Technical Progress and the North–South Terms of Trade

In a classical world where prices of both northern manufactures and southern raw materials are determined by market demand and supply, technical progress in one region leads to a terms-of-trade improvement of the other region irrespective of whether technical progress is labor-saving or raw-material saving. But in a neo-Kaleckian framework characterized by surplus capacity, and an effective demand problem in the North and a capacity constraint in the South, the terms of trade would turn against the South even if the North experienced a higher rate of technical progress than that of the South.     

Analysis of binary data with the possibility of wrong ascertainment

Most genetic studies recruit high‐risk families, and the discoveries are based on non‐random selected groups. We must consider the consequences of this ascertainment process to apply the results of genetic research to the general population. In addition, in epidemiological studies, binary responses are often misclassified. We proposed a binary logistic regression model that provides a novel and flexible way to correct for misclassification in binary responses, taking into account the ascertainment issues. A hierarchical Bayesian analysis using Markov chain Monte Carlo method has been carried out to investigate the effect of covariates on disease status. The focus of this paper is to study the effect of classification errors and non‐random ascertainment on the estimates of the model parameters. An extensive simulation study indicated that the proposed model results in substantial improvement of the estimates. Two data sets have been revisited to illustrate the methodology.     

Bargaining and Sharing Innovative Knowledge

We consider the problem of bargaining over the disclosure of interimresearch knowledge between two participants in an R&D race for an ultimate,patentable invention. Licence fee schedules that are functions of the'amount of knowledge disclosed', by the leading to the laggingagent, are examined for their abilities to attain efficient outcomes andvarying shares of the surplus arising from disclosure. In hersequential-offers bargaining games, the uninformed buyer is able to elicitfull disclosures without sharing the incremental surplus with any type ofthe licensor, and thus do as well as a perfectly informed and discriminatingknowledge licensee.     

A Stackelberg Oligopoly with Nonidentical Firms

This paper extends the Stackelberg model to include any number of nonidentical firms and demonstrates significant counterintuitive results. For example, entry of an additional firm may increase the quantities and/or profits of some existing firms; it may also increase the total industry profit.     

A reexamination of corporate sell-offs of real estate assets

This article reexamines the now generally accepted notion that sell-offs of real estate assets provide positive returns for sellers but not for buyers. Following previous research, we use event study methods, but we modify the conventional market model to permit its residuals (unexpected returns) to be described by a time-varying conditional variance. We also differ from previous work in that our sample contains only sell-offs that can be precisely dated. Although we find substantial evidence of time-varying volatility in the unexpected return series, our economic results confirm the conventional viewpoint.     

Attracting private investment: Tax reduction,investment subsidy,or both?

This paper uses a real-option model to examine the net benefit to a government from using tax cut and/or investment subsidy as incentives to induce immediate investment. Although earlier papers generally concluded that investment subsidy dominates tax cut, it is observed that many governments use a combination of subsidy and tax cut. We show that, when the government uses a different discount rate from private firms, and when it has to borrow money to provide an investment subsidy, it is possible to get an internal optimum; that is, it might be optimal for the government to provide an investment subsidy as well as charge a positive tax rate on the profits from the project. Thus, we provide an explanation for the puzzling fact that many governments provide an investment subsidy to a firm while simultaneously taxing its profits.     

Dealer financial conditions and lender-of-last-resort facilities

We examine the financial conditions of dealers that participated in two of the Federal Reserve's lender-of-last-resort (LOLR) facilities—the Term Securities Lending Facility (TSLF) and the Primary Dealer Credit Facility (PDCF)—that provided liquidity against a range of assets during 2008–2009. Dealers with lower equity returns and greater leverage prior to borrowing from the facilities were more likely to participate in the programs, borrow more, and, in the case of the TSLF, at higher bidding rates. Dealers with less liquid collateral on their balance sheets before the facilities were introduced also tended to borrow more. The results suggest that both financial performance and balance sheet liquidity play a role in LOLR utilization.     

Liquidity risk, credit risk, and the federal reserve’s responses to the crisis

In responding to the severity and broad scope of the crisis, the Federal Reserve (the Fed) has aggressively utilized both traditional monetary policy instruments, as well as innovative tools to provide liquidity. In this paper, the Fed’s actions are examined in light of the evolution of risk during the crisis. The empirical evidence supports the Fed’s views on the primacy of liquidity constraints in the earlier stages of the crisis and the increased prominence of counterparty credit risk as the crisis evolved in 2008. I conclude that an understanding of the prevailing risk environment is necessary to evaluate when central bank programs are likely to be effective and under what conditions the programs might cease to be necessary.     

REDISTRIBUTION AND FREE TRADE IN AGRICULTURE: ARE THEY COMPLEMENTARY?

The purpose of the paper is to look at the welfare effects of trade in agricultural goods in a less developed country where the agricultural market is controlled by a handful of large farmers. It is shown that the success of trade reform depends on the distribution of output between large and small farmers and the success of land reform leading to redistribution from the large to the small farmers depends on trade reform. In other words, if undertaken in isolation, each reform might lead to a fall in welfare, but if jointly undertaken, they will lead to an increase in welfare. Thus the two reforms are complementary.