The demand for rental housing: Evidence from the Housing Allowance Demand Experiment

This paper provides new evidence on the price and income elasticities of demand for rental housing by low income households. Housing expenditures of households participating in the Housing Allowance Demand Experiment and receiving housing allowances in the form of a proportional rent rebate are analyzed. These rent rebates experimentally vary the effective relative price of housing and thus enable estimation of the price elasticities. Natural income variation enables estimation of income elasticities. Analysis is carried out using two functional forms and a variety of models of housing dynamics. The estimated income and price elasticities of demand are 0.36 and −0.22, respectively. When the sample is restricted to include only households headed by couples, the elasticity estimates are 0.47 for income and −0.36 for price. These estimates are lower (in absolute value) than have been previously estimated and it is suggested that this may be due to the low-income nature of the sample.     

Money-mediated disequilibrium processes in a pure exchange economy

Studied here are dynamical processes of money-mediated exchange and price adjustment in a pure exchange economy of durables. The processes take place in continuous time and are specified by fields of cones which define admissible trajectories in price-allocation or allocation space. Under strong classical assumptions on preferences and fairly mild behavioral assumptions, stability theorems are proved, showing that our processes converge to price equilibria.     

EQUILIBRIUM GROWTH IN A MONETARY ECONOMY WITH TRANSACTIONS COSTS*

The paper describes a dynamic general equilibrium monetary economy with technological primitives that are consistent with the possibility of asymptotic equilibrium growth. The paper focuses on the relationship between equilibrium financing constraints on investment goods, transaction costs and economic growth. A generalized growth condition is derived that involves both monetary growth rates and transaction costs. The condition is used to show that (i) although inflation taxes can potentially exert a negative influence on long-run economic growth, these growth effects cannot in general be arbitrarily large; and (ii) for some monetary growth rates, money is superneutral in contrast to the models of Stockman and Abel. Numerical work indicates that although the welfare and growth effects of decreasing nominal interest rates from a benchmark are large, the costs associated with raising nominal interest rates from benchmark are not.     

A diagnostic framework for planning

The traditional framework for strategy formulation in the field of business policy is deliberately broad and generalized, so as to encompass an almost limitless number of potentially influential factors. There is also a need for a more focused view, a means for showing similarities and differences among firms and how these relate to strategy formulation—a framework, in other words, that allows companies to be diagnosed by key situational elements and uses these, in turn, to define the appropriate strategy alternatives. What is proposed is a framework based on three familiar key elements—organizational levels, management styles, and stages of growth—integrated with and related to four basic strategy alternatives.     

Book Reviews

Practitioners provide reviews of four recent books. K. G. Peeples finds that Mass Customization by B. Joseph Pine describes a trend to replace mass production with a more responsive and tailored approach. She reports that this emerging direction applies to both manufacturing and service firms. It offers numerous benefits to both the supplier and the customer, such as greater variety, lower cost, and more responsive availability. Next, Martha Dohm examines Corporate Venturing by two academics, Zenas Block and Ian MacMillan. She finds it to be a useful primer on this important subject, although lacking in recent practical examples.
The final two reviews are of books that cite, in part, examples from the same high-technology firms, but cover these from very different perspectives. Vic Prushan assesses Winning in High- Tech Markets by Joseph G. Morone. He reports that this book is built around three detailed case studies, from which four lessons are drawn for corporate managers. Jimmy Loon reviews Lightning Strategies for Innovation by Willard I. Zangwill, another academic. He says that the book offers a seven- step process that primarily will be of value to the less experienced practitioner.