Supply and marginal firms in general equilibrium

For economies with a large number of small firms, price induced changes in supply are decomposed into substitution and entry effects. Marginal firms (those earning zero profit) play a significant role in the determination of the slope of aggregate supply.     

The economic effects of agricultural policy in West Germany

Zusammenfassung Die ?konomischen Wirkungen der Agrarpolitik in Westdeutschland. - In diesem Aufsatz wird ein Modell des allgemeinen Gleichgewichts benutzt, um die Wirkungen der Agrarprotektion auf die gesamte Volkswirtschaft abzusch?tzen bzw. zu ermitteln, wie sich eine Liberalisierung auswirkt. Dabei werden die nationalen, aber auch die von der EG gew?hrten Subventionen berücksichtigt. Es wird simuliert, da? alle an Auflagen gebundenen Subventionen und der implizite Zoll auf Agrareinfuhren in H?he von 54 vH abgeschafft werden. Die Ergebnisse zeigen, da? nach einer Liberalisierung die gesamte Besch?ftigung um rund 4 vH und das Einkommen um etwa 3 vH zunehmen würden. Die Importe landwirtschaftlicher Erzeugnisse würden ebenso steigen wie die Exporte von Sektoren wie der Elektroindustrie und des Maschinenbaus, bei deren Produkten die Bundesrepublik einen komparativen Vorteil hat. Der Agrarprotektionismus verursacht also viel h?here Kosten als nur die, die sich im ?ffentlichen Haushalt und in den Preissteigerungen für die Verbraucher zeigen.

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Résumé Les effets économiques de la politique agricole en Allemagne de l’Ouest. - Dans cet article les auteurs appliquent un modèle de l’équilibre générale pour évaluer les conséquences de la protection agricole ou d’une libéralisation. Les subventions sur le niveau national et international sont considérées. Les auteurs simulent une élimination de toutes les subventions liées à un but spécifique et du tarif implicite sur les importations agricoles de 54 pourcent. Les résultats démontrent qu’après une libéralisation l’emploi agrégé accro?traient à peu près par 4 pourcent et le revenu par 3 pourcent. Les importations agricoles accroissent aussi bien que les exportations des secteurs - comme par example de la construction des machines électriques et mécaniques - où l’Allemagne de l’Ouest possède un avantage comparatif. La protection agricole implique des co?ts beaucoup plus hauts que ceux qui sont reflétés dans le budget publique et dans les augmentations des prix au consommateur.

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Resumen Los efectos económicos de la política agraria en Alemania Occidental. - En este trabajo se utiliza un modelo aplicado de equilibrio general para investigar las consecuencias de la protección al sector agrario y de una liberalizatión sobre toda la economía. Se toman en cuenta subsidios tanto a nivel nacional cómo a nivel de la Comunidad. Se simula la eliminación de todos los subsidios condicionales y del arancel implícito sobre las importaciones agrarias del 54%. Los resultados muestran que bajo una liberalizatión el empleo agregado incrementaría en un 4 % y el ingreso en un 3 %. Las importaciones de productos agrarios aumentarían, como también las exportaciones de sectores como ingeniería eléctrica y mecánica, en los cuales Alemania goza de ventajas comparativas. Se concluye que la protección al sector agrario genera más costos que aquellos que se reflejan en el presupuesto nacional y en incrementos de los precios al consumidor.

     

Hedonic prices indexes for new passenger cars in Portugal (1997–2001)

This paper evaluates the effects of quality change on the price index for new passenger cars in Portugal for the years 1997–2001. Hedonic regression models are studied, giving particular emphasis to the relation between the form of the price index and the econometric techniques used for inference. The results of the empirical part of the paper indicate that during this period the changes in the quality of new cars sold in Portugal are responsible for price increases averaging 4.8% per year. Because this quality change was not entirely taken into account, in recent years the CPI component corresponding to the sales of new passenger cars may have been overestimated by as much as 2.2 percentage points per year. This corresponds to an overestimation of the overall CPI by about 0.15 percentage points per year.     

Improving Statistics on International Migration in Asia

International migration has reached unprecedented scale, diversity and political, economic, social and demographic significance in Asia over the last decade. Despite this data collection of migrant stocks and flows remains very limited in most Asian countries. Accordingly, policy making on migration in the region lacks an evidence base and is influenced by interest groups, anecdotal evidence and prejudice. This paper argues that the heightened security consciousness since 911 together with the development of efficient computer based collection and analysis of migration data systems has created a propitious environment for bringing about a parametric improvement in data collection on international migration in Asia. A number of suggestions are made in this regard, especially the inclusion of relevant international migration questions in the 2010 round of population censuses.     

Monetary Union and the Transaction Cost Savings of a Single Currency

This paper computes the transaction cost savings derived from the European Monetary Union. A continuoustime, stochastic, Baumol-like model is generalized to include several currencies and calibrated to fit European data. The analysis implies an upper bound for the savings derived from reductions in transaction costs of approximately 0.69% of Union GDP. Additionally, the magnitudes of the brokerage fee and the volatility of transactions, whose estimation has traditionally been difficult to address empirically, are approximated for Europe.     

Walrasian equilibria as limits of noncooperative equilibria. Part II: Pure strategies

We examine the connection between Walrasian equilibria of a limit economy (with infinitesimal firms) and noncooperative (Cournot) equilibria of approximating finite economies (with significant firms). Nonconvex production sets, decreasing returns in the aggregate, and endogenous determination of the number of active firms are allowed. A Walrasian equilibrium is a limit of pure strategy noncooperative equilibria only if a condition (loosely analogous to downward sloping demand in the partial equilibrium constant returns to scale case) holds. The condition is also sufficient to guarantee the existence of a robust sequence of pure strategy noncooperative equilibria which converges to the Walrasian equilibrium.     

CONTINUOUS PREFERENCE ORDERINGS REPRESENTABLE BY UTILITY FUNCTIONS

This paper surveys the conditions under which it is possible to represent a continuous preference ordering using utility functions. We start with a historical perspective on the notions of utility and preferences, continue by defining the mathematical concepts employed in this literature, and then list several key contributions to the topic of representability. These contributions concern both the preference orderings and the spaces where they are defined. For any continuous preference ordering, we show the need for separability and the sufficiency of connectedness and separability, or second countability, of the space where it is defined. We emphasize the need for separability by showing that in any nonseparable metric space, there are continuous preference orderings without utility representation. However, by reinforcing connectedness, we show that countably boundedness of the preference ordering is a necessary and sufficient condition for the existence of a (continuous) utility representation. Finally, we discuss the special case of strictly monotonic preferences.     

On domain modelling of the service system with its application to enterprise information systems

Information systems are a kind of service systems and they are throughout every element of a modern industrial and business system, much like blood in our body. Types of information systems are heterogeneous because of extreme uncertainty in changes in modern industrial and business systems. To effectively manage information systems, modelling of the work domain (or domain) of information systems is necessary. In this paper, a domain modelling framework for the service system is proposed and its application to the enterprise information system is outlined. The framework is defined based on application of a general domain modelling tool called function-context-behaviour-principle-state-structure (FCBPSS). The FCBPSS is based on a set of core concepts, namely: function, context, behaviour, principle, state and structure and system decomposition. Different from many other applications of FCBPSS in systems engineering, the FCBPSS is applied to both infrastructure and substance systems, which is novel and effective to modelling of service systems including enterprise information systems. It is to be noted that domain modelling of systems (e.g. enterprise information systems) is a key to integration of heterogeneous systems and to coping with unanticipated situations facing to systems.     

Delegation and the Regulation of Risk

Political principals typically use low-cost “fire-alarm” signals transmitted by the media, interest groups, and disaffected constituents to monitor the activities of regulatory agencies. We argue that regulatory decision making is biased and inconsistent if the instruments of political oversight are simple and the information flows to the principal are coarse relative to the complexity of the regulatory environment.Journal of Economic LiteratureClassification Numbers: D72, L51.