Ageing and public capital accumulation

We have examined the effects of ageing on the balanced-growth-maximizing public investment policy in an overlapping generations model with growth engines of public capital accumulation. Extended life expectancy tends to increase individual savings, while the increased old-age dependency requires more resources to be allocated to consumption in the economy. Declining working population makes for a severe trade-off between private and public capital accumulation. It is shown that as ageing proceeds, not only the income tax rate must be raised to accelerate public capital formation but the expenditure share of maintenance should be increased in order to maximize the balanced-growth rate.      

Book Reviews

R.J. May and W.J. O'Malley (eds), Observing Change in Asia. Essays in Honour of J.A.C. Mackie, Bathurst: Crawford House Press, 1989, pp. 265. Paper: A$20.00.

Michael R. Dove (ed.), The Real and Imagined Role of Culture in Development: Case Studies from Indonesia, Honolulu: University of Hawaii Press, 1988. US$ 32.00.

Fukuo Ueno, Desa Cimahi: Analysis of a Village on Java during the Japanese Occupation (1943), Rotterdam: Comparative Asian Studies Programme (GASP), Erasmus University, 1988, pp. 291 + xi.

Sritua Arief and Adi Sasono, Modal Asing, Beban Hutang Luar Negeri dan Ekonomi Indonesia, Jakarta: LSP dan UI Press, 1987, pp. 69 + xix.

BRIEFLY NOTED: World Bank, World Debt Tables 1989–90, 2 Vols, Washington Dc, 1989.

Mohan Munasinghe, Energy Analysis and Policy, London: Butterworths, 1990, pp. 315 + xx; Electric Power Economics, London: Butterworths, 1990, pp. 323 + xviii.     

Inefficient but Robust Public Leadership

We investigate endogenous timing in a mixed duopoly in a differentiated product market. We find that private leadership is better than public leadership from a social welfare perspective if the private firm is domestic, regardless of the degree of product differentiation. Nevertheless, the public leadership equilibrium is risk-dominant, and it is thus robust if the degree of product differentiation is high. We also find that regardless of the degree of product differentiation, the public leadership equilibrium is risk-dominant if the private firm is foreign. These results may explain the recent revival of public financial institutions in Japan.     

Effects of international sharing of pollution abatement burdens on income inequality among countries

Improvements in environmental quality will boost output production and hence economic growth. However, although environmental abatement equally benefits all economies in the world, it is shown that, if the private productive resources are not yet accumulated sufficiently in low income economies, income inequality among economies can be widened in the short term not only under equal burden sharing of pollution abatement but even under income-proportional burden sharing. When the marginal productivity is diminishing, the negative effect of the burden is large relative to the positive effect of the improved environment in economies in which resources are not accumulated sufficiently.     

Promotion systems and career development in Thailand: a case study of Siam Cement

This paper examines the promotion systems and career development of managers of Siam Cement Public Company Limited, the largest manufacturing conglomerate in Thailand. Since the 1980s, the company has grown into a full-blown conglomerate and is widely considered to be Thailand's most modernized corporation. In the aftermath of the 1997–8 Asian crisis, the meltdown forced the company and other debt-addicted business groups to streamline their debts and organization structures drastically. However, just five years later, the company had bounced back into profitability and first-class corporate governance, and stands firmly in the front rank. Undoubtedly, the company's successful recovery and its current strengths have been driven by the capability and dedication of its managers. This paper focuses on interviews with the company's personnel managers during 1999–2001, and on the personnel profiles of 128 managers (general manager level), in order to examine Siam Cement's human resource management policies and practices, and to draw from this its overall strategies for the development of managerial careers. The main finding was that well-planned recruitment, competitive promotion, concrete performance appraisal and wide-ranging training and development programmes, including job rotation and sending managers to study abroad, are all essential career development strategies.     

Public Monopoly,Mixed Oligopoly and Productive Efficiency

In general, the introduction of competition into the public sector seems to lead to higher cost‐efficiency in service production. However, there are examples of substantial cost increases in some areas. In this paper, using a mixed oligopoly model, we investigate the effects of deregulation on the cost‐reducing incentives of a public firm. Our results show that a firm that is a public monopoly has greater incentive to conduct cost‐reducing investment than a public firm within mixed oligopoly market.     

The long-run consequences of minimum wage regulation in a monetary economy

This paper investigates the long-run implications of minimum wage regulation on the growth process with monetary repercussions. The paper shows, among other results, that if the minimum wage floor (MWF) is sufficiently low, then the qualitative behavior of the dynamic path is similar to the case of full employment in which the steady state is a saddle point, and that if the MWF is sufficiently high, the economy decays all the way toward the origin.     

Coalitional bargaining games with random proposers: Theory and application

We consider a non-cooperative coalitional bargaining game with random proposers in a general situation for which players differ in recognition probability and time preference. We characterize an efficient equilibrium as the generalized Nash bargaining solution that belongs to the core. The model is applied to wage bargaining between an employer and multiple workers. Although involuntary unemployment may occur in equilibrium, full employment emerges as players become sufficiently patient.