Trade policy impacts under alternative land market regimes in rural China

In this paper we apply a simulation model of a village economy in Guizhou province, China, to assess impacts of trade reform at the household and the village level under alternative land market regimes. Putting special emphasis on the modeling of household migration a trade reform scenario is simulated with and without the existence of a land rental market in the village.Significant impacts of the land market on the policy outcome regarding household production, income and welfare are found. The possibility to trade land within the village leads to increasing specialization into agriculture and migration among the households as a response to the policy shock. In a situation with a land market, incomes of households which expand agricultural production are less negatively affected by trade reform than incomes of households which migration more.At the village level, a land market does not influence the poverty outcome of the reform but reduces its inequality enhancing impact. Village migration and exports of agricultural outputs increase.     

Avoiding market dominance: product compatibility in markets with network effects

As is well recognized, market dominance is a typical outcome in markets with network effects. A firm with a larger installed base offers a more attractive product which induces more consumers to buy its product which produces a yet bigger installed base advantage. Such a setting is investigated here but with the main difference that firms have the option of making their products compatible. When firms have similar installed bases, they make their products compatible in order to expand the market. Nevertheless, random forces could result in one firm having a bigger installed base, in which case the larger firm may make its product incompatible. We find that strategic pricing tends to prevent the installed base differential from expanding to the point that incompatibility occurs. This pricing dynamic is able to neutralize increasing returns and avoid the emergence of market dominance.     

Inflation ambiguity and the term structure of U.S. Government bonds

Variations in trend inflation are the main driver for variations in the nominal yield curve. According to empirical data, investors observe a set of empirical models that could all have generated the time-series for trend inflation. This set has been large and volatile during the 1970s and early 1980s and small during the 1990s. I show that log utility together with Knightian uncertainty about trend inflation can explain the term premium in U.S. Treasury bonds. The equilibrium has two inflation premiums, an inflation risk premium and a Knightian inflation ambiguity premium.     

The Collaboration of Innovation Intermediaries and Manufacturing Firms in the Markets for Technology

Many manufacturing firms have opened up their product innovation processes and actively transfer knowledge with external partners in the markets for technology. However, the markets for technological knowledge have remained inefficient in comparison with the markets for most products. To reduce some of the market inefficiencies, manufacturing firms may collaborate with innovation intermediaries, which are defined as organizations that act as agents or brokers in the innovation process between two or more parties. These innovation intermediaries comprise different service providers ranging from consulting companies to Internet marketplaces for technology. In light of an increasing importance of intermediary services in the context of open innovation, this paper specifically focuses on the collaboration of manufacturing firms and innovation intermediaries, which may be critical for the success of intermediary services. Based on new interview data from 30 innovation intermediaries and 30 European manufacturing firms, this paper examines the question of how innovation intermediaries and manufacturing firms collaborate concerning the following issues, which emerged as the key themes from the interviews: potential of intermediation, roles of intermediaries, types of intermediation, drivers of intermediation, complementarity of intermediation, compensation of intermediation, and the importance of repeated collaborations. The findings indicate how manufacturing firms may reduce their transaction costs in technology markets by collaborating with intermediaries. However, intermediary services can only be regarded as a complement rather than a substitute of manufacturing firms' internal activities of managing technology transfer. Thus, manufacturing firms need sufficient internal capabilities for managing technology transfer, such as absorptive capacity and desorptive capacity.     

Wie geht es mit dem Brexit weiter?

The UK’s 2016 EU referendum may account for great income losses in the UK. Gabriel Felbermayr et al. use a “new” quantitative trade model to assess various Brexit scenarios. The results broadly show that all EU member states lose, and the relative losses in the UK are about five times those of the average remaining EU country. These findings have important implications for the EU’s negotiation strategy. The outcome depends largely on the decisions about trade relations. Michael Hüther thinks that the UK is heading for an extremely hard Brexit and that it already shows. Therefore, the UK government should work out a consistent industrial policy and make up its mind about its preferences on its future economic relationship with its neighbours. In light of the currently very close and mutually welfare-enhancing business relations between the EU27 and the UK, one of the central tasks and challenges of the Brexit negotiations is undoubtedly the creation of a new supportive post-supranational legal framework governing these economic transactions in the future. Andreas Grimmel argues that the EU’s crises are largely the result of a certain mode of integration that is based on actors’ interests rather than on a comprehensive constitutional framework.