INDUSTRY‐LEVEL PRODUCTIVITY MEASUREMENT AND THE 2008 SYSTEM OF NATIONAL ACCOUNTS

The 2008 System of National Accounts recognizes capital services as the conceptually correct way to measure the input of capital into production. This allows setting up an integrated system of industry‐level and aggregate productivity accounts that are consistent with the 2008 SNA. The paper discusses the new aspects in the 2008 SNA and sets out such an integrated system, based on Jorgenson's aggregate production possibility frontier and gross output‐based industry productivity measures. Recent results for industry productivity measures for the United States complete the picture.     

Investing in Bankrupt Firms

We examine the investment characteristics of firms electing to enter bankruptcy, between 1973 and 1982. Comparisons are made before and after the Bankruptcy Reform Act of 1978. Our results indicate that the 1978 Act had no significant impact on bankruptcy decisions or resolutions for actively traded firms. Trading in bankrupt firms' securities is becoming more common, but no abnormal returns appear to be available. Systematic risk does not change significantly with the filing of bankruptcy, but there is a significant increase in return variance. The financial markets also react to various announcements of stages in the reorganization process.     

CHALLENGES FOR FRANCE IN THE EMERGING INTERNATIONAL ENVIRONMENT: A DYNAMIC ANALYSIS

France faces substantial challenges as the economic integration of Europe and the international economy continues. This article uses a dynamic aggregate translog cost function with inputs of capital, labor, and imports to examine the likely impact of closer world economic ties on France. This technique allows one to estimate short- as well as long-run direct price elasticities of demand for the inputs and cross-price elasticities for each respective input pair. The findings of the article include that (1) the French economy is becoming more sensitive to changes in import prices and (2) all the inputs are substitutes for one another. These results suggest that continuing international economic integration will present substantial challenges to the French economy. The short-run estimates of direct and cross-price elasticities are consistent with the Le Châtelier principle, except for the cross-price elasticities between capital and labor. Some possible reasons for the latter result are discussed in the article. (JEL F14, O10, O12)     

Job Attributes and Federal Wage Differentials

As part of the debate on how to treat attributes of a job (as opposed to a worker) when measuring federal differentials, the focus has been on the proper treatment of employer size. Using employer size, we highlight the two extremes in the literature of either holding job attributes constant or of assuming attributes do not transfer between sectors. A third alternative-estimating the extent to which the attribute will transfer-is much closer in value to that generated by holding employer size constant.     

DESIGNING POLLUTION MARKET INSTRUMENTS: CASES OF UNCERTAINTY

This paper examines design alternatives for emissions trading credits and assesses their relative performance given several sources of uncertainty endemic to market-based environmental regulatory programs. Facilities regulated in such programs face significant uncertainty about their total emissions. Uncertainty arises due to changes in production-demand schedules for their product, imperfect knowledge of abatement efficiency, and other informational lags. Depending on the design of the trading credit, this uncertainty can result in significant market price volatility and undesirable increases in peak emissions (in the absence of additional costly market institutions, such as contingent contracts and brokered insurance). In addition to the design alternatives, the paper considers allocation alternatives to alleviate these unintended effects and also discusses the value of properly designed reconciliation markets .     

A Capital Budgeting, Mixed Integer, Temporal Programming Model

A temporal model utilizing mixed integer programming was constructed to evaluate investment alternatives in combination with the present value method of capital budgeting. As such it is a first step beyond conventional linear and integer programming in developing relevant capital decision-making models. The procedure permits the consideration of investment in discontinuous (lumpy) inputs which also are interdependent —thus overcomes some of the principle weaknesses of other capital budgeting procedures. The model was tested with a relatively simple five-year model including land and machinery investment alternatives for a cash grain farm and proved capable of handling both the discontinuities and interrelationships. The possibilities of extending the model to include a greater range of alternatives and more complicated interrelationships such as reinvestment of intermediate cash throwoffs also was explored .     

PROCESSED FOODS IN PERSPECTIVE: I.

This paper briefly discusses the history of preservation and processing and the author considers the need for preservation. The uses and properties of additives are described and the legal and economic considerations are discussed.     

The Nutritional Impact of the Dairy Price Support Program

This paper examines the impact of the dairy price support program and its resultant higher prices on nutritional intake, especially calcium. This assessment is particularly important because calcium is one of the two nutrients whose average intake is below the Recommended Dietary Allowance. A demand system with emphasis on dairy products is estimated, and in conjunction with data on the nutritional content of various foods, impacts on nutritional intake are measured.     

Lineages of Embeddedness: On the Antecedents and Successors of a Polanyian Concept

Since the 1980s, much debate has revolved around Karl Polanyi's concept of the “dis/embedded economy,” generating some light and not a little heat. This paper looks at three reasons that account for part of the “heat.” It begins by tracing the sources upon which Polanyi drew. They include Karl Marx, Ferdinand Tönnies, and Max Weber, along with anthropology of the inter‐war period, and German and American Institutionalist economics. After exploring the differing ways in which these varying currents conceptualize the relationship between economy and society, I explore the different interpretations of what Polanyi means by embeddedness, and the different purposes to which contemporary economic sociologists have put the term. For some, he is held up as the originator of a line of sociological analysis that treats “the economy” as a subsystem “embedded in” a social system. In this reading the emphasis is upon the moral underpinnings of market behavior, in contrast to the naturalism of Ricardo, Malthus and their heirs. For others, his “disembedding” thesis contains a more radical tale: of the market economy coming to dominate “society,” bringing forth a sorcerer's apprentice world of untrammeled market forces that, although human creations, lie beyond conscious human control.