Capitalism and freedom?

This essay tests Milton Friedman's conjecture that capitalism is a necessary condition for political freedom. For the decade around 2000 indices of the degree of capitalism and the degree of political freedom are highly correlated and provide plausibility for Friedman's conjecture. In looking at changes over time in the nineteenth century, however, the analysis refutes Friedman's conjecture. These apparently contradictory results are reconciled by showing that both capitalism and freedom are related to such variables as the educational level of the population so that, although not causally tied, they are correlated in a cross-national comparison.     

Population suburbanization in Barcelona, 1991–2005: Is its spatial structure changing?

The aim of this article is to determine whether population suburbanization is occurring in Barcelona and, if so, how it is organized spatially. This issue is addressed through an analysis of the spatial structure of the population of the Barcelona Metropolitan Region and its evolution between 1991 and 2005. The ultimate aim is to determine whether there is a process of population suburbanization during these 15 years and, if this is the case, whether it arises according to a dispersed or a polycentric model. The results are consistent with a polycentric model for 1991 and 2005. However, this spatial structure is changing because of the process of suburbanization, which is affecting both the central business district and subcenters. During this same period, it is found that the role played by transport infrastructure in determining the spatial structure is becoming stronger. Without considering this latter result, it would appear that the dispersed model would best describe the next spatial stage. On the other hand, if the role played by transport infrastructure is taken into consideration, the next spatial stage would be an accessibility model in which population concentrates along freeways and highways.     

Estimation of Asymmetric Stochastic Volatility Models: Application to Daily Average Prices of Energy Products

Energy supply and demand, and as a consequence energy prices, are likely to represent one of the biggest challenges of the 21st century. Commodity markets exhibit increased volatility when there is little or no underutilized supply capability to meet natural fluctuations in demand. In the case of energy markets, the large capital requirements and significant lead times associated with energy production and delivery make them more susceptible to the imbalances in supply capability and demand. Energy price volatility has destructive impact on market agents, and this impact is intensified when the prices exhibit asymmetric volatility. This article pursues two aspects of the issue. First we consider general aspects, especially the asymmetric pattern of volatility of daily returns of different types of energy products. Then, we analyze the behaviour of daily returns by using traditional models of volatility that include AGARCH, TGARCH, EGARCH, and ARSV strategies, as well as a threshold asymmetric autoregressive stochastic volatility (TA-ARSV) model that we propose. The energy products considered in this analysis are probably the most relevant energy products for the economic activity of the nations and the economic relations between countries: Crude Oil (OPEC reference basket and London Brent index), Gasoline, Natural Gas, Butane, and Propane. We use spot prices and the time reference ranges from 1986–1993 to 2009 depending on the product.     

Ecosystem Service Value and Agricultural Conversion in the Amazon: Implications for Policy Intervention

We explore the welfare implications of agricultural expansion in the Brazilian Amazon by comparing spatially explicit estimates of soybean rents and the value of ecosystem services. Although these estimates are generated from different datasets, models, and estimation techniques, the values are comparable, such that the value of ecosystem services is greater than soybean rents for about 61% of the total area and 24% of the area where soybean rents are positive if protected areas are well enforced. Based on the balance between the benefits and costs of conversion, failure to value ecosystem services reduces total social welfare by 7.13 billion dollars annually relative to an optimum. Policy instruments that internalize the value of ecosystem services via protected lands, land conversion taxes, conservation subsidies, or excise taxes can avoid much of this loss. Regardless of intervention regime, policy makers should be cognizant of the diminishing net benefits of converting natural ecosystems to agriculture. Realizing the final 3.8% requires the conversion of an additional 15% natural ecosystems to soybean production.     

Coordination in a skeptical two-group population

Journal of Economic Interaction and Coordination - This paper explores a situation in which a population split into two groups attempts to achieve the socially efficient outcome of a coordination...     

Family firm’s management composition: the role played by family members’ age in TMT and supervisor levels

Quality & Quantity - Family firms (FFs) are the backbone of entrepreneurial fabric in many countries. Management of such businesses is complex because of their features: the overlap between...     

Why Sweden's pension reform was able to be successfully implemented

Governments that do not reform pay-as-you-go (PAYG) pension systems will eventually face a pension crisis. In a democracy, reforms require majority support. The problem is that pension reform requires today's generation to bear the burden to avoid burdening tomorrow's generation. Sweden recently passed pension legislation that specifies a gradual transition from a public defined-benefit plan to a defined contribution plan. Why was Sweden successful in reforming its pension system? We find that a political economy perspective helps to answer this question: there are more winners who would vote in favour of the reform than non-winners who would vote against it. When comparing the net effect (present value of expected benefits minus present value of remaining contributions) of the new and old systems, contributions of the working generation (age < 53) are reduced by more than their expected benefits.     

Production Technology Estimates and Balanced Growth

Capital‐labour substitution and total factor productivity (TFP) estimates are essential features of many economic models. Such models typically embody a balanced growth path. This often leads researchers to estimate models imposing stringent prior choices on technical change. We demonstrate that estimation of the substitution elasticity and TFP growth can be substantially biased if technical progress is thereby mis‐specified. We obtain analytical and simulation results in the context of a model consistent with balanced and near‐balanced growth (i.e. departures from balanced growth but broadly stable factor shares). Given this evidence, a constant elasticity of substitution production function system is then estimated for the US economy. Results show that the estimated substitution elasticity tends to be significantly lower using a factor‐augmenting specification (well below one). We are also able to reject conventional neutrality forms in favour of general factor augmentation with a non‐negligible capital‐augmenting component. Our work thus provides insights into production and supply‐side estimation in balanced‐growth frameworks.     

Distinctive Features of Environmental Innovators: An Econometric Analysis

This paper analyzes the main determinants influencing environmental innovators (i.e. firms developing or adopting environmental innovations) in Spain with respect to non‐environmental innovators. Similarly to other contributions in the literature, our results show that Spanish environmental innovators respond to regulatory stimulus in the form of demand‐pull and technology‐push instruments. They have a high internal technological capability and combine internal and external information sources, mostly in cooperation with knowledge institutions. Environmental innovators are more concentrated in mature, traditionally highly polluting sectors, but new firms are not more environmentally innovative than incumbents. Most importantly, in contrast to other environmental innovation studies, mostly carried out in a German context, we have not found evidence of a market pull from either the domestic or international markets. Furthermore, cost savings are not found to be a distinctive driver for environmental innovators. These differential results are possibly related to the special features of Spain regarding its national innovation system and the degree of stringency of environmental regulation and environmental consciousness of its consumers. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.