Some reflections on past and future of nonlinear dynamics in economics and finance

This paper offers an overview of the literature on the economic and financial applications of theory of nonlinear dynamics, especially bifurcation theory. After a short introductory discussion of the first nonlinear dynamic models in social sciences and the economic relevance of the zoo of bifurcations and complicated dynamics that such models can generate, we present an overview of the literature on nonlinear dynamic models in the areas of underdevelopment, environmental poverty traps, the management of common goods, industrial organization and financial markets. The review of the literature is enriched by reflections and ideas for future research.     

The role of local embeddedness and non-local knowledge in entrepreneurial activity

The article investigates whether the history of individuals’ spatial relocation has an impact on their propensity to perform an entrepreneurial entry and post-entry performance of firms they start. By looking at entrepreneurs in the IT services sector in Swedish non-core regions between 1991 and 2010, the article investigates the interaction between individuals’ embeddedness in local networks and their exposure to external knowledge accumulation opportunities across different geographical settings, as well as its impact on their entrepreneurial activities. The results of the analysis suggest that individuals with broad spatial relocation histories are more likely to start IT firms in non-core regions, which, in turn, may be expected to survive longer. It is, therefore, claimed that non-local knowledge accumulated through spatial relocation is an important complement to embeddedness in local networks in non-core regions. This complementarity is further related to the evolution of the IT services sector over time.     

RESPONSES OF ECONOMIC SYSTEMS TO ENVIRONMENTAL CHANGE: PAST EXPERIENCES

Current discussions of climate change are overly focused on the science underpinning environmental impact, with little attention to socioeconomic consequences. The economics of environmental change in particular is insufficiently informed by the lessons that past experiences can yield. Drawing on case studies from Europe and Asia, this special issue underlines the importance of historical context, as well as markets, institutions, technology, and the role of international trade in understanding how economic systems have responded to environmental changes. Past economies have responded dynamically to environmental change rather than simply constrained deterministically by the climatic and ecological events that have engulfed them.     

Shaanxi Impressions

Ancient, but longing to be modern
In most people＇s eyes, Xi＇an, the capital of Shaanxi, a province in western China, is an alias for ＂Ancient China＂, which is also what Patricia from Arizona, U.S., who was sitting next to me on my Xi＇an flight thought as well. ＂My husband and I managed to spend one precious day there in our busy China trip schedule, just to have a look at the great Terra Cotta Warriors,＂ Patricia＇s eyes were glimmering as we set off flying towards history. The Terra Cotta Warriors are the masterpiece of the First Qin Emperor, whose dynasty dates back to BC 221 - BC 207. Actually, I would prefer to refer to the city as ＂Chang＇an＂, which used to be the city＇s name in the Tang dynasty （AD 618 - 907） when it served as China＇s capital during the most prosperous period in ancient Chinese history.     

Measuring the Extent of Structural Remedy in Section 7 Settlements: Was the US DOJ Successful in the 1990s?

This paper suggests an innovative measure of structural relief obtained in a typical Section 7 settlement. The fraction of competitive overlap subject to divestiture as a condition of the settlement is modeled as a function of merger-specific efficiencies, the proportion of the deal held “hostage” to antitrust review, the merger’s anticompetitive potential, and other factors. The model is applied to data on 86 recent Justice Department cases covering the period 1990–2003 and to the subsample of 1990s cases. All data are collected from publicly available documents only. The government is found to secure larger divestitures when the cost to the acquirer of delaying the settlement is high. The resulting estimates are used to predict several out-of-sample observations. I would like to thank the General Editor and two anonymous referees for many helpful suggestions on earlier drafts of this paper. The remaining errors are mine.     

Too Much Competition in Higher Education? Some Conceptual Remarks on the Excessive‐Signaling Hypothesis

Within the economics of higher education, there is a small but influential literature that describes and analyzes the outcomes of competitive processes on markets for higher educational services. Colleges and universities in the United States currently invest a vast amount of resources in order to attract well-qualified students. Costly activities like advertising, infrastructure investments, the recruitment of academic stars, or the granting of merit-based tuition discounts can be interpreted as different forms of "market signaling" in the sense of Spence. According to some social science authors, these signaling activities have reached a dimension that has to be classified as excessive or socially wasteful from a welfare-economic viewpoint. The present article makes some conceptual remarks on this excessive-signaling hypothesis, and intends to contribute to the debate about the (potentially) harmful and beneficial effects of competition in higher education.     

Stereotypes, Asian Americans, and Wages: An Empirical Strategy Applied to Computer Use at Work

This article examines the effect on wages of the Asian-American stereotype as mathematically and technically adept, and the role this stereotype may play in explaining racial wage differences. We propose an empirical strategy to examine the influence of stereotypes on labor market outcomes, with a specific application to the wage premium associated with computer use at work. Using Current Population Survey data, ordinary least squares estimates do not provide compelling evidence that a positive stereotype affects wages for Asian Americans.     

An Illuminating Exchange The Construction of Social Reality

A BSTRACT . In his The Construction of Social Reality , Searle presents an account of rights, responsibilities, obligations, duties, and similar entities in terms of the formula X counts as Y in context C , where " X " refers in the simplest case to some physical object or event and " Y " to the result of imposing upon X some deontic power or function. Smith attempts to show the limitations of this formula, focusing especially on the examples of contested property rights (where C is not uniquely defined), and of money in bank accounts and other phenomena (where no physical X -term is available). Searle responds to these criticisms, above all by pointing to the fact that some of the problems Smith raises are to be addressed not by an ontological analysis of social reality but rather through legal or political means.