Asset market hangovers and economic growth: the OECD during 1984-93

Asses prices and investment were unusually weak throughout theindustrial world during the early 1990s. This paper highlightsthis stylized fact, and connects it with another: in most ofthe industrial world, asset markets boomed for several yearsbefore collapsing around 1989. The paper suggests that assetmarket bubbles during the late 1980s may have left the industrialworld with an 'asset market hangover' in the early 1990s, inthe form of sluggish asset markets and investment. Empiricalsupport for this hypothesis is provided based on cross-countrydata for equity and real estate markets in most industrial countries.We suggest that financial market developments not justifiedby fundamentals can substantially affect real activity.     

Futures assessment by field anomaly relaxation : A review and appraisal

Futures research includes the problem of generating reasonably exhaustive and plausible scenarios for a given topic, a problem for which there are no truly satisfactory solutions. This article reviews and evaluates a method, field anomaly relaxation, first put forward some 20 years ago. The evaluation is in the context of an illustrative study of political developments in Europe. The research reconstructs and further develops the method and concludes that it has something to offer for scenario generation. Its weaknesses are identified and suggestions for further research are made.     

The historical origins of the Philippine economy: a survey of recent research of the Spanish colonial era

This article surveys recent research of the Spanish colonial era in the Philippines since the late eighteenth century. While highlighting imperfections in our understanding, the article establishes the parameters with which the Philippine economy entered the twentieth century. It outlines the intensification of Spanish colonial rule through changes in the taxation system, particularly the expansion of forced tobacco cultivation until its abolition in 1882. Since then, the Spanish set out to further change and intensify colonial rule but contradictions in the system of colonial rule caused the effort to come to an abrupt end in 1898.     

Family income and child outcomes in Canada

Abstract.  A positive relationship between income and child outcomes has been observed in data from numerous countries. A key question concerns the extent to which this association represents a causal relationship as opposed to unobserved heterogeneity. We use data from the National Longitudinal Survey of Children and Youth to implement a series of empirical strategies for estimating the existence and size of the effect of income on three measures of cognition. Our results indicate that the effect of income on these outcomes may well be positive, but that it is likely to be smaller than conventional estimates. JEL Classification: I10     

E-Business Transformation via Alliance Clusters

The number of firms using alliances as part of their corporate venturing or market entry strategies has surged over the past decade. Three common reasons cited for pursuing alliances are technology convergence, market access and alliance partners' complementary resources. This paper contrasts the alliance strategies of HP and IBM, two major competitors in electronic services (i.e. Internet-based 'e- service') businesses, using the Familiarity Matrix as a display tool to portray the strategies. Whereas the HP strategy is to attempt to establish its technology infrastructure as the standard e-services infrastructure on the Internet, IBM aims to position its IBM Global Services, rather than its technology, at the center of this ecosystem.     

COLLUSION IN LOCAL PUBLIC WORKS*

A hierarchical model of collusion in local public works is presented. A local authority plans to undertake a project, delegating its construction to a construction firm. Both of them know the project's cost. However, the federal government decides whether to subsidize the project without knowing its cost. Therefore, the local authority and the constructor may agree to misreport their private information, in order to benefit from the allocation of federal grants. We show that different collusive behaviors may emerge. Then, we characterize the optimal federal grant policy. Finally, we investigate when constructing (shutting down) useless (valuable) projects is optimal.     

Loanable Funds, Monitoring and Banking

This paper studies financial intermediation in a general equilibriumoverlapping generations model. Indivisible investment projects combine withinformational imperfections to create a (hidden action) moral hazard problemand introduce a role for third-party monitoring. Agency costs at theintermediary level are also considered. Under some conditions, monitors canbe viewed as banks facing a non-trivial portfolio diversification problem.Equilibria are derived in which a large nationwide bank coexists with anumber of community-regional banks, a structure of strong empiricalrelevance. Policies such as a mandatory reserve requirement are shown tohave substantial effects on the levels of investment in the economy.     

The New Urbanism Versus the Market Process

The new urbanism argues that land-use planning should be used to create higher-density development and to promote alternatives to the use of personal automobiles for transportation. The concerns of the new urbanist movement are shown to be misplaced, and the goals of the new urbanism are shown to be in conflict with market incentives, making them difficult to implement in any event. A better policy for more efficient land use would be for governments to plan more effectively for their own infrastructure development while allowing the development of privately-owned land to be guided by market forces.