Productivity and efficiency in the US: effects of business cycles and public capital

We add to the literature on the US productivity slowdown and effects of public capital on productivity by employing Malmquist productivity indexes to measure productivity. These indexes allow us to decompose productivity growth into efficiency change and technological innovation. We derive these components for each observation, which we exploit to explore factors which may lead to differences in productivity across regions, including business cycles, both own-state and cross-border public infrastructure investment, and relative sizes of the manufacturing, service and public sector. Our results suggest that the components of total factor productivity change lend important insights into the fairly complex effects of public capital on productivity growth.     

Effects of limit order book information level on market stability metrics

Using an agent-based model of the limit order book, we explore how the levels of information available to participants, exchanges, and regulators can be used to improve our understanding of the stability and resiliency of a market. Ultimately, we want to know if electronic market data contains previously undetected information that could allow us to better assess market stability. Using data produced in the controlled environment of an agent-based model’s limit order book, we examine various resiliency indicators to determine their predictive capabilities. Most of the types of data created have traditionally been available either publicly or on a restricted basis to regulators and exchanges, but other types have never been collected. We confirmed our findings using actual order flow data with user identifications included from the CME (Chicago Mercantile Exchange) and New York Mercantile Exchange. Our findings strongly suggest that high-fidelity microstructure data in combination with price data can be used to define stability indicators capable of reliably signaling a high likelihood for an imminent flash crash event about one minute before it occurs.     

An empirical study of the determinants of UK oil and gas voluntary disclosures

Significant oil and gas firm market value is derived from their physical reserve quantum, assets which are not recorded on their statements of financial position. This article provides empirical evidence regarding voluntary disclosure of such reserves in line with the previously unresearched UK sector with regard to its unique reporting guidelines. The study considers both the reporting of the reserve quantum and the quality of that reporting. This article seeks to inform the International Accounting Standards Board’s (IASB’s) on-going consideration of mineral resource reporting. Listed companies are considered to evidence forms of reserve disclosure with a logistical regression approach applied to measure determinants of reporting. The risk associated with mineral reporting reserves is hypothesized as the key disclosure driver whilst controlling other relevant variables. The majority of firms disclosed reserve quantities in some form but only a minority disclosed in line with recommended practice, disclosure quality being more variable between companies. The findings indicate that a voluntary disclosure approach is ineffective, partially explained by agency related behaviour. Risk, proxied by the stage of production, drives reserve disclosure showing that producer firms are more likely to disclose reserve quantum balances and of a significantly higher quality.     

Access to finance for innovators in the UK's environmental sector

Technological innovations are seen as one of the best solutions to mitigate the environmental impacts of economic activity. Yet, the innovative success of firms, especially small- and medium-sized enterprises (SMEs), in the environmental sector is dependent on the presence of appropriate external financing to support their innovative activity. In an attempt to understand the circumstances surrounding the financing of 330 UK SMEs from the environmental sector between 2007 and 2010, we investigate the relationship between different types of innovation activity and sources of external finance. We observe a clear division of labour between the three external sources of finance, namely, banks, venture capital and government in terms of the types of innovations they finance. We also identify that finance gap affects environmental SMEs with early-stage and less applied research projects. We discuss the challenges for UK environmental SMEs to engage in innovative activity and call for an increased government action in order to support innovative SMEs with early-stage projects and to instil confidence in the private investors by signalling long-term commitment.     

The Manager as a Person

Abstract Professor John Roemer has defended a future market socialist order. His model would encompass an egalitarian coupon market for the ownership of firm shares, a private sector for firms below a certain size, a system of public bank loans for the raising of capital, and an industrial policy of differential interest rates for various economic sectors. This paper argues that such a model would generate perverse incentives for firms, shareholders, public officials, and private entrepreneurs. It also argues that Roemer's contention that such a model would produce a more environmentally sensitive polity is problematic.     

The Point of Effective Demand

Abstract

Keynes's principle of effective demand conceives competitive equilibrium in terms of the choices of entrepreneurs, investors and consumers, rather than of the optimal allocation of factors of production. In The General Theory, effective demand is distinguished from aggregate demand and from income, expected or realised, and there is no suggestion that equilibrium means the convergence of expectations. Reconsideration of Keynes's use of time and equilibrium periods leads to the conclusion that he treats employment as in continuous equilibrium, at the point of effective demand, determined by the state of expectation, the correctness of which is strictly irrelevant. The nature of the equilibrium represented by the point of effective demand is here described, not in terms of the multiplier, but in terms of the continuous equilibrium of supply and demand in short-term forward markets. This reading is faithful to Keynes's conception of aggregate demand as dependent upon the expectations of entrepreneurs, and it resolves the meaning of his ‘long-period employment.’ Formal appendices identify the differences between Keynes and Walras and the nature of the multiplier. The paper concludes that the Keynesian cross and ‘Swedish’ analysis should be abandoned, and the Walrasian conception recognised as only the limiting case of general competitive equilibrium in a monetary economy.     

The seasonal unit root structure in New Zealand Macroeconomic variables

ADF unit root tests are generally applied to macroeconomic data prior to testing theoritical models to ensure that all relevant variables are integrated of the same order. Not only is it important to test that these variables are integrated of the same order but also that a cointegrating relationship exists; failure to do so raise the specture of false inference associated with the spurious regression problem. The seasonal nature of quarterly data adds a further proplem which has generally been overcome by seasonally adjusting the data using procedure such as the census X-11 rather than suppressing it, have attempted to determine whether the seasonal component in each variable exhibits stochastic non-stationary. This paper analysisunit roots in a seasonal setting and compares the recently developed tests for seasonal unit roots as well as the standard augmented Dickey-Fuller zerop frequency unit root tests. Of the variables tested relatively few paper to be integrated at the seasonal frequenciues and, as other studies suggest,determinstic seasonal effects are typically more important than stochastic ones.     

Spontaneous visualization and concept evaluation

This paper proposes that customers often respond to brand extension concepts by visualizing the product. We call this process spontaneous visualization and suggest that it precedes concept evaluations. In two studies, we show that spontaneous visualization is enhanced by the fit between the parent brand and the extension category and by the ease with which the product category can be imagined. The appeal of the visualized image in turn determines whether visualization enhances or decreases concept evaluations. In addition, we find a stronger link between product evaluations and delayed choice when evaluations are based on visualization; evaluations based on visualization hence appear to be more “valid” in the sense of predicting subsequent behavior. Implications of these findings and ideas for future research are discussed.

Increasing the usability and accessibility of geodynamic modelling tools to the geoscience community: UnderworldGUI

Geoscientists are faced with a number of complexities that represent obstacles to the development of realistic simulation of deep earth processes. Realistic 4D thermo-mechanical simulation using software packages like Underworld and Gale, when combined appropriately with geoscientific expertise, can lead to novel insights into the deformation of geological structures at a wide range of time and spatial scales. The challenge for end-user geoscientists lies in applying their knowledge within the framework of the software’s input specification, including initial, internal, and boundary conditions and output visualization parameters. We have built a Graphical User Interface (GUI) to remove many of the difficulties related to editing the Extensible Markup Language (XML) encoded input files of Underworld/Gale geomodels and therefore, to greatly broaden the user base of these software packages. By helping Underworld/Gale to meet a large audience, we provide a tool to the geoscience community that helps to move from untested conceptual models to physically valid, properly scaled modelling. Furthermore, the UnderworldGUI offers a mechanism for storing and retrieving experimental models in a centralised database, thus providing the geoscience community with a means to share the outcomes of its experimental research. Further details of the UnderworldGUI are available at the web site http://www.wiki.vislab.usyd.edu.au/moinwiki/UnderworldGUI.