The decline and fall of US foreign aid

Foreign aid, once hailed as “the most unsordid act in history”, is in deep trouble. Despite the exhortations of the Pearson Report¹, the call for sweeping reform by various governmental commissions and the annual plea to Congress of the Agency for International Development (AID), economic assistance is rapidly declining, and the future looks even bleaker.     

University-industry links: Government as blacksmith

With continuing high inflation, declining productivity, negative trade balances and other indicators pointing to diminishing technology leads in the United States, considerable emphasis is being placed on the role of technology innovation in increasing productivity and international trade competitiveness and in combatting inflation. One element in creating an environment more receptive to technology innovation is establishing appropriate linkages between universities, industry and government. Traditional linking mechanisms between universities and industry may not be adequate or flexible enough to meet the challenges of the next several decades. Based upon findings at several Congressional hearings, there is a need to encourage new mechanisms linking universities and industry. Several legislative initiatives have been proposed in the 96th Congress which would encourage such university-industry linkages.     

Toward an Understanding of Dynamic Moral Decision Making: Model-Free and Model-Based Learning

In business settings, decision makers facing moral issues often experience the challenges of continuous changes. This dynamic process has been less examined in previous literature on moral decision making. We borrow theories on learning strategies and computational models from decision neuroscience to explain the updating and learning mechanisms underlying moral decision processes. Specifically, we present two main learning strategies: model-free learning, wherein the values of choices are updated in a trial-and-error fashion sustaining the formation of habits and model-based learning, wherein the brain updates more general cognitive maps and associations, thus sustaining flexible and state-dependent behaviors. We then summarize studies explaining the neuro-computational processes of both learning strategies—the calculation of prediction errors and valuation. We conclude by emphasizing how the incorporation of dynamic aspects in moral decision making could open new avenues for understanding moral behaviors in a changing world.     

New small firm survival in England

This paper investigates the determinants of the survival, between 2001 and 2004, of 622 small firms in England. Seventy one percent of these firms were less than 5 years old in 2001. Prior work by industrial economists has primarily focussed upon factors such as profitability and exit barriers. In contrast, this paper adopts a more managerial approach by examining whether the human capital of the business owner and organisational variables explain survival and non-survival. Our results suggest the founder’s education and bank finance promote firm survival. Firms which compete on price, or report being financially constrained at start-up, are much less likely to survive.

GLS detrending-based unit root tests in nonlinear STAR and SETAR models

We extend GLS detrending procedure to testing for unit roots against STAR and SETAR alternatives. Monte Carlo simulations and applications to DM/Yen real exchange rates demonstrate that GLS detrending-based nonlinear unit root tests are more powerful than OLS detrending-based counterparts.