Functions of innovation systems as a framework to understand sustainable technological change: Empirical evidence for earlier claims

Understanding the emergence of innovation systems is recently put central in research analysing the process of technological change. Especially the key activities that are important for the build up of an innovation system receive much attention. These are labelled ‘functions of innovation systems’. This paper builds on five empirical studies, related to renewable energy technologies, to test whether the functions of innovation systems framework is a valid framework to analyse processes of technological change. We test the claim that a specific set of functions is suitable. We also test the claim made in previous publications that the interactions between system functions accelerate innovation system emergence and growth. Both claims are confirmed.     

The structuralist theory of imported inflation: an application to South Africa

This study emphasizes the importance of identifying the origin of inflation in the present context of inflation targeting by many emerging market and transition economies. The analysis shows, based on South African data, how structural (supply) and demand inflation can be distinguished. The results indicate that South Africa's inflation experience between 1973q1 and 1998q4 is characterized by two monetary regimes. During the first regime (1973q1–1984q4) the long-run cause of inflation is demand-pull. The second regime (1987q1–1998q4) represents major changes to structural (‘imported’) and cost-push inflation. The two-year period 1985–1986 signifies structural change from the first to the second regime. Moreover, the results in the second regime remain robust when the inflation model is subjected to ‘new’ out-of-sample data until 2001q2. Evidence of structural (‘imported’) inflation in the second regime suggests that inflation should not entirely be squeezed out of the system nor should it necessarily be kept at the lowest possible level, because some inflation may be regarded as the natural by-product of the growth and development process. South Africa's inflation experience points to several lessons for existing (and potential) emerging market and transition economies with some form of inflation targeting.     

The legal challenge to ERISA preemptions

Managed care, once celebrated as a vehicle to halt the increasing cost of health care, has come under increasing fire from patients and health care providers, accused of cutting costs and managing care at the expense of patients. The Employee Retirement Income Security Act of 1974 (ERISA) has been a shield for managed care organizations (MCOs), buffeting them from liability for quality-of-care issues. Lawsuits and legislation are chipping away at the protective shield of ERISA as MCOs find themselves more liable for their decisions and for the care provided by physicians with whom the MCO contracts and provides financial incentives for controlling cost of medical care.     

Did households’ time preference change due to the Great Recession?

Household time preference for US households, as measured by the planning horizon, was fairly stable for many years, but sharply changed with the onset of the Great Recession. Based on an analysis of a combination of the 1992–2013 Survey of Consumer Finances (SCF) datasets, time preference increased in 2010 and remained high in 2013, indicating households were less patient after the onset of the recession. This pattern held up even after controlling for household characteristics.     

Intrinsic inflation persistence

Empirical evidence suggests that inflation determination is not purely forward-looking, but models of price setting have struggled to rationalize this finding without directly assuming backward-looking pricing rules for firms. This paper shows that intrinsic inflation persistence can be explained with no deviation from optimizing, forward-looking behaviour if prices that have remained fixed for longer are more likely to be changed than those set recently. A relationship between the probability of price adjustment and the duration of a price spell is shown to imply a simple “hybrid” Phillips curve including lagged and expected inflation, which is estimated using macroeconomic data.     

Does reduced trade tax revenue affect government spending patterns?

Many skeptics of trade liberalization in the developing world argue that lowering trade taxes can cause significant fiscal pressures in countries particularly reliant on these taxes and result in a reallocation of resources away from important development goals. This paper evaluates whether there is evidence that central governments systematically change the composition of spending priorities in the wake of lowered trade tax revenues as a share of total government revenues. We find no systematic evidence for this concern in a sample of 51 developing countries for the 1991 through 2005 period.     

“Skewness and Stock Option Prices”, Hans Gerber and Bruno Landry,July 1997

We determine the optimal amount of life insurance for a household of two wage earners. We consider the simple case of exponential utility, thereby removing wealth as a factor in buying life insurance, while retaining the relationship among life insurance, income, and the probability of dying and thus losing that income. For insurance purchased via a single premium or premium payable continuously, we explicitly determine the optimal death benefit. We show that if the premium is determined to target a specific probability of loss per policy, then the rates of consumption are identical under single premium or continuously payable premium. Thus, not only is equivalence of consumption achieved for the households under the two premium schemes, it is also obtained for the insurance company in the sense of equivalence of loss probabilities.