A Note on Affordability and the Optimal Share Price

Despite the increase in institutional ownership, decreased trading costs, and increased real personal savings, we find that the average stock price is lower today than it was in the 1920s. In the aggregate, the propensity to split is a function of recent market performance, personal savings, and the desirability of appearing to be a small firm. Our results indicate that, after decades of inflation and the average stock price falling, splitting stocks to return to an "affordable" trading range must be rejected as an explanation. This suggests that other economic forces are behind splits, whether traditional or behavioral in nature.     

Stochastic imitative game dynamics with committed agents

We consider models of stochastic evolution in two-strategy games in which agents employ imitative decision rules. We introduce committed agents: for each strategy, we suppose that there is at least one agent who plays that strategy without fail. We show that unlike the standard imitative model, the model with committed agents generates unambiguous infinite horizon predictions: the asymptotics of the stationary distribution do not depend on the order in which the mutation rate and population size are taken to their limits.     

Defence conversion: the westinghouse experience

This pape briefly reviews defence industry trends and how defence contractors are attempting technology conversion, with specific examples.     

Commodity price inflation, retail pass-through and market power

When commodity prices rise, wholesalers and retailers of products derived from basic commodities respond by passing along at least a portion of the price increase to consumers. In this paper we examine whether firms respond differently to positive commodity price shocks than to negative commodity price shocks; that is, whether commodity price volatility alters market power. We exploit recent volatility in food commodity prices over the period 2007-2010 to investigate how commodity price shocks translate into market power in two different vertically-structured food product industries: potatoes and fluid milk. For potatoes, we find both wholesale and retail market power decreases (increases) during periods of rising (falling) commodity prices. Moreover, price-cost margins widen a substantially greater degree in response to negative shocks than margins narrow in response to positive shocks, indicating that commodity price volatility increases market power. For fluid milk, we find that market power likewise declines during periods of rising commodity prices; however, market power does not significantly change during periods of falling commodity prices, suggesting that commodity price volatility decreases market power.     

The Eurozone Crisis and Emerging‐Market Expansion: Capital Switching and the Uneven Geographies of Spanish Urbanization

The theory of capitalist urbanization posits that the built form serves as a crucial sink through which overaccumulated capital is ‘switched' from industrial production into long‐term investment in urban infrastructure. Since Harvey's (1978) deployment of the theory, researchers have attempted to empirically substantiate the switching thesis with limited success. Christophers (2011) revisited the debate with new data and methods to support the claim that significant investment had switched into the built environment at the onset of the 2007/08 financial crisis. However, Christophers' study overlooks how crises are also geographically displaced. This article analyses Spanish trade data for the years 1993 to 2013, the years prior and subsequent to the housing‐induced economic crisis (1997 to 2006). Two studies are undertaken. The first replicates Christophers' methodology to assess how and to what extent a sectoral switch into property investment occurred in Spain between 1997 and 2006. The second modifies the methodology to investigate the extent to which overaccumulated capital in Spain has been geographically displaced through investment in the Moroccan building industry since 2006. These approaches situate uneven development (geographical switching) and turnover time (sectoral switching) as the twin dynamics through which capitalist urbanization is spatio‐temporally fixed.     

Grades as incentives

This paper examines how grade incentives affect student learning across a variety of courses at two universities, using for identification the discrete rewards offered by the standard A–F letter-grade system. We develop and test five predictions about the provision of study effort and the distribution of numerical course averages in the presence of the thresholds that separate these discrete rewards. Surprisingly, all are rejected in our data. There is no evidence that exam performance is improved for those students that stand to gain the most from additional study.     

Energy balance climate models and general equilibrium optimal mitigation policies

In a general equilibrium model of the world economy, we develop a two-dimensional energy balance climate model featuring heat diffusion and anthropogenic forcing driven by global fossil fuel use across the sphere of the Earth. This introduces an endogenous location dependent temperature function, driving spatial characteristics, in terms of location dependent damages resulting from local temperature anomalies into the standard climate-economy framework. We solve the social planner's problem and characterize the competitive equilibrium for two polar cases differentiated by the degree of market integration. We define optimal taxes on fossil fuel use and how they may implement the planning solution. Our results suggest that if the implementation of international transfers across latitudes is not possible then optimal taxes are in general spatially non-homogeneous and may be lower at poorer latitudes. The degree of spatial differentiation of optimal taxes depends on heat transportation. By employing the properties of the spatial model, we show by numerical simulations how the impact of thermal transport across latitudes on welfare can be studied.