返乡农村劳动力数据,利用改进后明瑟尔收入模型,比较这个群体在发达地区与欠发达地区的人力资本回报率,验证了理论模型的分析结论。     

A NOTE ON THE AGGREGATION BIAS IN CURRENT PROCEDURES FOR THE MEASUREMENT OF TRADE BARRIERS

For purposes ranging from practical commercial policy matters to the testing of theoretical trade models, economists have utilized aggregate data relating to tariffs and non-tariff barriers (NTBs) across countries. However, the statistics employed in these analyses are generally derived using aggregation procedures which are based on weights relating to trade that occurs under restrictions. While it is recognized that this approach incorporates a bias in the resulting averages, due to the fact that the products facing the highest tariffs or NTBs enter the calculation with relatively low (actual) trade weights, little information is available for quantifying the magnitude of this bias. This study provides such empirical evidence and also proposes indices that overcome some shortcomings of the traditional measures.     

A SYSTEMS APPROACH TO THE DEMAND FOR ALCOHOL AND TOBACCO

This paper adopts a systems approach to estimate budget share equations for four categories of alcoholic drinks and for tobacco, using quarterly expenditure data for the period 1964 to 1983. The emphasis is on the importance of the tolerance effects of addiction and on the smoker's participation decision in correctly specifying the model of demand. The model makes explicit recognition of a separate participation decision and the estimates suggest that there is something to be gained by introducing variables to indicate changes in the distribution of income and the demographic structure of the population.     

A PROTECTIONIST BIAS IN MAJORITARIAN POLITICS: AN EMPIRICAL INVESTIGATION

Do politics affect trade policy? Despite an extensive literature examining the relationship between trade policy and some political factors, relatively few studies have explored the role of a country's electoral system, arguably one of the most fundamental characteristics of a nation's political landscape. This paper examines the empirical relationship between tariffs and electoral systems across countries and over time. The broad theoretical framework is provided by Grossman and Helpman, which predicts a bias towards a non‐zero average tariff, i.e. a “protectionist bias”, in countries with majoritarian systems, since politicians in a majoritarian system aim to maximize the welfare of their home districts, as opposed to the welfare of the nation as a whole. I compare average tariffs of countries with majoritarian systems to those with proportional systems, using methods that address the omitted variables/sample selection problem inherent to this analysis. I find that countries with majoritarian systems do indeed appear to have higher average tariffs than do countries with proportional systems. This result holds after controlling for other country‐specific characteristics, such as a country's legal origins, colonial history, and geographic location.     

关税结构的政治经济学解释-基于"保护待售"模型的博弈分析

根据有效保护率理论,由上游至下游逐级递增的梯形关税结构将提高一国最终商品的有效保护程度。但在以美国为代表的西方代议民主制国家,由于利益集团的游说影响,政府的贸易政策并非时刻遵循梯形关税结构的设置原则,甚至有时反其道而行之。对此,本文以GrossmanandHelpman(1994)的"保护待售"模型为基础,引入中间产品,研究了政府与上下游产业利益集团之间的博弈行为。结论表明,关税结构实为政治经济体系中的内生产物,其形式取决于上下游产业利益集团的组织情况以及最终商品产业之间的实力差异。     

地理信息系统在区域商业和经济中的应用初探

有效地开发和利用地理空间数据，可以优化配置资源，降低商业运行成本，并规划、监测、改善区域商业和经济环境。而地理信息系统，不仅是关于地理数据的获取、存储、转换、分析和表示的原则、方法和工具，而且提供了认识空间现象的思维方式和解决空间问题的方法，可用于定义、分析、表现复杂的空间经济现象。基于这样的认识，本文试图从理论上探讨地理信息、商业环境和区域经济发展间的关系，并结合中国广东的区域经济状况，初步分析地理信息系统在商业和区域经济中的潜在应用。     

NEED FOR A SHIFT FROM A PHILANTHROPIC TO A HUMANISTIC APPROACH TO CORPORATE SOCIAL RESPONSIBILITY

As part of their business practices, the Indian government has made it mandatory for companies who have a turnover of 500 crores and above to spend 2 per cent of their net profits from the immediately preceding three financial years on corporate social responsibility (CSR). This article proposes to examine the issue of whether this enforced philanthropic responsibility of companies is helpful to both society and the organization. With the philanthropic approach it is not necessary for the organization to fulfill its responsibilities toward those who work in and for the organization, its customers and to the ecological system in general. Achieving both organizational growth and social development requires a shift from a philanthropic approach to a humanistic approach on the part of companies and the government, accommodating all its stakeholders.     

PUBLIC POLICY SUPPORT FOR AGRICULTURAL COOPERATIVES: AN ORGANIZATIONAL ECONOMICS APPROACH

This paper addresses the issue of whether nontraditional agricultural cooperatives should be eligible for receiving public policy support. We adopt an organizational economics approach that appears to better inform policy design and suggest critical questions that both policy makers and regulators need to address before introducing measures and sanctions. After discussing the introduction of innovative cooperative models characterized by a whole new set of ownership and control rights, we recast vaguely defined property rights problems as attempts to maximize efficiency and avoid organizational decline rather than to take advantage of excessive market power in highly concentrated oligopsonistic/oligopolistic markets.     

TESTING FOR ASSET MARKET LINKAGES: A NEW APPROACH BASED ON TIME‐VARYING COPULAS

This paper proposes a new approach based on time‐varying copulas to test for the presence of increases in stock market interdependence (also known as shift contagion) after a financial crisis. We discuss the importance of considering simultaneously separate breaks in volatility and dependence. Without such consideration, the contagion test turns out to be biased. A sequential algorithm is proposed to tackle this problem. Applied to the recent 1997 Asian crisis, the analysis confirms that breaks in variances always precede those in the dependence parameter. Moreover, a significant ‘J‐shape’ evolution of the dependence parameter is detected, supporting the idea of shift contagion.