Using System Dynamics to assess the impact of RFID technology on retail operations

The application of item-level radio frequency identification (RFID) technology in retail supply chains creates cost savings and promises large potential benefits from revenue growth. However, the economic assessment of the impact on improved store operations, labor utilization, and increased sales is still not fully explored. We propose to use System Dynamics as a structural modeling and simulation approach to integrate conventional return on investment evaluations. Building on previous research about RFID technology in retail supply chains, we developed a model based on the case exploration of a leading Italian apparel retailer. Simulations show that RFID implementations are profitable whenever they contribute to increase sales, especially when a fashion retailer is focused on clerk-assisted sales strategies. Sales growth results from the dynamic and integrated impacts of RFID technology on better inventory control, faster inventory turnover, and longer time available for store personnel to assist consumers as an effect of more efficient backroom operations.     

WHAT HAPPENED TO THE KNOWLEDGE ECONOMY? ICT,INTANGIBLE INVESTMENT,AND BRITAIN'S PRODUCTIVITY RECORD REVISITED

Despite the apparent importance of the "knowledge economy," U.K. macroeconomic performance appears unaffected: investment rates are flat, and productivity has slowed. We investigate whether measurement issues might account for this puzzle. The standard National Accounts treatment of most spending on "knowledge" or "intangible" assets is as intermediate consumption. Thus they do not count as either GDP or investment. We ask how treating such spending as investment affects some key macro variables, namely, market sector gross value added (MGVA), business investment, capital and labor shares, growth in labor and total factor productivity (TFP), and capital deepening. We find: (a) MGVA was understated by about 6 percent in 1970 and 13 percent in 2004; (b) instead of the business investment/MGVA ratio falling since 1970 it has been rising; (c) instead of the labor share being flat since 1970 it has been falling; (d) growth in labor productivity and capital deepening has been understated and growth in TFP overstated; and (e) TFP growth has not slowed since 1990 but has been accelerating.     

Requiem for the unit root in per capita real GDP? Additional evidence from historical data

We present new evidence on the uncertain nature of nonstationarity – that is, trend stationarity vs. difference stationarity – of aggregate per capita real output, by submitting to a composite testing procedure a 20-country sample over an historically relevant time span. We find that the degree of uncertainty associated with the presence of a unit root appears to be well exceeding that shown by other studies conducted so far on cross-country historical data. For almost all the countries in our sample, inference appears to be strongly dependent on the type of test one makes use of, so that conclusions reached at early stages of a composite confirmatory testing procedure have to be frequently discarded at subsequent stages. Our reading of these findings points towards rejecting the assumption of temporal homogeneity of per capita GDP time series over long time spans, a prerequisite implicitly assumed in all studies looking for invariant statistical properties like stochastic or deterministic nonstationarity.First version received: October 2002/Final version received: September 2003     

A general framework for collecting and analysing the tracking data of cruise passengers at the destination

Cruise passengers’ behaviour at the destination is a rather poorly investigated phenomenon. The single exit/entry point and the relatively brief visiting time, which characterize cruise passengers’ experience at their destinations, make the use of GPS technology particularly suitable for the analysis of such a relevant phenomenon. The aim of this research is to propose a general framework for collecting and analysing GPS tracking data relating to cruise passengers’ behaviour at their destination. The main prerequisites and research stages for the implementation of surveys on cruise passengers will be described and a set of tools and measures for the analysis of GPS tracking data will be proposed, together with their potential applications. As examples of case studies, two surveys performed in the ports of Palermo and Dubrovnik will be described and the main results of the collated information will be presented. Improving our understanding of the behaviour of cruise passengers at their destination is particularly relevant for the management of tourism destinations, given the challenges that this growing phenomenon is posing for many port destinations in the Mediterranean.     

Schumpeter on unemployment

Joseph Alois Schumpeter’s approach to the phenomenon of unemployment differs strongly from the traditional classification with its strict distinctions between frictional, cyclical and structural unemployment. By relating these three categories to his theory of creative destruction, Schumpeter collapsed them all into one: technological unemployment. In our paper, we provide a systematic overview and discussion of Schumpeter’s varied writings on unemployment, from 1908 to 1954. We compare his view with the positions of some of his contemporaries, such as Wicksell, Hicks, Beveridge and Keynes. Finally, we discuss to what extent recent writers, such as Aghion, Howitt and Caballero, have integrated Schumpeter’s approach into modern macroeconomics.     

Distant but Close in Sight: Firm-level Evidence on French–German Productivity Gaps in Manufacturing

We study productivity-level distributions of manufacturing firms in France and Germany, and how these distributions evolved across the Great Recession. We show the presence of a systematic productivity advantage of German firms over French ones in the decade 2003–2013, but the gap has narrowed down after the Great Recession. Convergence is explained by the better growth performance of French firms in the post-recession period, especially of those located in the top percentiles of the productivity distribution. We also highlight the role of sectoral growth, firm size, and export intensity in explaining the above convergence. In contrast, the contribution of allocative efficiency was small.     

Cournot model of brokered FX trading

This paper develops a Cournot model of rival dealers placing limit orders with a broker, who in turn makes a market by acting as a liaison between dealers. The broker's limit-book lists the various prices and quantities at which dealers are willing to exchange currency vis-à-vis electronic broking. The size and volatility of the inside spread is simulated relative to dealer entry–exit and the price elasticity of linear order arrival functions. Our simulations reveal non-linear price dynamics from dealer participation in market development, with an additional rival narrowing the inside spread by 1.82% while diminishing its volatility. These findings may shed some light on the “excess volatility puzzle” raised by Killeen, Lyons and Moore (forthcoming) as to why price behavior under flexible exchange rate regimes is significantly more volatile than macro fundamentals would suggest.     

FDI determination and corporate tax competition in a volatile world

This paper investigates the impact of economic and political volatility on corporate tax rates on a large dataset of countries over the 1983–2003 period. Estimation of a dynamic tax rate equation supports the hypothesis that economic volatility negatively affects statutory corporate tax rates, while political volatility has no significant effect. In order to identify the channels through which volatility works, we estimate a structural model allowing for simultaneous determination of corporate tax rates and FDI inflows, and find that economic volatility affects the corporate tax setting process through its impact on FDI inflows.     

Exports versus FDI: An Empirical Test

In a recent paper Helpman, Melitz and Yeaple argue firm heterogeneity leads to self-selection in the structure of international commerce. Only the most productive firms find it profitable to meet the higher costs associated with FDI; the next set of firms finds it profitable to serve foreign markets through exporting; while the least productive firms serve only the domestic market. The paper tests this assumption using the concept of stochastic dominance. Robust support is found for the model, the productivity distribution of multinational firms is found to dominate that of export firms, which in turn dominates that of non-exporters. JEL no. D24, F14, F23