Modeling technical progress and total factor productivity: A plant level example

Shifts in the production frontier occur because of changes in technology. A model of how a firm learns to use the new technology, or how it adapts from the first production frontier to the second, is suggested. Two different adaptation paths are embodied in a translog cost function and its attendant cost share equations. The paths are the traditional linear time trend and a learning curve. The model is estimated using establishment level data from a non-regulated industry that underwent a technological shift in the time period covered by the data. The learning curve resulted in more plausible estimates of technical progress and total factor productivity growth patterns. A significant finding is that, at the establishment level, all inputs appear to be substitutes.This paper was processed by N.R. Adam.     

Equal opportunity and poverty reduction: How should aid be allocated?

This paper analyzes a model of aid allocation equalizing the opportunity between recipient countries to reach a common poverty reduction goal. We propose a fair and efficient aid allocation based on a multicriteria principle. The model considers structural handicaps in recipient countries in terms of lack of human capital and economic vulnerability, their initial poverty, and the natural gap between the growth rate required to reach a development goal and the observed one. We show that our proposed aid allocation favors poor and vulnerable countries with our multicriteria principle. It substantially differs from the observed allocation. Analyses also shed light on the impact of the donors' aversion to the low natural growth gap in recipient countries on the optimal aid allocation and the marginal efficiency of aid.     

THE ESTIMATED EFFECT OF CATHOLIC SCHOOLING ON EDUCATIONAL OUTCOMES USING PROPENSITY SCORE MATCHING

This paper examines the effect of attending a Catholic high school on educational outcomes. The statistical analysis is based on data obtained from the US National Educational Longitudinal Study. Using propensity score matching methods to control for selection bias, we find that Catholic schooling improves maths test scores, with stronger effects for males than for females, but appears to have little effect (if any) on reading scores. Catholic schooling also raises high school graduation rates and substantially increases the likelihood of enrolment in a 4‐year college. Use of the difference‐in‐difference method suggests that the effect of Catholic schooling on changes in maths scores is more muted, though still statistically significant.     

Adjustment costs and theory of investment under uncertainty

It is shown that the stochastic investment rule for the price-setting monopolist facing random demand differs from the deterministic rule, due to the presence of the covariance of the marginal utility of profits and the MRTS between capital and labor. For the risk-neutral quantity-setting monopolist, the optimal current investment under random demand is shown to be greater than that under deterministic conditions, given that production technology is of the Cobb-Douglas type with constant returns to scale. When random wages and prices follow first-order autoregressive schemes, the risk-neutral competitive firm's current investment level is shown to be at least equal to that under certainty.     

Identification of the Lorenz curve by Lorenz coefficient

Zusammenfassung Die Identifikation der Lorenzkurve durch Lorenzkoeffizienten. — Der aus der Lorenzkurve abgeleitete Gini-Koeffizient vermittelt einen guten Eindruck von dem Ma\ an Ungleichheit. W?hrend sich jedoch eine Lorenzkurve auf den Gini-Koeffizienten im Verh?ltnis eins zu eins übertragen l?\t, entspricht — in der entgegengesetzten Richtung — ein Gini-Koeffizient mehreren Lorenzkurven. In dieser Untersuchung wird die Lorenzkurve in einzelne Abschnitte aufgeteilt. Dann wird jedem Abschnitt ein gewogener Lorenz-Koeffizient zugeordnet, wodurch es m?glich wird, Lorenzkurven mit identischen Gini-Koeffizienten zu unterscheiden. Die Verbindung zwischen jedem Kurvenpaar kann aufgehoben werden, indem man von Abschnitt zu Abschnitt die jeweiligen Lorenz-Koeffizienten vergleicht. Ein empirisches Beispiel ist in dem Artikel enthalten.

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Résumé L’identification de la courbe de Lorenz par le coefficient de Lorenz. — Le coefficient de Gini dérivé de la courbe de Lorenz exprime un degré considérable de sens intuitif pour la mesure de l’inégalité. La reproduction de la courbe de Lorenz en coefficient de Gini est cependant dans le rapport un à un, celle du coefficient de Gini en courbe de Lorenz un à beaucoup. Cette étude veut partager la courbe de Lorenz en piéces détachées. Un sous-coefficient pondéré de Lorenz est associé avec chaque partie, une méthode qui permet à différencier les courbes de Lorenz avec des coefficients identiques de Gini. Le lien entre chaque paire de courbes peut être détaché si on part d’une comparaison de chaque sous-coefficient de Lorenz de partie à partie. L’auteur fournit une application empirique.

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Resumen Identificación de la curva de Lorenz por medio del coeficiente de Lorenz. — El coeficiente de Gini derivado de la curva de Lorenz transmite sentimientos intuitivos considerables para la medida de desigualdad. Sin embargo, el desdibujamiento de la curva de Lorenz hacia el coeficiente de Gini es uno a uno y el del coeficiente de Gini hacia la curva de Lorenz de uno a muchas veces. En este estudio se divide la curva de Lorenz en partes. Un sub-coeficiente de Lorenz se asocia con cada parte permitiéndonos diferenciar curvas de Lorenz con idénticos coeficientes de Gini. La unión entre cualquier par se puede quebrar procediendo a comparar cada sub-coeficiente de Lorenz de parte en parte. Se presenta una aplicación empírica.

     

Estimating the price deflator for nominal cash balances

A differential money demand equation is used to estimate the weight given to each commodity group in the price index which transforms nominal into real cash balances. The results indicate that food receives the largest weight and that the CPI is a good proxy for the true deflator.     

Rentenversicherung, Bev?lkerungsentwicklung und Kapitalmarktrendite – Eine Simulationsrechnung

How can the pension schemes be sustainably financed? This is an important issue particularly with regard to the demographic changes in many industrialized countries but also in other emerging economies such as China and India. In this paper, we use a macroeconomic model of overlapping generations to analyze the impacts of the demographic changes as well as the interactions between pension system, bond and stock markets. Furthermore, we examine how the pension system influences the distribution of wealth, consumption and saving within generations. We found out that an aging population will cause a drastic decline. Moreover, we examined which impacts on individuals?? welfare demographic changes can have for an existing pay-as-you-go pension scheme. An increase of pension age combined with a decrease of the contributions seems to be the best policy. On the other hand, increases in contributions as a result of demographic changes show the highest welfare losses.     

The market price of fiscal uncertainty

Recent fiscal interventions have raised concerns about US public debt, future distortionary tax pressure, and long-run growth potential. We explore the long-run implications of public financing policies aimed at short-run stabilization when: (i) agents are sensitive to model uncertainty, as in Hansen and Sargent (2007), and (ii) growth is endogenous, as in Romer (1990). We find that countercyclical deficit policies promoting short-run stabilization reduce the price of model uncertainty at the cost of significantly increasing the amount of long-run risk. Ultimately these tax policies depress innovation and long-run growth and may produce welfare losses.     

Overnight public information,order placement,and price discovery during the pre-opening period

This study examines the impact of corporate news announcements released overnight on price discovery during the pre-opening period in the Australian Securities Exchange. Our results suggest that the presence of these announcements increases the efficiency of indicative opening prices and that the intensity of these announcements significantly influences the aggressiveness of pre-opening orders. Using earnings announcements to compare the speed of price adjustments in response to overnight and daytime information of a homogeneous type, we find that prices respond immediately to overnight news upon the commencement of trading, whereas adjustments based on trading-hours news tend not to be instantaneous. Overall, our evidence highlights the important role of the pre-opening period in price discovery and the prospect of further enhancing this role by timing the release of public information to occur during non-trading hours.     

Advertising Benefits from Ethical Artificial Intelligence Algorithmic Purchase Decision Pathways

Journal of Business Ethics - Artificial intelligence (AI) has dramatically changed the way organizations communicate, understand, and interact with their potential consumers. In the context of this...