Catch-up and fall-back through innovation and imitation

Will fast growing emerging economies sustain rapid growth rates until they “catch-up” to the technology frontier? Are there incentives for some developed countries to free-ride off of innovators and optimally “fall-back” relative to the frontier? This paper models agents growing as a result of investments in innovation and imitation. Imitation facilitates technology diffusion, with the productivity of imitation modeled by a catch-up function that increases with distance to the frontier. The resulting equilibrium is an endogenous segmentation between innovators and imitators, where imitating agents optimally choose to “catch-up” or “fall-back” to a productivity ratio below the frontier.     

The Accounting Profession: Substantive Change and/or Image Management

The accounting profession’s image and reputation is built upon the members of the profession acting with the “highest sense of integrity” in “the public interest” (AICPA, 2003, www.aicpa.org/about). The Enron debacle initiated the latest crisis facing the profession regarding its image and reputation. The American Institute of Certified Public Accountants (AICPA) is the largest professional body representing the accounting profession and the one to which regulators have looked in establishing and upholding professional standards relating to the public practice of accounting and auditing. One of the AICPA’s responsibilities is to “promote public awareness and confidence in the integrity, objectivity, competence and professionalism of CPAs ....” (AICPA, 2003, www.aicpa.org/about). We analyze the public statements issued by the AICPA (i.e., press releases, speeches of officers, testimony, published articles) during this ethical and identity crisis beginning with the AICPA’s first public statement on the Enron debacle (AIPCA 2001) and concluding with the AICPA recognizing the need for a “new accounting culture” (Melancon 2002). In order to better understand the public discourse, we use image restoration theory (Benoit, 1995), because it provides a typology of strategies for dealing with the public face of crises. We identify the three most common strategies the AICPA employs during this period. Proposals for taking corrective action represent the most commonly employed strategy, but the analysis also indicates an attempt to evade responsibility by claiming defeasibility and to reduce the offensiveness of the situation by employing a bolstering strategy. A second analysis using DICTION, a software package useful in revealing latent dimensions in a text, indicates that early statements tend to use language related to accomplishing specific action while the later statements tend more toward general language that relates to peoples’ everyday lives. The findings raise questions as to substantive nature of the changes proposed by the AICPA, and thus, the extent to which the public interest is being served by them.     

Pooling surveys in the estimation of income and price elasticities: An application to Tunisian households

This paper presents a methodological extension of Deaton's (1990) model for estimating price elasticities, by pooling Tunisian data from several surveys to improve the inter-cluster variability of unit values which is one of the key elements used in the derivation of these elasticities. Since the surveys cover a relatively long period, possible structural changes in consumption behaviour occurring over time are accounted for by postulating that certain response coefficients of the basic model vary from one survey to the other. The own price and cross price elasticities calculated using appropriate estimates of the extended model are satisfactory both from the economic point of view of their sign and the statistical point of view of their significance and superior to those obtained using a single survey. First version received: April 2000/Final version received: June 2001 RID="*" ID="*"  The authors would like to thank Angus Deaton and anonymous referees for useful comments and suggestions.     

Pay Without Performance: Overview of the Issues

In their recent book, Pay Without Performance: The Unfulfilled Promise of Executive Compensation , the authors of this article provided a comprehensive critique of U.S. executive pay practices and the corporate governance processes that produce them, and then offered a number of proposals for improving both pay and governance. This article presents an overview of their analysis and proposals.
The authors' analysis suggests that the pay-setting process in U.S. public companies has strayed far from the economist's model of "arm's-length contracting" between executives and boards in a competitive labor market. In place of this conventional model, which is standard in corporate law as well as economics, the authors argue that managerial power and influence play a major role in shaping executive pay, and in ways that end up imposing significant costs on investors and the economy.
The main concern is not the levels of executive pay, but rather the distortion of incentives caused by compensation practices that fail to tie pay to performance and to limit executives' ability to sell their shares. Also troubling are "the correlation between power and pay, the systematic use of compensation practices that obscure the amount and performance insensitivity of pay, and the showering of gratuitous benefits on departing executives."
To address these problems, the authors propose three kinds of changes:

• 1)

  increases in transparency , accomplished in part by new SEC rules requiring annual corporate disclosure that provides "the dollar value of all forms of compensation" (including "stealth compensation" in the form of pensions and other post-retirement benefits) and an analysis of the relationship between the past year's pay and performance, as well as more timely and informative disclosure of insider stock purchases and sales;

       

选择代表:自然资源管理分权管理的机构及其权力

论述了有效的分权管理的中心条件——代表制。代表性是分权管理公式的关键,将代表性分为反应性和问责性是非常有用的。分权管理的结果似乎是代表性的功能和管理动机。为了评价选择的地方机构是否能够形成有效的分权管理,关键的问题是选择的机构是否对他们管理范围内的人民负责。许多国家缺乏可持续的具有代表性的地方政府。不管有或没有代表性的地方政府,也不管是哪个权威掌握对环境的权力,问责性措施都可以培育政府一定程度的向下的责任。选举并不是达到这样的问责制的唯一形式。分权管理改革的安全性和可持续性,大部分取决于中央政府向其它实体转移权力时采用的方式。制度转移是最安全的也是最具可持续性的。分权管理的有效和公正的潜力取决于地方机构的代表性。但是在几种情况下,选择民主负责的地方机构然后赋予其民主权力。     

Consumer susceptibility to interpersonal influence and attributional sensitivity

This research examines the relationship between consumer susceptibility to interpersonal influence and attributional sensitivity. It is hypothesized that consumer susceptibility to interpersonal influence is moderated by the level of attributional sensitivity. Across two studies, this hypothesis was supported. Individuals high in attributional sensitivity scored higher on various measures of consumer susceptibility to interpersonal influence than individuals low in attributional sensitivity. This suggests that consumers susceptible to the influence of others are more likely to purchase products that they perceive will lead others to make favorable attributions about them, and avoid purchasing products that they perceive will lead others to evaluate them negatively. © 1992 John Wiley & Sons, Inc.     

ASIAN REAL EXCHANGE RATES AND OIL PRICES: A COINTEGRATION ANALYSIS UNDER STRUCTURAL BREAKS

We examine the long‐run relationship between Asian real exchange rates and oil prices in the presence of structural breaks. The relevance of considering breaks is demonstrated by utilizing the Johansen et al. procedure that allows for up to two predetermined breaks. Using conventional tests that do not consider breaks reveals no evidence of cointegration. However, the Johansen et al. procedure clearly demonstrates the importance of considering breaks and provides strong support for a stable long‐run relationship in all but Japan and the Philippines. Moreover, the results suggest evidence of bi‐directional causality in Malaysia and Thailand, uni‐directional causality from exchange rates to oil prices in Korea, the Philippines, and Singapore, uni‐directional causality from oil prices to the exchange rate in Indonesia, and no evidence of causality in Japan.     

Understanding the Relationship between Inflation and Growth: A Wavelet Transformation Approach in the Case of Bangladesh

This paper re‐examines the relationship between inflation and economic growth in developing countries. Both the theoretical and the empirical literature are extremely divided on this issue. We apply a relatively new empirical technique – the continuous wavelet transform – to Bangladesh. Bangladesh is of interest because of its remarkable economic growth and poverty reduction during the last 30 years in combination with, for a developing country, a controlled inflation. The wavelet analysis is a contribution because it displays how the correlation and the lead–lag structure between variables change over timescales, taking into account that growth and inflation can follow several different cycles. Comovements between variables are generally studied in the time domain. Results from studies in the time‐domain study can be sensitive to the frequency of observations. On the other hand, studies in the frequency domain are not easily translated into time domains that can be associated with economic policies. The wavelet methodology finds a balance between time and frequency domains. Our study finds that growth Granger causes inflation at all frequency scales, starting from the short run to the very long run. Inflation, on the other hand, Granger causes growth in the long run but not in the short run. This result has implications for Bangladesh, and as such for similar developing countries, where some policymakers believe that inflation must be kept at very low levels for sustained economic growth.