Factor Proportions and East Asian Industrialization: A Note

This note assesses the robustness of factor proportions classifications in international comparisons. The issue is examined with reference to five East Asian economies experiencing rapid industrialization and upgrading, and for a range of labour-intensive and near labour-intensive industries. We conclude that most of the rankings are consistent with a priori expectations. Moreover, there has been no major and systemic alteration in these rankings in the period under study.     

A Dawn of Convergence?: Third sector policy regimes in the ‘Anglo-Saxon’ cluster

Abstract

Since the 2008 financial crisis, the third sector policy and regulatory regimes in the ‘Anglo-Saxon cluster’ have been subject to considerable policy churn. Comparing the reforms in the ‘meta-policies,’ regulations and financing in England, US, Canada and Australia, this analysis identifies both significant policy convergence and divergence. A new ideational landscape has emerged that is dominated by a focus on transparency, impact and social innovation. Convergence is not the whole story, however. In particular, the overarching meta-policies are absent, increasingly weak or divisive, suggesting a future characterized by the sporadic intervention of parochial politics and the likelihood of increased difference.     

The Matching Problem (and Inventories) in Private Negotiation

This study examines laboratory market outcomes under alternative matching risk scenarios and advance production. Limited access and/or asymmetry in the number of buyers and sellers cause a matching problem. When sellers hold inventory before sale and there is buyer concentration, prices are about 23% below the competitive level and close to the predicted monopsony price. The bargaining advantage shifts to buyers in this market environment. Sellers can benefit by creating alliances or cooperatives to increase their bargaining position for price and overcome poor access to buyers.     

Effects of Interspersed versus Summary Feedback on the Quality of Students' Case Report Revisions

Abstract

This study examines whether students show greater improvement in written case analyses when given feedback that is either interspersed throughout their written case analyses or presented only as a summary, and whether the benefits of these placements vary across differing levels of student performance in the course. Results from an exploratory field experiment conducted with Canadian accounting students who revised and resubmitted case analyses indicate that the effectiveness of feedback depended on an interaction between its placement and the course performance of students to which it was provided. Lowest-performing students increased the quality of their case responses most when provided with interspersed rather than summary feedback, mid-level students improved more when given summary rather than interspersed feedback, and highest-performing students improved significantly regardless of feedback placement. The primary conclusion from this study is that feedback placement influences how well students at different levels respond, suggesting that teachers should consider students' relative course performance when determining the most appropriate placement for their feedback. We also present evidence of the factors that affect the initial quality of case analyses and which influence students' decisions to revise and resubmit their case analyses.     

Fracking in Deutschland — eine Option für die Zukunft!

Extraction of shale gas in Germany (fracking) is better left as an option for the future. Today, owners of deposits in many other countries have uncertain property rights and extract too quickly. German deposits may appreciate in value if left in the ground. They also better contribute to national energy security there than if extracted and depleted. Waiting also allows Germany to learn from the mistakes of others and to take this new information and the improvements in extraction technology into account when deciding about extraction in the future. Such decisions should not be left to the resource extraction industries. Their objectives are likely to differ from the objective of maximising the rent from the nation’s shale gas.     

Stefano Battilossi,Youssef Cassis,and Kazuhiko Yago (eds.): Review of Handbook of the history of money and currency

Business Economics -     

The Positive Externalities of Chapter 13 “Cramdowns” Could Prevent the Next Foreclosure Crisis

Revision of Bankruptcy Code 11 U.S.C. § 1322(b)(2) would permit “cramdowns” wherein bankruptcy judges would administer the modification of residential mortgages only when mortgage-lending abuses were most rampant (a real estate bubble). Foreclosure spill-over effects systemically worsened the housing crisis and were not evenly diffused throughout the broader housing market. Throughout 2003–2006, an oversupply of underpriced mortgage finance emanating from lax underwriting standards bid up residential prices. Relaxation of underwriting protocols came about from the mortgage market’s institutional swing from regulated agency securitization (predominantly government-sponsored enterprises “GSEs”) to unregulated securitization (shadow banking). This resulted in an untenable residential-price bubble as synthetically inexpensive credit from investors’ mispricing amplified mortgage demand, while greater mortgage quantity nudged up housing prices. The result was a self-referential cycle of waning residential prices supporting and perpetuating nigh incessant foreclosures: the bubble had burst. Cramdowns would incentivize lenders to be less inclined to loosen underwriting standards, or when done, to include this factor in the risk premium of the cost of credit. Enhancing Chapter 13 with the muscle to alter residential mortgages would ameliorate an institutionally structural issue endemic to the past (and upcoming?) foreclosure crisis.     

The Bank of England and Parliament were monetarily adroit during the Napoleonic Wars

Abstract

With the connivance of Parliament, was the Bank of England's over issue of banknotes inflationary? The inflation stemmed from military subsidy and Peninsula campaign payments, as well as food imports, far in excess of Britain's export earnings to cover these capital transfers (particularly when crimped by the Continental Blockade), and not merely from domestic credit over issue. Neither domestic money creation nor the fiscal theory of the price level best explains the imbalance in Britain's international accounts during the Napoleonic Wars. This deficit stemmed from domestic production shortfalls in essentials (above all food production) and contractual obligations such as military spending/subsidies relative to the pound's international purchasing power which emanated from the ability of Britain to sell exports and replace imports with domestic output (raise food production internally). These types of highly inelastic transactions tended to operate independently of domestic money creation, fiscal policy (taxes) or price developments (inflation). This article tracks England's bullion debate, which concerned whether gold prices rose (and hence sterling's exchange rate fell) because military capital transfers overwhelmed the balance of payments, or because the Bank of England over issued paper money after the gold cover was removed in 1797. The issues herein are not antiquated because the primary issues in monetary debates for two centuries have concerned the cause of inflation and deflation, and whether the domestic money supply or the balance of payments is responsible. Determining actual causation is critical for the proper solution: monetary deflation, or domestic and international restructuring of trade and investment.