Adaptive economic growth

This paper develops an evolutionary theory of adaptive growth,understood as a product of structural change and economic self-transformation,based upon processes that are closely connected with but notreducible to the growth of knowledge. The dominant connectingtheme is enterprise, the innovative variations it generatesand the multiple connections between investment, innovation,demand and structural transformation in the market process.The paper explores the dependence of macroeconomic productivitygrowth on the diversity of technical progress functions andincome elasticities of demand at the industry level, and theresolution of this diversity into patterns of economic changethrough market processes. It is shown how industry growth ratesare constrained by higher-order processes of emergence thatconvert an ensemble of industry growth rates into an aggregaterate of growth. The growth of productivity, output and employmentare determined mutually and endogenously, and their values dependon the variation in the primary causal influences in the system.     

A general test for time dependence in parameters

A new test for time‐dependent parameters is proposed. The Trig‐test is based on a trigonometric expansion to approximate the unknown functional form of the variation in the parameters concerned. It is shown to have the correct empirical size and excellent power to detect structural breaks and stochastic parameter variation. The appropriate use of the Trig‐test is demonstrated by testing for structural breaks in the US inflation rate. The test detects a statistically significant increase in the US inflation rate beginning in the early 1970s and lasting through to the early 1980s. Copyright © 2004 John Wiley & Sons, Ltd.     

Optimization in electronic markets: examples in combinatorial auctions

Combinatorial auctions provide an important tool for mechanism design in multi-agent systems. When implemented they require to solve combinatorial optimization problems such as set packing and partitioning problems. We present in this paper an analysis of the complexity of the problem to assign bids to bidders in combinatorial auctions. We show that the case of identical assets can be solved in polynomial time. The case of non-identical assets is in its general version NP-hard. Extra structure, like a complete ordering of assets, or mild side conditions make the problem solvable. Finally, we present an algorithm to solve small and medium sized instances in a limited time using standard software.     

Macro‐Fiscal Volatility and the Composition of Public Spending*

Earlier empirical literature has examined some long‐ and medium‐term aspects of macro‐fiscal volatility while leaving its short‐term fiscal impact unexplored. To help fill that gap, we examine the impact of macro‐fiscal volatility on the composition of public spending. To that end, we analyse a panel of 10 EU countries during 1991–2007. Our results suggest that increases in the volatility of regularly‐collected and cyclical revenues such as the VAT and income taxes tend to tilt the expenditure composition in favour of public investment. In contrast, increases in the volatility of ad hoc taxes such as capital taxes tend to favour public consumption spending, albeit only a little. We interpret such volatility innovations as conveying news to the fiscal policymaker about the underlying economic conditions, with especially regularly‐collected and cyclical taxes prompting short‐term cyclical fine‐tuning.     

Refining the search for project success factors: a multivariate, typological approach

Although the causes for project success and failure have been the subject of many studies, no conclusive evidence or common agreement has been achieved so far. One criticism involves the universalistic approach used often in project management studies, according to which all projects are assumed to be similar. A second problem is the issue of subjectiveness, and sometimes weakly defined success measures; yet another concern is the limited number of managerial variables examined by previous research. In the present study we use a project-specific typological approach, a multidimensional criteria for assessing project success, and a multivariate statistical analysis method. According to our typology projects were classified according to their technological uncertainty at project initiation and their system scope which is their location on a hierarchical ladder of systems and subsystems. For each of the 127 projects in our study that were executed in Israel, we recorded 360 managerial variables and 13 success measures. The use of a very detailed data and multivariate methods such as canonical correlation and eigenvector analysis enables us to account for all the interactions between managerial and success variables and to address a handful of perspectives, often left unanalyzed by previous research. Assessing the variants of managerial variables and their impact on project success for various types of projects, serves also a step toward the establishment of a typological theory of projects. Although some success factors are common to all projects, our study identified project-specific lists of factors, indicating for example, that high-uncertainty projects must be managed differently than low-uncertainty projects, and high-scope projects differently than low-scope projects.     

Explanations for Zambia's economic decline

Zambian growth failure is often related to the resource curse. This article evaluates not only this claim, but also whether the new institutional theory can account for Zambia's economic decline. Little empirical support is found for the terms of trade or volatility versions of the resource curse theory, and there is only slightly more support for relative price versions of the theory. Turning to the new institutional theory, the article quantifies the poor quality of institutions in Zambia using a measure for contract intensive money, and supports the hypothesis that ‘poor quality’ institutions, and especially the failure to protect property and contract rights, played an important role in Zambia's economic decline. Examples are given to support this claim.