Exchange rate uncertainty and the level of investment in selected South-east Asian countries

The effect of real exchange rate uncertainty on aggregate private investment in Indonesia, Malaysia, the Philippines and Thailand is examined using time series data from 1972–2000. Since the use of non-stationary time series data may produce spurious results, the data series are tested for stationarity using the augmented Dickey–Fuller and Phillips–Perron tests. After establishing the stationarity of the data series, cointegration tests are performed. The cointegration test results reject the hypothesis of no cointegration. Therefore, an error correction model is developed and estimated. The estimated results point to an inconclusive empirical relationship between real exchange rate volatility and aggregate private investment.     

Intellectual property rights and foreign direct investment

This paper develops a product cycle model with endogenous innovation, imitation, and foreign direct investment (FDI). We use this model to determine how stronger intellectual property rights (IPR) protection in the South affects innovation, imitation and FDI. We find that stronger IPR protection keeps multinationals safer from imitation, but no more so than Northern firms. Instead, the increased difficulty of imitation generates resource wasting and imitation disincentive effects that reduce both FDI and innovation. The greater resources absorbed in imitation crowd out FDI. Reduced FDI then transmits resource scarcity in the South back to the North and consequently contracts innovation.     

Alternative Ways to Teach and Learn Economics: Writing,Quantitative Reasoning,and Oral Communication

The authors describe an interesting attempt by one university to require of students demonstrated competencies in the areas suggested by the title—writing as freshmen, quantitative reasoning as sophomores and juniors, and oral communication as juniors or seniors. Quantitative measures of the effectiveness of the program are not provided.     

On intrabrand and interbrand competition: The strategic role of fees and royalties

We examine oligopolistic markets with both intrabrand and interbrand competition. We characterize equilibrium contracts involving a royalty (or wholesale price) and a fee when each upstream firm contracts with multiple downstream firms. Royalties control competition between own downstream firms at the expense of making them passive against rivals. When the number of downstream firms is endogenous, each upstream firm chooses to have only one downstream firm. This result is in sharp contrast to previous literature where competitors benefit by having a larger number of independent downstream firms under only fixed fee payments. We discuss why allowing upstream firms to charge per-unit payments in addition to fixed fees dramatically alters their strategic incentives.     

Making Welfare Work: The Politics of Reform

Welfare reform, if it is to be successful in the longer–term, needs to be based on a carefully thought out political strategy. The new political arithmetic, where the poor are an electoral minority, and many working class voters have rising aspirations, requires welfare reform to appeal to the interests of the majority. While welfare reform similarly must work with rather than against the grain of human nature, self–interest has to be harnessed in a way which builds an inclusive programme. The Government's drive towards ever greater means–tested provision looks good in year one. The penalties means–tests impose on working, saving and honesty become apparent only later with an ever–growing proportion of the population having to think about how best to work this system. Equally importantly, this drive to even greater means–tested dependency is set to blow apart some of the key characteristics which underpin a common citizenship.     

Employee age and voluntary development activity

It is known that older workers undertake less formal training than younger ones, but little information is available about age-patterns in voluntary development activities undertaken in an employee’s own time. In a study of 1798 manufacturing workers, age and ten other factors were examined in relation to four types of activity: participation in a tuition refund scheme, learning in an employee development programme, attendance at an employee development centre, and use of a personal development record. Significant age- differences were found, and key influential factors were identified as older workers’ lower educational qualifications (representing both cognitive and affective differences) and their more limited learning motivation (linked to lower learning confidence and greater perceived time constraints). However, older individuals who had previously undertaken each form of development were as positive about that previous activity as were younger participants. Possible interventions to increase voluntary development at older ages include rewards for participation, enhancement of basic skills, pretraining in appropriate learning strategies, sequential exposure to graded learning demands, and steps to change organisational stereotypes of older staff.     

Desertification in Africa

This article looks at desertification — both on a global scale and as it relates to Africa. Desertification is defined here as the diminution or destruction of the biological potential of the land, and is caused basically by overuse of inherently fragile productive systems. After distinguishing between desertification and drought (two closely related ecological hazards), the author goes on to outline the terrible effects of desertification and the impact it has on the world population's ability to feed itself. Finally, recommendations to halt and reverse desertification are looked at together with attempts to mobilize the resources needed to face this global problem.     

The problem with neoclassical institutional economics: A critique with special reference to the North/Thomas model of pre-1500 Europe

A variety of scholars with widely differing political and disciplinary orientations continue to be fascinated by the prospect of making endogenous variation or changes in institutional structures through the use of a general model. While sympathetic to the appeal of such a research program, I argue in this paper that this methodological objective is, in the following sense, not attainable. At a minimum, some subset of institutional structures or rules needs to be treated as parametric in a general equilibrium model, and granted the same explanatory status traditionally accorded tastes, technologies, and endowments in such models. This proposition is developed through a critical analysis of work representative of this research program: in particular Richard Posner's Economic Analysis of Law (Boston: Little, Brown 1973) and, more especially, Douglass North and Robert Paul Thomas' The Rise of the Western World