TASTE FOR VARIETY AND OPTIMUM PRODUCT DIVERSITY IN AN OPEN ECONOMY

We extend the Benassy 'taste for variety' model to an open economy setting. With the Benassy effect, the market equilibrium is inefficient, openness reduces the varieties provided in the unconstrained optimum and there are potential gains from international coordination.     

A production function analysis of English maternity hospitals.

In recent years, a number of attempts have been made to explain the output of hospitals by means of production function analysis and, in this particular study, the authors estimate Cobb-Douglas and log-quadratic functions from data for the 193 English maternity hospitals. Of the various inputs into maternity care, the numbers of beds and nurses appear as the most significant determinants of throughput, although the relative quantities actually employed differ from the “technical” optimum. Returns to scale in the maternity service appear to be, at best, constant. The effects of hospital location and type are also analysed and they suggest the existence of significant disparities in levels of efficiency between different hospitals.     

The mixing ratio in the Indonesian dairy industry

The Indonesian dairy industry has been viewed by the Indonesian government as an industry that has the potential to improve the welfare of low income and landless farmers through providing them with an additional source of farm income. As well, the government sees the industry as a vehicle for providing opportunities for employment in rural areas. From an economy wide viewpoint, its development is viewed as a way Indonesia might save foreign exchange since a large share of its dairy requirements have to be imported. A variety of measures have been used to assist the industry. This paper investigates one of the measures, the BUSEP scheme or mixing ratio regulation which requires domestic processors to use Indonesian produced milk before imported milk.     

Conditions for Optimality of a Currency Area

Two approaches to the theory of OCA are distinguished in this paper. The first, called the marginalistic approach, attempts to define the OCA from the point of view of a single country, and the second examines the optimality of a currency area of a given membership. The marginalistic approach and its limitations are discussed first. Then, the paper proceeds to the second approach which is discussed in the context of the cooperative game theory in characteristic function form; it argues that a currency area is optimal when the welfare functions of its constituent members are in the core. This implies that the welfare functions of all constituent members of the currency area are maximized and hence they are all better off with a common currency rather than with their own national currencies; hence, no member country has the intention to abandon the currency area. The paper concludes that the condition for the optimality of a currency area independently of the degree of economic similarity of its constituents requires that the characteristic function must exhibit non decreasing returns with respect to its size.     

Bubbles, crises, and policy

In many recent cases financial liberalization has led to a bubblein asset prices. The bursting of the bubble results in a bankingcrisis and recession. It is suggested such bubbles are causedby an interaction of the risk-shifting problem arising fromagency relationships in intermediaries and uncertainty concerningthe expansion of credit. Two important policy objectives areidentified. The first is the prevention of bubbles in assetprices. The second is minimizing the impact of spillovers onto the real economy during post-bubble banking crises. The differentpolicy approaches taken in Norway and Japan are compared.     

Change, consolidation, and competition in health care markets.

The health care industry is being transformed. Large firms are merging and acquiring other firms. Alliances and contractual relations between players in this market are shifting rapidly. Within the next few years, many markets are predicted to be dominated by a few large firms. Antitrust enforcement authorities like the Department of Justice and the Federal Trade Commission, as well as courts and legislators at both the federal and state levels, are struggling with the implications of these changes for the nature and consequences of competition in health care markets. In this paper we summarize the nature of the changes in the structure of the health care industry. We focus on the markets for health insurance, hospital services, and physician services. We then discuss the potential implications of the restructuring of the health care industry for competition, efficiency, and public policy. As will become apparent, this area offers a number of intriguing questions for inquisitive researchers.     

Efficiency Considerations in the Additive Hazards Model with Current Status Data

For current status data, L IN , O AKES and Y ing (1998) proposed a procedure for estimation of the regression parameters in the additive hazards model that makes clever use of martingale theory. However, one of the outstanding problems posed in the paper was the issue of efficient estimation, as their estimators do not attain the semiparametric information bound. In this paper, we explore this issue and provide a characterization of the NPMLE. We conduct efficiency comparisons between the NPMLE and the procedure of L IN et al . (1998) analytically and numerically through analysis of a dataset from a tumorigenicity experiment.