The refoundation of the symmetric equilibrium in Schumpeterian growth models

We provide a refoundation of the symmetric growth equilibrium characterizing the research sector of vertical R&D-driven growth models. We argue that the usual assumptions made in this class of models leave the agents indifferent as to where targeting research: hence, the problem of the allocation of R&D investment across sectors is indeterminate. By introducing an “?-contamination of confidence” in the expected distribution of R&D investment, we prove that the symmetric structure of R&D investment is the unique rational expectations equilibrium compatible with ambiguity-averse agents adopting a maxmin strategy.     

Einzelbesprechungen

Ohne ZusammenfassungAus dem Italienischen übersetzt von M. St. Braun, WienAus dem Italienischen übersetzt von E. Allina, WienAus dem Russischen übersetzt von A. GerschenkronÜbersetzt von Paul Brüll, Wien.     

How Much do Technological Gap,Firm Size,and Regional Characteristics Matter for the Absorptive Capacity of Italian Enterprises?

The absorptive capacity—the ability of enterprises to efficiently absorb and internalise knowledge from outside sources—represents the link between firms’ capabilities to implement new products and the external stock of technological opportunities, such as those gleamed from Multinational Enterprises (MNEs). This paper explores whether the effect of foreign direct investment (FDI) on the productivity of Italian domestically-owned firms (DOFs) is dependent on their absorptive capacity. In particular, given the peculiar characteristics of the Italian productive system, our analysis focuses on three different dimensions of the absorptive capacity: the size of the technological gap between foreign-owned firms (FOFs) and DOFs, firm size, and the regional distribution of firms. Our findings suggest that technological gap and firm size matter considerably for the spillover effect. Moreover, spillovers exhibit a sub-national dimension present only in the northeastern region of the peninsula.     

Ramsey pricing and competition: The consequences of myopic regulation

This paper addresses the welfare consequences of applying the Ramsey rule when the regulated firm is not a monopolist in all of its markets. The partially regulated optimum and the outcome of myopic regulation, the Short-Sighted Ramsey Equilibrium (SSRE), are examined in a differentiated duopoly model. In the optimum, the markup of competitive substitute goods is relatively high. In the SSRE, the regulator is likely to set the price of competitive substitute goods lower than optimal, and complementary goods higher than optimal. Strategic reactions by a competitor may reverse the result.I thank Kenneth Train, Michael Crew (the editor), seminar participants at the University of California, Berkeley, and an anonymous referee for comments and suggestions. The usual disclaimer applies.     

Prison Labor: The Local Effects of Ohio Prison Industries

Prison labor has both positive and negative effects. Keeping prisoners active, training and socializing them to be productive citizens after prison, and helping to pay for their incarceration are some of the positives. Potential crowding out of free labor and industry is the major potential negative. This paper addresses the quantitative financial and employment consequences on local free labor and industry of prison industries in Ohio using an input–output model for Ohio. Based on the analysis, prison industries employment in Ohio has negligible to positive employment consequences for the Ohio economy and partially offsets the incarceration cost of the inmates who participate – providing between 5 and 10 percent of the incarceration cost in net cash flow and induced tax revenues.Presented at the 59th International Atlantic Economic Conference, London, March 9–13, 2005.     

On the dynamics of inflation persistence around the world

We study the dynamics of inflation persistence in 45 countries for the period 1960–2008 using a recently developed test for multiple changes in persistence, which decomposes the sample information between adjacent I (0) and I (1) periods. We find that: (i) inflation persistence and average inflation tend to fall and rise at the same time; (ii) in some countries there are changes in the level of inflation which do not seem to be related to changes in inflation persistence; (iii) around half of the countries analyzed do not present any burst of I (1) behavior, and hence have stationary inflation throughout; (iv) for the other half, we detect switches of the type I (0) ? I (1) ? I (0), hence, inflation persistence, when it has occurred, has been temporal; and, (v) for about half of the countries in which inflation has presented I (1) behavior, persistent inflation lasted more than a decade. In addition, we find that in the last 50 years there have been mainly two episodes where long bursts of I (1) inflation took place simultaneously among groups of countries. In general, the “Great Inflation” occurred during the seventies and eighties in advanced economies, whereas it occurred during the eighties and nineties in emerging economies, particularly in Latin America.     

谷歌盈利能否持续增长？

业绩有所恢复,但仍不尽如人意,至少对谷歌公司而言是不够的.     

An Agenda for Reforming Economic Theory

In this article, Nobel Prize Laureate Joseph Stiglitz argues that the standard macro-economic paradigm has failed not only to predict the crisis but also to provide insights into the design of a regulatory framework that would make a recurrence less likely. He points out that many of the underlying assumptions of the standard paradigm always seemed implausible and many of its predictions, such as those concerning the micro-economic behavior of the constituents (firms and households), are inconsistent with the empirical evidence. He then identifies a number of key modeling challenges, what he views as key ingredients that have to be incorporated in any model that is going to describe economic fluctuations or be the basis of a well-designed regulatory or monetary framework.     

Gender- and frame-specific audience effects in dictator games

We study dictator allocations using a 2×2$2\times 2$ experimental design that varies the level of anonymity and the choice set, allowing observation of audience effects in both give and take frames. Changes in the distribution of responses across treatment cells allow us to distinguish among alternative motives as elaborated in recent theory. We observe significant audience effects that vary by both frame and gender. The pattern of responses suggests that heterogeneous concerns for reputation and self-signaling across gender give rise to the contextual effects associated with the give and take frames that have previously been observed in the literature.