Payback without apology

When interest rates are uncertain, the net‐present‐value threshold required to justify an irreversible investment is increasing in the length of a project's payback period. Therefore, slow‐payback projects should face a higher hurdle than fast‐payback projects, just as investment folklore suggests. This result suggests that the widely disparaged use of payback for capital budgeting purposes can be an intuitive response to correctly perceived costs and benefits.     

Building Trade Barriers and Knocking Them Down

This paper examines the dynamic behavior of trade protection and liberalization. Consistent with evidence on the development of trade policies, policy decisions are modeled as the outcome of a political contest between import-competing interests and exporters. Uncertainty about the success of political contests yields a dynamic equilibrium in which tariffs gradually increase over time. Eventually, increasing tariffs reduce profits in the exporting sector to such a degree that exporters enter the political arena and lobby actively against protection. Depending on the market characteristics, a political contest may generate a liberalization or a move toward autarky.     

What reading will do for the executive

During the sixties, fads characterized many executive development programs. Fancy equipment such as video tape systems and computer simulations were in vogue. Since then, reading, once considered unglamorous, has again become popular. Firms that evaluated the benefits of their overall educational efforts found reading an economical and effective way for the individual executive to learn and develop. An organization can choose reading programs from several that have been used effectively, or an executive can design his own program to fit his needs. This type is the most common and most flexible. The authors suggest various sources for an executive to refer to when planning his own reading, and they emphasize the importance of selectivity.     

Hard‐branding the cultural city – from Prado to Prada

The industrial ‘Event City’, host to World Fair, sporting, cultural and ceremonial mega‐event, has been transformed in its late‐capitalist form into the ‘City as Event’– from the all year round festival city to the ubiquitous ‘Cities of Culture’. These self‐styled culture cities now look to the contemporary art museum and cultural district to provide a cosmopolitan edge to their promotional icons and associations, with Art now acknowledged as an ‘industry’. Cities worldwide, irrespective of their indigenous culture and heritage (e.g. Guggenheim Bilbao, Rio et al.), are thus emulating the brand reinforcement witnessed in leisure and entertainment products and themed experiences, which themselves have entered the retail environment as prime urban consumption spaces. The paper critiques this evolution of the city of culture and the branded art facility in terms of their form and function, arguing that form has followed regional funding, and that culture‐led regeneration and place‐making now mirrors the product branding of Nike and Sony, vying with them for consumer and political attention through the use of star architecture and retail strategies that belie their public good/realm and cultural distinctions. The cost of these flagships and cultural strategies, the paper concludes, is borne in terms of cultural diversity and production versus consumption and mediation; in community cultural activity and amenity; and by those who do not have a stake in the gentrification process which attaches to these globalized grands projets La ‘Ville de l'industrie de l'événement’ (accueillant Exposition universelle ou méga‐événement sportif, culturel ou commémoratif) est devenue sous sa dernière forme capitaliste la ‘Ville‐Evénement’– de la ville festivalière toute l'année, aux ‘Villes culturelles’ ubiquistes. Ces prétendues villes de culture comptent désormais sur le musée d'art contemporain et le quartier culturel pour fournir un atout cosmopolite à leurs associations et icônes promotionnelles, l'Art étant maintenant reconnu comme une ‘industrie’. A travers le monde, quels que soient leurs culture et héritage locaux (ex.: Guggenheim Bilbao, Rio et autres), des villes sont donc en train d'imiter la consolidation de marque appliquée aux produits de loisirs et réalisations thématiques, lesquels ont pénétré la sphère du commerce de détail comme principal espace de consommation urbain. L'article critique cette évolution de la ville culturelle et du lieu artistique ‘étiqueté’, dans la forme et la fonction, affirmant que la forme a suivi le financement régional, et que la régénération ou la fabrication de lieux par la culture reflète la stratégie de marque des produits Nike et Sony; en effet, ils rivalisent avec eux pour attirer consommateurs et politiques, en utilisant une architecture vedette et des stratégies de distribution qui désavouent leurs distinctions culturelles et leur domaine ou bien public. Pour conclure, ces produits vedettes et stratégies culturelles ont un coût en termes de diversié et production culturelles (opposées à consommation et intervention), en charme et activité culturelle de la communauté, coût payé par ceux qui n'ont pas part au processus d'embourgeoisement associéà ces ‘grands projets’ internationaux.     

Implications of Seasonal Climate Forecasts on World Wheat Trade: A Stochastic, Dynamic Analysis

Improvements in seasonal climate forecasts have potential economic implications for international agriculture. A stochastic, dynamic simulation model of the international wheat economy is developed to estimate the potential effects of seasonal climate forecasts for various countries' wheat production, exports and world trade. Previous studies have generally ignored the stochastic and dynamic aspects of the effects associated with the use of climate forecasts. This study shows the importance of these aspects. In particular with free trade, the use of seasonal forecasts results in increased producer surplus across all exporting countries. In fact, producers appear to capture a large share of the economic surplus created by using the forecasts. Further, the stochastic dimensions suggest that while the expected long‐run benefits of seasonal forecasts are positive, considerable year‐to‐year variation in the distribution of benefits between producers and consumers should be expected. The possibility exists for an economic measure to increase or decrease over a 20‐year horizon, depending on the particular sequence of years. Le progrès des prévisions saisonnières du climat a une portée économique pour l'agriculture internationale. Un modèle stochastique et dynamique de l'économie internationale du blé est développé afin d'estimer les effets potentiels des prévisions saisonnières du climat sur la production de blé de divers pays, leurs exportations et le commerce mondial. Les études précédentes ont généralement ignoré les aspects stochastiques et dynamiques des effets liés à l'utilisation des prévisions climatiques. Cette étude montre l'importance de ces aspects. En particulier avec le libre échange l'utilisation de ces prévisions aboutit à l'augmentation des excédents dans tous les pays exportateurs. En fait, il apparaît que les producteurs accaparent une grande part de l'excédent économique créé par l'utilisation de ces prévisions. De plus, les dimensions stochastiques suggèrent que bien que les bénéfices à long terme des prévisions climatiques puissent être substantiels, on s'attend à des variations considérables d'une année à l'autre dans la distribution des bénéfices entre les producteurs et les consommateurs. Il est possible qu'un indicateur économique varie à la baisse sur 20 ans eus fonction de la séquence de variation climatique.