Two destabilizing strategies may be jointly stabilizing

The paper contributes to the literature on learning dynamics with heterogeneous agents, demonstrating that heterogeneity as such may be conducive to stability. The point is made in the framework of the cobweb model, where two different forecast procedures are considered. Either one destabilizes the price dynamics when it is uniformly adopted by all firms, or the price equilibrium becomes locally stable if firms are heterogenous and the two rules are suitably mixed within the population. It is also indicated that such a stabilizing composition is endogenously brought about by an adjustment process in which the population shares evolve under evolutionary pressure.     

The two limits debates: “Limits to Growth” and climate change

In this article we compare the current debate about global warming with the earlier discourse of Limits to Growth (LtG) of the 1970s. We are especially interested in the similarities of and differences between the two cases and therefore compare the policy challenges and lessons to be drawn. While the two debates differ on important issues, they share a technocratic orientation to public policy, and susceptibility to similar pitfalls. In both debates alarming scenarios about future catastrophes play an important role. We suggest that climate change policy discourse needs to focus more closely on the social, economic, and political dimensions of climate change, as opposed to its excessive emphasis on emission reduction targets. We also argue that an excessive faith in the market mechanisms to supply global warming mitigation technologies is problematic. In this respect, we provide a reality check regarding the political implications of emission targets and timetables and suggest how policy issues can be moved forward.     

The Measurement of Prices of Production: An Alternative Approach

This paper analyzes the theoretical and methodological issues related to the empirical measurement of prices of production and wage-profit curves. A number of shortcomings of the standard approach are discussed, focusing in particular on the neglect of capital stock matrices and on the empirically objectionable assumption of uniform profit rates. An alternative approach for the empirical analysis of wage-profit curves and prices of production is proposed and its main properties are investigated using a new dataset on the German economy (1991–99). It is suggested that a Leontief-Bródy approach (augmented by profit rate differentials) is more appropriate for the analysis of wage-profit curves and prices of production than the purely theoretically oriented Sraffa-von Neumann framework.     

Market selection of constant proportions investment strategies in continuous time

This paper studies the wealth dynamics of investors holding self-financing portfolios in a continuous-time model of a financial market. Asset prices are endogenously determined by market clearing. We derive results on the asymptotic dynamics of the wealth distribution and asset prices for constant proportions investment strategies. This study is the first step towards a theory of continuous-time asset pricing that combines concepts from mathematical finance and economics by drawing on evolutionary ideas.     

Converse trading strategies,intrinsic noise and the stylized facts of financial markets

This paper proposes a simple asset pricing model with three groups of traders: chartists who believe in the persistence of bull and bear markets, fundamentalists who bet on a reduction of the observed mispricing, and investors who follow a buy-and-hold strategy. The innovative feature of the model concerns the frequency of trading: rather than remaining constant over time, each agent in a group is only assumed to become active with a certain probability over a given market period. Depending on the trading strategy, part of this elementary kind of intrinsic noise is additive and another part is multiplicative. Using bootstrap and Monte Carlo methods, it is demonstrated that this combination can contribute to explaining the stylized facts of the daily returns on financial markets, such as volatility clustering, fat tails, and the autocorrelation patterns.     

The results of Manila

The proceedings at UNCTAD V and its results have come in for much harsh public criticism in the world. In view of its modest results it must be asked whether future world trade conferences cannot be rendered more effective.     

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.     

Public debts capitalize into property prices: empirical evidence for a new perspective on debt incidence

In economies with reasonably mobile individuals, the demand for property depends on current as well as future taxes and public services. As a consequence, the current level of public net debts, i.e. public debts minus assets, should capitalize into property prices. While debt capitalization has been unduly disregarded in the academic literature and policy debates, the Swiss Canton of Zurich provides an institutional setting for identification. Our results imply that public net debts capitalize into property prices. The extent of debt capitalization seems to be substantial but it widely varies over estimation strategies. The existence of debt capitalization offers new perspectives on debt incidence.     

Voting against the separation of powers between legislature and administration

The separation of powers is endogenous to the politico-economic process, and thus to politicians’ self-interest. Only little is known about what really drives politicians’ behavior when shaping institutional rules with respect to the separation of powers. We econometrically compare votes of parliamentary representatives and their constituents on a popular initiative that directly aimed at weakening the separation of powers in 1922 in Switzerland. We analyze whether the strength of individual ties to the public service affect representatives’ behavior, holding constituents’ preferences constant. Our results indicate that while politicians tend to represent their constituents’ preferences, representatives with ties to the public service have a higher probability of supporting the eligibility of public servants for the legislature. Thus, they favor reducing the separation of powers between legislature and administration.