Adjustment costs and dynamic factor demands for U.S. cigarette manufacturing

Following the approach of Berndt, Fuss, and Waverman, a dynamic model for U.S. cigarette manufacturing is developed and factor demands estimated. Tobacco and capital stocks are treated as quasi-tixed inputs. The results indicate that there are significant adjustment costs associated with adjusting tobacco stocks, but not with adjusting the capital stock. Short-run, intermediate-run, and long-run output constant elasticities are estimated for inputs in cigarette production. Demand for U.S. tobacco by U.S. cigarette manufacturers is found be more inelastic than shown by previous studies using static models. Cigarettes produced for export appear to differ in their marginal cost of production from cigarettes produced for the sale in the U.S. market.     

What Is in a Municipal Bond Rating?

Studies on the determinants of municipal bond ratings contain two conspicuous patterns: the use of financial accounting variables and the application of discriminant analysis to them. Over 70 different financial accounting variables have been specified, leading to different findings across the studies. In addition, discriminant analysis has been applied in these studies without correcting for violations of its underlying assumptions. Akaike's information criterion and Lachenbruch's U method are used to show how a probit model specified with economic base diversification, economic expansion, and fiscal management variables may be an improvement over the application of discriminant analysis to financial accounting variables in the determination of a triple A bond rating.     

POTENTIAL GAINS FROM THE ENCLOSURE OF COMMON LAND: A REPLY

This reply outlines the experience underlying the assumptions in the previous note by Baxter and Bottomley, referring particularly to conditions in Tripolitania. There is no dispute that increases in gross rural product can be expected from the enclosure of common land. It is argued in this reply that this will be accomplished by a migration of labour and capital to the hitherto commonly held land, while Baack's model leads him to suppose the opposite. Baack's theory is used to show that the authors of the original note would still be right if dynamics were introduced into the analysis. It is agreed that Baack's analysis can be used to make the assumptions upon which the origibal note was based more precise as well as to add an additional source of gain not previously considered.     

Can Voluntary Workplace Partnership Deliver Sustainable Mutual Gains?

This article draws on two Irish case studies to examine the nature and outcomes of voluntary workplace partnership (WP), and the conditions affecting its durability. We found that WP delivered mutual gains for all stakeholders at Aughinish Alumina (AAL), which were quite equally divided. While WP delivered most gains for management at Waterford Crystal (WC), and some for the union, worker gains were less. The WC partnership broke down after 10 years, but the AAL partnership continues. Voluntarist mutual gains partnership is feasible, but success and durability depends on specific clusters of contextual conditions, notably management support, a quality‐focused competitive strategy, insulation from market pressures, union postures, vertically aligned bundles of mutual gains practices, institutional supports, emphasis on fairness, all party commitment to performance enhancement and capital‐intensive technology. Conditions supporting WP were stronger at AAL than WC. More generally, as supports for WP in Ireland are weaker than retardants, we conclude that few mutual gains partnerships will take root, and even fewer will endure.     

The Ethics and Mechanics of Social Democracy or Having it Both Ways

Why is the West in‘becalmed stagnaion’— unable to overcome the obstacles to economic liberalisation? Has the social democratic dream turned sour? The electoral success of social democratic policies can be explained in its offer to let taxpayers have their cake and eat it, argues Anthony de Jasay, a former Oxford don and author of The State. He examines the potential domage to individual thrift, ambition and responsibility that such mistaken doctrines can induce.