Taxation and the Taylor principle

A nominal tax system is added to a sticky-price monetary business cycle model. When nominal interest income is taxed, the coefficient on inflation in a Taylor-type monetary policy rule must be significantly larger than one in order for the model economy to have a determinate rational-expectations equilibrium. When effective tax rates are raised by inflation, the stability of the economy's equilibrium can be adversely affected. Finally, when depreciation is treated as a charge against taxable income, an even larger weight on inflation is required in the Taylor rule in order to obtain a determinate and stable equilibrium.     

Current consumption and future income growth: Synthetic panel evidence

Using group means computed from 20 years of high quality survey data, I show a strong and robust relation between households’ consumption growth and subsequent realizations of their income growth, including realizations as distant as six years later. The relation appears in multiple types of variation in income growth: in variation across cohort-education groups, in variation over the life cycle, and in variation over the business cycle. While other explanations are explored, the results are likely due to forward-looking households altering their current consumption in response to information they receive about their income years into the future, information that turns out to be accurate.     

Disruptive technologies, stakeholders and the innovation value-added chain: a framework for evaluating radical technology development

Contemporary frameworks for evaluating technological innovations contend that innovative success is dependent upon the ability of firms to acquire and assimilate new knowledge without disrupting value chain members such as suppliers, customers and complementary innovators. These frameworks, however, provide little advice on how to deal with radical, controversial innovations that may also introduce new undesirable environmental, health, and social side affects. In addition to technological, commercial and organisational uncertainties, the developers of such technology typically must resolve social uncertainties, a particularly difficult activity because of the added complexities and often conflicting and/or difficult-to-reconcile concerns from secondary stakeholders. Attempts must be made to address the potential unintended and unforeseen consequences of the technology, as well as its potential benefits, if it is to be successfully applied. Using Monsanto's development of agricultural biotechnology as an illustration, we suggest an evaluation framework that incorporates stakeholder theory, innovation management concepts and Popper's evolutionary learning methodology of science and its extension to social issues.     

Empirical evidence from the Greater Toronto Area on the acceptability and impacts of HOT lanes

This paper describes a study on willingness to pay (WTP) and public acceptability for High-Occupancy/Toll (HOT) lanes using empirical evidence from Toronto, Ontario, Canada. From a stated preference survey of more than 250 drivers, we estimate mean willingness to pay values under various trip conditions and for various traveler characteristics. The study provides statistically significant evidence on the relationships between willingness to pay and the improvement in travel speeds in HOT lanes, the length of the trip, and the urgency of on-time arrival. Furthermore, our study confirms several literature findings from previous studies on the relationship between travelers' willingness to pay and income as well as prior experience with HOT lanes. Some of the findings are qualitatively validated on the basis of the observed travel behavior in choosing tolled facilities over untolled facilities during periods of heightened congestion and urgency.     

The Nature of the Relationship between Corporate Codes of Ethics and Behaviour

A study was conducted in order to examine the relationship between corporate codes of ethics and behaviour. Fifty-seven interviews of employees, managers, and ethics officers were conducted at four large Canadian companies. The study found that codes of ethics are a potential factor influencing the behaviour of corporate agents. Reasons are provided why codes are violated as well as complied with. A set of eight metaphors are developed which help to explain how codes of ethics influence behaviour.     

Discussant Comments on Papers by Andrew Joskow,Daniel Rubinfeld,and Janusz Ordover and Margaret Guerin-Calvert

Review of Industrial Organization -     

What Can We Learn from the U.S. Federal Sentencing Guidelines for Organizational Ethics

In November, 1991, the U.S. Congress enacted the U.S. Federal Sentencing Guidelines legislation which had a dramatic impact on corporate America. Can the Guidelines be used as a model or framework by other countries? Could other countries in the world benefit from adopting a similar piece of legislation? Are there any limitations to consider? In addressing these issues, the authors make the argument that the time has arrived for other countries to consider the development of legislation similar to the Guidelines in order to improve organizational ethics.