GROWTH,COMMODITY PRICES,INFLATION AND THE DISTRIBUTION OF INCOME

A primary commodity price boom is underway. Given the role of internationally traded primary commodities as inputs into the productive process in the industrialized world, an important question arises: namely what effects will this price‐boom exert upon wage and price inflation in industrialized countries? In order to address this question, we specify and estimate a system of equations in which the key dependent variables are world commodity prices, the domestic inflation rate for finished goods and the rate of domestic industrial wage inflation. This model is estimated against data for each of three major industrialized countries: Japan, the UK and the USA and the implications of the results thus obtained are explored.     

SMOOTH QUANTILE‐BASED MODELING OF BRAND SALES,PRICE AND PROMOTIONAL EFFECTS FROM RETAIL SCANNER PANELS

Semiparametric quantile regression is employed to flexibly estimate sales response for frequently purchased consumer goods. Using retail store‐level data, we compare the performance of models with and without monotonic smoothing for fit and prediction accuracy. We find that (a) flexible models with monotonicity constraints imposed on price effects dominate both in‐sample and out‐of‐sample comparisons while being robust even at the boundaries of the price distribution when data is sparse; (b) quantile‐based confidence intervals are much more accurate compared to least‐squares‐based intervals; (c) specifications reflecting that managers may not have exact knowledge about future competitive pricing perform extremely well. Copyright © 2013 John Wiley & Sons, Ltd.     

Optimizing the Life-Cycle Path of Pension Premium Payments and the Pension Ambition in the Netherlands

De Economist - We determine the optimal life-cycle path of pension premiums during the working ages and pension benefits during retirement, assuming that households can choose these freely. We...     

Wage convergence and trade

We examine differences in wage rates across countries for workers employed in the same industry, distinguishing workers in the low, medium and high‐skill groups. These differences are large and show persistence over time. We ask, nonetheless, whether there is evidence of convergence, much as is done in studies of convergence in per capita income across countries. With our focus on the micro level, we expect convergence to reflect, at least in part, the degree of integration of a country or industry into the world economy and examine particularly the role of market integration and trade. Our results show strong evidence of convergence in a diverse sample of 39 countries, which includes most large economies whether rich or poor. The estimated convergence rate over the period from 1995 to 2008 is about 4% per year for workers in all skill groups, higher in the more integrated economies of the EU than in other economies without such open borders and lower in industries supplying services rather than manufactures. Also, we find evidence that the rate of growth of domestic output impacts positively on the growth of wages in an industry, providing a source for ongoing deviations from the convergence prediction.     

Sawmill production in the interior of British Columbia: A stochastic ray frontier approach

We examined the productive efficiency of the interior sawmilling industry in British Columbia using stochastic frontier analysis. Prior sawmilling studies using this method have neglected the multi-output nature of sawmills. To accommodate both lumber and chips as outputs, we used a ray production function and adopted it into the stochastic frontier framework. A translog functional form was specified with three inputs (i.e., capital, labour, and roundwood) and applied to five years (2003–2007) of mill specific production data. The ray production function is flexible allowing factor productivity to vary with the output mix. Results indicated the presence of both economies of scale and technical inefficiency. This suggested that a long-run equilibrium had not yet been reached during this time and might explain recent restructuring occurring in this region.     

Fresenius AG: High-speed Globalization

At first glance, Fresenius' emergence as the global leader in renal care is a classic consolidation story: price pressure on products, a changing regulatory environment, and the advent of truly global competition. Under these conditions, there are first mover advantages to building scale and bringing costs down, and Fresenius was very quick off the mark. The Fresenius tale has two special twists. First, the firm made a major move into services to speed up consolidation in the product sector; and, second, it transformed from a command and control bureaucracy to an entrepreneurial, profit-oriented business structure. These strategic and organizational innovations have changed the character of the industry and enabled very rapid globalization. Broader research suggests that other high-speed globalizers too need to simultaneously adapt strategy and organization to changing competitive conditions.