The La Marca model revisited: Structuralist goodwin cycles with evolutionary supply side and balance of payments constraints

This research is aimed at investigating the causes of volatility that affect middle‐income countries by studying the La Marca model. Drawing from the open‐economy Goodwin tradition, this model demonstrates that economic activity, income distribution and accumulation of foreign assets dynamically interact, resulting in a pattern of dampened cycles. The study consists in analyzing the characteristics of the model by initially imposing: (I) a constant real exchange rate; (II) a constant net external asset to capital ratio, which is in line with the balance of payments dominance theory and (III) a fixed income distribution. We then (IV) expand the original model by adding an evolutionary supply‐side in which productivity is at the center of the economic dynamic through international technology transfer and the Kaldor‐Verdoorn effect. The results show that (1) the model always converges. (2) The restrictions (I) and (II) remove the cyclical component of the model, which highlights a central difference between La Marca and the original Goodwin model. (3) Fixed income distribution leads to a monotonic trajectory that reduces oscillations. (4) The inclusion of productivity dynamics generates new sources of volatility in the relationship between productivity, capacity utilization and net external assets and is in line with the structuralist argument of structural fragility.     

Long‐term Effects of the Efficiency Wage Hypothesis in Goodwin‐type Economies

The existence of an efficiency wage mechanism in Goodwin‐type models may lead to the unexpected appearance of an economically meaningful equilibrium with zero labour share, which is globally stable for some parameter constellation and allows the system to attain its ‘maximal growth'. A subsequent ‘normative’ comparison between the possible long‐term regimes of the economy shows that (1) the zero labour share equilibrium can be the ‘preferred’ equilibrium in terms of welfare; (2) in all the long‐term regimes the welfare is higher than in the original Goodwin model; (3) a point of maximal welfare exists. Moreover, the effects of rational behaviour of firms are compared with the ‘traditional’ situation in which rationality is not explicitly assumed. A striking result appears: myopic rationality can have deleterious effects on the profit of firms and on the overall welfare of the economy.     

A Kaldor–Hicks–Goodwin–Tobin–Kalecki model of growth and distribution

This paper presents a Kaldorian model of growth that incorporates both Kaldor's theory of income distribution and his endogenous technical progress function. Growth is driven by demand‐side forces that induce supply‐side accommodation. The model incorporates Hicksian induced innovation; Goodwin Marxist style labor conflict that affects wage bill division between workers and managers; Tobin inflation effects; and Kalecki monopoly power effects. Unlike the neo‐Kaleckian model, a Kaldorian economy operates at normal capacity utilization. Monopoly power plays a role as a barrier to entry rather than determining the functional distribution of income.     

Empirical performance of alternative pricing models of currency options

This article examines the out‐of‐sample pricing performance and biases of the Heston’s stochastic volatility and modified Black‐Scholes option pricing models in valuing European currency call options written on British pound. The modified Black‐Scholes model with daily‐revised implied volatilities performs as well as the stochastic volatility model in the aggregate sample. Both models provide close and similar correspondence to actual prices for options trading near‐ or at‐the‐money. The prices generated from the stochastic volatility model are subject to fewer and weaker aggregate pricing biases than are the prices from the modified Black‐Scholes model. Thus, the stochastic volatility model may provide improved estimates of the measures of option price sensitivities to key option parameters that may lead to more effective hedging and speculative strategies using currency options. © 2000 John Wiley & Sons, Inc. Jrl Fut Mark 20:265–291, 2000     

An Empirical Model of Automobile Engine Variant Pricing

This paper estimates a random-coefficients structural model of the demand for car model engine variants. It uses a new identification approach that assumes the mean unobserved quality is the same for all engine variants within a model. The demand estimates imply that absolute markups increase in horsepower within a car model, while percentage markups are constant or falling in horsepower. The estimated results–as well as simulations of a simple theory model–show that prices are not typically cost-plus-fixed-fee, and absolute markups may increase in quality.     

An Analysis of Mercosur's Regional Trading Arrangements

After six years of stop‐start negotiations, Mercosur is no closer to signing a regional trading agreement (RTA) with the EU, whilst negotiations to finalise a Free Trade of the Americas Agreement (FTAA) have also stalled. This is due to various factors: economic crises in Mercosur, intransigence by member countries and uncertainty surrounding the outcome of the Doha Round. Estimates from the trade literature predict welfare gains to Mercosur from both RTAs whilst only one study assesses the additional benefits of removing non‐tariff barrier (NTB) trade costs which have remained largely unchallenged within the multilateral forum. In this paper, we improve the treatment of NTB estimates employing a theoretically consistent gravity specification, where calculated tariff‐equivalent estimates are subsequently implemented into a modified computable general equilibrium (CGE) model. Relative to a realistic baseline, and incorporating trade‐induced productivity and capital accumulation effects, we reassess the benefits of both regional initiatives to Mercosur, revisiting the claim that NTB trade cost abolition doubles the ‘standard’ welfare estimates. Contrary to previous studies, the results suggest that an FTAA yields greater gains to Mercosur than an EU RTA whilst the claim of Monteagudo and Watanuki (2003 ) pertaining to trade cost elimination is understated.     

Feature-based attributes and the roles of consumers' perception bias and inference in choice

This paper considers decision contexts wherein consumers make choices among alternatives that contain a manifest feature-based attribute: i.e., a discrete, salient and important attribute that describes a dichotomous quality, such as “genetically modified”, “organic”, or “locally grown”. We propose a choice model that can explicitly account for a) perception bias with respect to such an attribute when its information is present, and b) inference formation if this attribute information is missing for some alternatives. The impact of different information presentation formats on consumers' perception bias and inference formation is then examined by applying theories from social psychology. Our model outperforms standard Random Utility models that omit explicit representation of these phenomena. Consistent with theories considered, we find significant evidence of perception bias and inference in the choice data. Our results also provide insights on how consumers may infer the quality of a missing attribute in different competitive framing contexts. Finally, our welfare estimates show that consumers may benefit simply from the information improvement regarding government labeling policies.     

用于步进频连续波雷达旁瓣抑制的自适应CLEAN技术

为了解决步进频连续波雷达中的强目标距离旁瓣掩盖弱小目标问题,对步进频自适应脉压算法(SFCW-RMSMIL)进行修正,并联合修正SFCW-RMSMIL算法和CLEAN技术,提出了一种新的自适应CLEAN算法（A-CLEAN）。该算法解决了弱小目标能量严重压制问题,同时还能精确估计各目标的幅度和位置,提高了雷达对弱小目标的检测能力。最后利用仿真数据、实测数据以及蒙特卡洛实验验证了新提出的A-CLEAN算法的有效性和实用性。     

AN ANALYSIS OF THE DECISION TO FILE,THE DUMPING ESTIMATES,AND THE OUTCOME OF ANTIDUMPING PETITIONS

The goal of this article is to identify industries filing successful petitions in good times according to demand, capacity utilization, concentration, and import-penetration ratio under the U.S. antidumping procedures and using U.S. data. Good times means that the domestic industry is facing increasing consumption prior to filing. This article examines: (a) the relation between the dumping estimates and the conditions facing the petitioning industry prior to filing; (b) the relation between the dumping estimates and the outcome of the petitions; and (c) the factors affecting the probability of filing, the dumping estimates, and the probability of success of a petition. The decision to file and the probability of success of petitions are estimated using univariate probit and a bivariate probit model with sample selection. The dumping estimates are analyzed using a Tobit model. The primary metal products and the stone and concrete industries are also analyzed separately. The empirical analysis indicates that the import-penetration ratio, capacity utilization, and the dumping estimates by the Department of Commerce (DOC) are the significant factors in explaining the outcome of the petitions. The import penetration ratio, the concentration level, and the interaction of concentration and capacity utilization are the significant factors in explaining the decision to file. The analysis shows that in case of high-capacity utilization (proxy for high demand), less concentrated industries are more likely to file, but highly concentrated industries are more likely to receive protection. The results also show that the level of concentration of the petitioning industry, import-penetration, and the dumping estimates provided by the petitioning industries explain the dumping margins estimated by the DOC as the basis for the antidumping duty. This suggests that the relief or protection that the petitioning industry receives may not entirely be based on technical standards.     

Ethical concerns in grievance arbitration

Although the use of arbitration has become commonplace in the organizational world, the ethical issues surrounding arbitration have never been fully explored. The paper reviews ethical issues in arbitration, particularly in terms of forensic bias parallels, that may affect decision-making and make the arbitrator's decision questionable. Finally, the maintenance of fairness in the arbitration process, and the importance of an ethically acceptable system of organizational justice are also discussed.Robert A. Giacalone is Associate professor of Management Systems at the E. Claiborne Robins School of Business, University of Richmond. He is co-editor (with Paul Rosenfeld) ofImpression Management in the Organization (Erlbaum, 1989) andApplied Impression Management (Sage, 1991) and has authored papers on business ethics, organizational sabotage, exit interviewing, and impression management in organizational life. His work has appeared inHuman Relations, Business and Society Review, Journal of Business Ethics, andJournal of Social Psychology, as well as in a variety of other journals.James C. Goodwin is Professor of Management at the University of Richmond. He previously taught at the University of North Carolina and at Florida State University and served as a petroleum engineer with Chevron and Atlantic-Richfield. Dr. Goodwin is the author of numerous articles which have appeared in national and international journals.Martha L. Reiner is Assistant Professor of Management at the E. Claiborne Robins School of Business, University of Richmond. She received her Ph.D. in business and public policy. She has co-authored articles that appeared in theCalifornia Management Review and theNonprofit and Voluntary Sector Quarterly.The authors would like to thank Hinda Greyser Pollard for her insightful comments on a previous draft of this paper.     

Estimating national road crash fatalities using aggregate data

Injuries and fatalities from road traffic crashes have emerged a major public health challenge in Pakistan. Reliable estimates of road crash fatalities (RCF) of a country, is a vital element needed for identification and control of key risk factors, road-safety improvement efforts and prioritizing national health. Reliability of current annual RCF estimates for Pakistan becomes highly questionable due to serious underreporting. This study aimed to predict annual RCF for Pakistan using data from World Health Organization and International Road Federation sources. An ordinary least square (OLS) regression model that relates fatality rate with different explanatory variables was developed. RCF were predicted for Pakistan for year 2012 and 2013, and results were compared with national police reported estimates. Study results indicated that there is serious underreporting of RCF in Pakistan and immediate measures are needed to improve the existing road crash recording and reporting system at the national and subnational levels.     

Financial densities in emerging markets: an application of the multivariate ES density

This paper derives and presents the multivariate Edgeworth–Sargan (ES) density, discusses some of its properties, and estimates it for three exchange rates in emerging markets (Chile, Hungary and Singapore). The ES density fits the data adequately, and the model is estimated simultaneously for all variables. This involves estimating a highly non-linear model with 32 parameters. A multivariate Student's t is also estimated, and both sets of results are compared. The empirical results show that, (a) the ES density applies to emerging markets as well as to more developed economies, as shown in previous research, (b) it is feasible to estimate a multivariate density of large dimensionality, and (c) independent estimation of the marginal densities, although a consistent procedure, yields significantly different results from the multivariate estimation for some parameters.     

Spatial differentiation in the supermarket industry: The role of common information

In this paper, I investigate the geographic location decisions of supermarkets to infer their tradeoffs between locating close to favorable demand conditions and differentiating themselves geographically from rivals. The model is based on a discrete-choice game between two types of supermarkets, and incorporates firm uncertainty arising from firm- and location-level private information as well as researcher uncertainty arising from location-level common information. Thus the model addresses the concern that firms’ actions may be based on factors that are unobservable to the researcher, thus correlated conditional on observables. The estimates reflect a significant level of common information. Importantly, I find that ignoring unobserved location heterogeneity results in biased estimates of both the competitive effects and the effects of location-specific observables on profits. Counterfactual predictions are therefore misleading if unobserved location heterogeneity is unaccounted for.     

The Information Content of Model‐Free Implied Volatility

This study examines the information content of model‐free implied volatility (MFIV) estimates with respect to the options and futures markets in Hong Kong. In this study, the volatility forecasting performance of MFIV is compared, using different prediction horizons, to IV estimates based on Black's futures option pricing model (BIV) and time‐series forecasts based on historical volatility (TS‐HV). The results show that the BIV prediction is unbiased for different horizon forecasts. MFIV outperforms TS‐HV forecasts and, most importantly, BIV subsumes the information content of both MFIV and TS‐HV forecasts. The results are largely maintained for next‐day forecasts but the forecasting quality of the two IV measures declines as expiration day approaches. The information contents of MFIV and TS‐HV forecasts are complementary. © 2012 Wiley Periodicals, Inc. Jrl Fut Mark 32:792‐806, 2012     

我国适度外汇储备的定量分析

长期以来我国拥有大规模的外汇储备规模,且这个储备量还在连年递增。我国是否真的需要如此巨大数额的外汇储备,如何评定当前储备规模的合理度,一直是我们关注的焦点。本文运用修正的Agarwal模型,自1994年以来的宏观经济数据推导出较为适度的估计值,同时对比期间真实储备值,得出2001年后我国实际的外汇储备严重偏离估计值的结论。     

The World Trade Organisation's Doha Cotton Initiative: A Tale of Two Issues

Four West African nations have demanded that the WTO's Doha Development Agenda include a Cotton Initiative that involves two issues: cutting cotton subsidies and tariffs, and assisting farm productivity growth in Africa. This paper provides estimates of the potential economic impacts of (a) complete or partial removal of cotton subsidies and import tariffs globally and (b) cotton productivity growth through the adoption of genetically modified (GM) cotton varieties. Use is made of the GTAP database and global economic model to address both these issues. On Doha, our results confirm that for cotton – unlike for other agricultural subsidies and tariffs – it is subsidy reductions rather than tariff cuts that would make by far the largest impact. For Sub‐Saharan Africa the potential gains are huge relative to the effects on that region of reforming other merchandise trade policies. And they could be more than doubled if that reform provided the cash for farmers to take advantage of the biotechnology revolution and adopt GM cotton varieties. But those potential gains, and the affordability of switching to costly GM seed, depend crucially on the extent to which high‐income countries are willing to lower domestic support to their cotton farmers.     

Solving and Testing for Regressor-Error (in)Dependence When no Instrumental Variables are Available: With New Evidence for the Effect of Education on Income

This paper has two main contributions. Firstly, we introduce a new approach, the latent instrumental variables (LIV) method, to estimate regression coefficients consistently in a simple linear regression model where regressor-error correlations (endogeneity) are likely to be present. The LIV method utilizes a discrete latent variable model that accounts for dependencies between regressors and the error term. As a result, additional ‘valid’ observed instrumental variables are not required. Furthermore, we propose a specification test based on Hausman (1978) to test for these regressor-error correlations. A simulation study demonstrates that the LIV method yields consistent estimates and the proposed test-statistic has reasonable power over a wide range of regressor-error correlations and several distributions of the instruments. Secondly, the LIV method is used to re-visit the relationship between education and income based on previously published data. Data from three studies are re-analyzed. We examine the effect of education on income, where the variable ‘education’ is potentially endogenous due to omitted ‘ability’ or other causes. In all three applications, we find an upward bias in the OLS estimates of approximately 7%. Our conclusions agree closely with recent results obtained in studies with twins that find an upward bias in OLS of about 10% (Card, 1999). We also show that for each of the three datasets the classical IV estimates for the return to education point to biases in OLS that are not consistent in terms of size and magnitude. Our conclusion is that LIV estimates are preferable to the classical IV estimates in understanding the effects of education on income. JEL Classification: C12, C13, C21, J3, M3     

Estimates of the cost of equity for public utilities, 1961–1976

Using a simple version of the dividend cash flow (DCF) model of stock valuation, the cost of equity for public utilities is often inferred to be equal to the sum of the dividend yield and the expected rate of growth in dividends. Witnesses who employ this approach generally extrapolate past growth patterns into the future and then assume that investors expect these trends to continue; no effort is made to actually assess the expectations of investors. This approach to estimating the cost of equity for public utilities is criticized for the failure to develop testable hypotheses as an inferential basis for testing the statistical reliability of estimates of the cost of equity. This article demonstrates an alternative to the traditional approach, based on the premise that reliable estimates of the cost of equity are derived only within a methodological framework that produces testable hypotheses. The Gordon model of share valuation is formulated in such a way as to show that there is a systematic and predictable relationship between the ratio of market price to book value of common stock and a firm's normal or expected return on equity. This relationship suggests an econometric model that not only tests the Gordon model of share valuation but produces at the same time, inferences concerning the cost of equity. Using this approach, year-end estimates of the cost of equity for electric utilities are determined for the 16-yr period from 1961 to 1976.     

Multi-stage purchase decision models: Accommodating response heterogeneity, common demand shocks, and endogeneity using disaggregate data

The most comprehensive models of purchase behavior for frequently purchased supermarket items explain households' purchase incidence decisions (whether to buy), brand choice decisions (what to buy), and purchase quantity decisions (how much to buy). In this study, we develop a three-stage purchase incidence/brand choice/purchase quantity model for household-level data in which all three stages are specified with (i) random coefficient distributions for model covariates and (ii) random effect distributions to account for unobserved factors affecting demand (known as common demand shocks), while also (iii) controlling for the effects of endogeneity on prices. Compared to current state-of-the-art models for multi-stage purchase decisions, the results show improvements in fit and forecasting accuracy when purchase behaviors are modeled with all of these components in combination. Perhaps more importantly, when common demand shocks are ignored, substantial differences in parameter estimates and diagnostic information about consumer behavior are likely (median differences in parameter estimates are 10% and 20% in two product categories), which impact managerial deliberations about price and promotion policies. Further, failure to account for common demand shocks affects the mean and variance of random coefficient distributions in unpredictable directions, which could produce results that encourage managers to pursue inappropriate and costly micro-level product marketing strategies.