Dynamic Costs of the Draft

Abstract. We propose a dynamic general‐equilibrium model with human capital accumulation to evaluate the economic consequences of compulsory services (such as military draft or social work). Our analysis identifies a so far ignored dynamic cost arising from distortions in time allocation over the life cycle. We provide conservative estimates for the excess burden that arises when the government relies on forced labor rather than on income taxation to finance public expenditures. Our results suggest that eliminating the draft could produce considerable dynamic gains, both in terms of GDP and lifetime utility.     

Ranking efficiency units in DEA using bootstrapping an applied analysis for Slovenian farm data

This article explores how data envelopment analysis (DEA), along with a smoothed bootstrap method, can be used in applied analysis to obtain more reliable efficiency rankings for farms. The main focus is the smoothed homogeneous bootstrap procedure introduced by Simar and Wilson (1998) to implement statistical inference for the original efficiency point estimates. Two main model specifications, constant and variable returns to scale, are investigated along with various choices regarding data aggregation. The coefficient of separation (CoS), a statistic that indicates the degree of statistical differentiation within the sample, is used to demonstrate the findings. The CoS suggests a substantive dependency of the results on the methodology and assumptions employed. Accordingly, some observations are made on how to conduct DEA in order to get more reliable efficiency rankings, depending on the purpose for which they are to be used. In addition, attention is drawn to the ability of the SLICE MODEL, implemented in GAMS, to enable researchers to overcome the computational burdens of conducting DEA (with bootstrapping).     

TRADING OF NASDAQ STOCKS ON THE CHICAGO STOCK EXCHANGE

We use a linear programming model to form two portfolios with approximately equal levels of attributes such as financial leverage. One portfolio comprises stocks that trade exclusively on NASDAQ and the other, stocks that trade on both the Chicago Stock Exchange (CSE) and NASDAQ (CSE/NASDAQ). We find that spreads are lower for the CSE/NASDAQ portfolio, but so is the percentage of quotes at spreads of $0.125. In fact, the lower spreads observed for the CSE/NASDAQ portfolio arise from fewer quotes with spreads of more than $0.25.     

THE MEASUREMENT OF CHANGES IN QUALITY

This paper is concerned with the theoretical problems of devising indexes of quality change and with some of the practical problems of constructing such indexes from market data, relating these to the various attempts to construct such indexes in the past. The general conclusion is that, while quality is inherently ordinal, there are three different indexes which might be taken as "measures" of quality change. If changes are sufficiently small, the values of all three indexes will coincide and then, only, can we consider any one of them to be an unambiguous measure of the change.     

Farmers’ Willingness to Pay for a Tuberculosis Cattle Vaccine

We use contingent valuation (CV) and choice experiment (CE) methods to assess cattle farmers’ attitudes to and willingness to pay (WTP) for a bovine tuberculosis (bTB) cattle vaccine, to help inform vaccine development and policy. A survey questionnaire was administered by means of telephone interviews to a stratified sample of 300 cattle farmers in annually bTB‐tested areas in England and Wales. Farmers felt that bTB was a major risk for the cattle industry and that there was a high risk of their cattle getting the disease. The CE estimate produced a mean WTP of £35 per animal per single dose for a vaccine that is 90% effective at reducing the risk of a bTB breakdown and an estimated £55 for such a vaccine backed by 100% insurance of loss if a breakdown should occur. The CV estimate produced a mean WTP of nearly £17 per dose/per animal/per year for a vaccine (including 100% insurance) which, given the average lifespan of cattle, is comparable to the CE estimate. These WTP estimates are substantially higher than the expected cost of a vaccine which suggests that farmers in high risk bTB ‘hotspot’ areas perceive a substantial net benefit from buying the vaccine.     

Asian Management Research: Status Today and Future Outlook

abstract    This paper reviews the existing management research on Asia. The findings highlight that Asian management research not only builds the understanding of Asia, but also makes a critical contribution to the broad domain of management studies. In particular, Asian-focused research allows researchers to extend and revise theories through the consideration of new contextual variables. This enables researchers to fine-tune theories by developing context-specific conditions and operationalization of key constructs, which in turn allows researchers to develop new theories and constructs which are generalizable to research in other contexts. This systematic examination will help to lay the foundation for the further expansion of the understanding of both Asia and of management research in general.     

Using meta‐analytic structural equation modeling to advance strategic management research: Guidelines and an empirical illustration via the strategic leadership‐performance relationship

This paper demonstrates how meta‐analysis can be combined with structural equation modeling (MASEM) to address new questions in strategic management research. We review this integration, describe its implementation, and compare findings from bivariate meta‐analyses, a direct‐effect structural equations model, and two mediating frameworks using data on the strategic leadership and performance relationship. Results drawn from 208 articles that collectively included data on 495,638 observations demonstrate the new insights available from MASEM while also suggesting a revision to conventional thinking on strategic leadership. Whereas some theories posit that boards of directors influence firm performance through monitoring and disciplining the top management team, MASEM provides more support for the view that boards mediate the top management teams' decisions. Implications for applying MASEM in strategic management are offered. Copyright © 2014 John Wiley & Sons, Ltd.     

Chinese economy in the new era

The “new era”, a term introduced by President Xi Jinping, may also be identified as the Xi era, during which China will be transformed from a moderately well‐off to a strong and wealthy nation. In the new era, the Chinese Government will deepen economic reform, widen economic opening and enhance the quality of economic growth. / Our projections show that by 2020, Chinese real GDP per capita, in 2017 prices, will exceed US$10,000, an economic development milestone. By 2031, Chinese real GDP will surpass US real GDP (US$29.4 trillion vs US$29.3 trillion), making China the largest economy in the world. However, Chinese real GDP per capita will still lag behind the US significantly, amounting to only one‐quarter of that of the United States. By 2050, Chinese real GDP will reach US$82.6 trillion, compared to US$51.4 trillion for the United States. However, in terms of real GDP per capita, China will still lag significantly behind, at US$53,000, slightly less than the current level of US real GDP per capita, compared to US$134,000 for the United States.     

Is there a role for uncertainty in forecasting output growth in OECD countries? Evidence from a time-varying parameter-panel vector autoregressive model

This paper uses a time-varying parameter-panel vector autoregressive (TVP-PVAR) model to analyze the role played by domestic and US news-based measures of uncertainty in forecasting the growth of industrial production of 12 Organisation for Economic Co-operation and Development (OECD) countries. Based on a monthly out-of-sample period of 2009:06 to 2017:05, given an in-sample of 2003:03 to 2009:05, there are only 46% of cases where domestic uncertainty can improve the forecast of output growth relative to a baseline monetary TVP-PVAR model, which includes inflation, interest rate and nominal exchange rate growth, besides output growth. Moreover, including US uncertainty does not necessarily improve the forecasting performance of output growth from the TVP-PVAR model which includes only the domestic uncertainty along with the baseline variables. So, in general, while uncertainty is important in predicting the future path of output growth in the 12 advanced economies considered, a forecaster can do better in majority of the instances by just considering the information from standard macroeconomic variables.