Life expectancy and education: evidence from the cardiovascular revolution

This paper exploits the unexpected decline in the death rate from cardiovascular diseases since the 1970s as a large positive health shock that affected predominantly old-age mortality; i.e. the fourth stage of the epidemiological transition. Using a difference-in-differences estimation strategy, we find that US states with higher mortality rates from cardiovascular disease prior to the 1970s experienced greater increases in adult life expectancy and higher education enrollment. Our estimates suggest that a one-standard deviation higher treatment intensity is associated with an increase in adult life expectancy of 0.37 years and 0.07–0.15 more years of higher education.     

The distribution of Seigniorage in The Netherlands

Summary This paper investigates the revenue from money and its distribution between the government and the central bank. An accounting framework is developed taking explicit account of stock and flow aspects of monetary revenue. Application of this framework to data for The Netherlands shows that although the overall revenue from money in the period 1949–1989 was sizeable, the central government did not really benefit from its monetary monopoly.Helpful comments by M.M.G. Fase and two anonymous referees are gratefully acknowledged.     

On the design of invoicing practices in international trade

We advance an explanation for the choice of the invoice currency of international trade contracts on the basis of strategic bargaining considerations. The choice of the invoice currency originates in a situation in which each trader takes into account the other party's bargaining power. The latter depends on the individual discount factor, whether one is the first or second proposer, and whether one is on the short or long side of the market. Along these lines we explain the Grassman bias for trade contracts to be invoiced in the exporter's currency.     

Limit orders,asymmetric information,and the formation of asset prices with a computerized specialist

We analyze the existence of equilibrium in an asset market under asymmetric information. Price formation is modeled as a bilateral sealed bid auction where uninformed and informed traders submit limit orders to a computerized specialist. The computerized specialist is programmed to sell to the highest bidder and buy from the seller asking the lowest price. We show that this mechanism — which is designed to model the Globex and RAES trading institutions used in Chicago, London, New York, Paris, and Germany — yields an equilibrium in which the bid-ask spread is endogenously random and the passive specialist earns nonnegative profits.     

AN INVESTIGATION INTO THE EFFECT OF FULL‐SCALE SUPPLY CHAIN MANAGEMENT SOFTWARE ADOPTIONS ON INVENTORY BALANCES AND TURNS

Supply chain management (SCM) software vendors, analysts, and others claim that firms implementing SCM software stand to benefit by being able to reduce inventory holdings and increase inventory turns. We theorize that full‐scale implementations lead to system‐wide inventory optimization, which in turn leads to cost improvement associated with inventory balances and turns. To examine the question, we develop an analytical model of inventory optimization, then analyze the effects of the model with a numerical experiment, and finally confirm the results with an empirical examination. We find that firm‐wide implementation is significant in explaining improvement in inventory metrics, relative to pre‐implementation metrics for our sample. Our empirical tests indicate that implementing SCM software across only a portion of the firm does not impact inventory metrics, but that the scale of implementation does. More precisely, we find that firms implementing SCM software across the entire company significantly improve both inventory turns and inventory as a percent of revenue relative to partially‐implementing firms and non‐implementers.     

Innovation processes in small and medium-size companies

Innovation in small manufacturing companies often proceeds in an unstructured way. For the most part there is no previous well-defined plan. Small companies manage to introduce product and process innovations in a great variety of ways. The activities involved in the innovation process vary from one company to another, as does the total duration of the process.

With product innovations, the market to which the companies orient largely determines how the innovation evolves. With process innovations, it is the novelty of the innovation that determines the mode of evolution.

Next to the know-how invested in the company, sources of information in the business sector are particularly intensively used, such as customers and suppliers. The use of other sources depends strongly on the stage in the innovation process.

These are the most important conclusions from an investigation that has been carried out under commission from the Dutch government. Its objective was to establish how innovation is accomplished in small companies and which sources of information are used at the successive stages of the innovation process.