Optimal regime switching and threshold effects

We consider a general control problem with two types of optimal regime switch. The first one concerns technological and/or institutional regimes indexed by a finite number of discrete parameter values, and the second features regimes relying on given threshold values for given state variables. We propose a general optimal control framework allowing to derive the first-order optimality conditions and in particular to characterize the geometry of the shadow prices at optimal switching times (if any). We apply this new optimal control material to address the problem of the optimal management of natural resources under ecological irreversibility, and with the possibility to switch to a backstop technology.     

Evolving China Strategies: How the Japanese Compare

Taking a sceptical view of the ‘Asian miracles’ proposition that government failure is the main culprit behind development failure, this article reviews the Philippine development experience. The Philippine configuration consists of a weak state carrying out industrial promotion and a large private sector whose dynamics depend heavily on state-managed privileges. In the final section, the article proposes an alternative to the rent-seeking model, in which rents defined as returns contingent on political position and rivalry over political position determine private investment behaviour. In such a society, there is limited internal basis for structural change and growth is accidental to external developments.     

High School Economics: Problems and Prospects

Asserting that the basic problem in high school economics is that we have not identified “what high school economics ought to be,” Warmke proceeds to spell out some of the specific obstacles hindering the development of more and better secondary level courses. He then discusses some of the more encouraging trends in research, teaching, teacher-training, materials development, and the like, and makes some cautious projections for the future.     

SEMIPARAMETRIC VECTOR MEM

Financial time series are often non‐negative‐valued (volumes, trades, durations, realized volatility, daily range) and exhibit clustering. When joint dynamics is of interest, the vector multiplicative error model (vMEM; the element‐by‐element product of a vector of conditionally autoregressive scale factors and a multivariate i.i.d. innovation process) is a suitable strategy. Its parameters can be estimated by generalized method of moments, bypassing the problem of specifying a multivariate distribution for the errors. Simulated results show the gains in efficiency relative to an equation‐by‐equation approach. A vMEM on several measures of volatility justifies a joint approach revealing full interdependence. Copyright © 2012 John Wiley & Sons, Ltd.     

German views on UNCTAD II

Something about the immense importance of UNCTAD II can be inferred from the hypothetical assumption that the joint attempt of 132 nations to build a “world without poverty, misery, and despair” might founder, and from sober consideration of the effects of such an event. Numerous representatives of developing countries, in their introductory addresses to the Conference, have stressed the indispensable need for bridging the gap which separates the world into the two camps of the affluent and the poor, lest economic backwardness cause again and again major conflicts. We have discussed some aspects of UNCTAD II with Dr Schulz, the deputy acting head of the German deannation, shortly before he left Germany for New Delhi.     

Meaningful Measures: Indicators on Progress, Progress on Indicators

This article reviews the international debate on statistical indicators. It describes historical backgrounds, as well as the present chaotic situation. It discusses what statistical indicators are and what they are for, as well as criteria for the choice of indicators, designed to monitor the achievement of economic, social, demographic, environmental and other goals set by United Nations conferences. Some suggestions for future work are made.     

Women and Minorities in Introductory Economics Textbooks: 1974 to 1984

The authors conducted a painstaking review of widely used economics textbooks to determine if or how issues relating to race and gender are treated. In doing so, the authors also shed light on the nature of the treatment of these issues.