The Division of Labor Under Homogeneity: A Critique of Mises and Rothbard

A bstract .   Even the most passionate defenders of free trade, such as Mises and Rothbard, claim that trade cannot occur under conditions of strict homogeneity of land, labor, and capital. We show that specialization, trade, and the division of labor can emerge even when resources are initially homogenous, due to "natural heterogeneity," economies of scale, and learning.     

The power of quality models: The example of the SIQ model for performance excellence

Most contemporary total quality management (TQM) practice is influenced, directly or indirectly, by structured, acontextual and standardized quality models. The present paper focuses on the strategic introduction of one such model, namely the Swedish Institute for Quality (SIQ) model for performance excellence, in a Swedish public-sector organization, which we refer to as ‘the Authority.’ We take our theoretical stance from Foucault's concept of ‘power/knowledge.’ In describing the case, we focus on the management team of one of the Authority's ten regions. Our analysis shows the members of the management team using the SIQ model to objectify both the organization and themselves as managers. However, contrary to many critical or managerial accounts, the SIQ model was not totalizing: management subjectivities changed but were not entirely reconstituted, and some resistance to them was generated by the members of the management team, in their role as professionals.     

Are the choices of people stochastically rational? A stochastic test of the number of revealed preference violations

Revealed preference tests are frequently used to check data on the behavior of agents for consistency with economic theory. Unfortunately these tests lack a stochastic element and thus one violation of revealed preference causes a rejection of the behavior being tested. To remedy this lack of a stochastic element in revealed preference analysis, we suggest a general, simple, and intuitive statistical procedure to test whether the observed number of violations is more consistent with a pre-specified type of non-degenerate behavior than with rational behavior. We illustrate this general procedure with an example using uniform random behavior that allows researchers to test whether the actual number of violations of revealed preference is more consistent with uniform random behavior than rational behavior. This statistical test takes advantage of the fact that nonparametric revealed preference tests involve known prices and expenditures. Our illustrative example is accompanied by some Monte Carlo exercises showing that the uniform test performs very well. We implement our test using datasets from two well-known economic experiments. One is a dataset on altruistic choices from Andreoni and Miller (Econometrica 70:737–753, 2002). The second is a dataset on the choices made by subjects who act within a token economy from Battalio et al. (West Econ J 11:411–428, 1973) and Cox (Econ J 107:1054–1078, 1997). We find that for a majority of subjects in one altruistic behavior sub-experiment uniform random behavior can be rejected in favor of rational behavior at the 10 % level of significance. For all but one subject, living in the token economy, uniform random behavior cannot be rejected. For that one subject in the token experiment uniform random behavior is rejected in favor of perverse economic behavior.     

Party Discipline and Environmental Policy: The Role of “Smoke‐filled Back Rooms”*

We adopt the view that greater party discipline induces legislators to commit to promised policies after being elected. We then develop the hypothesis that the effect of party discipline on the stringency of environmental policy is conditional on the degree of government corruption. Our empirical work suggests that greater party discipline results in more stringent environmental policies when the level of corruption is relatively low, but in weaker policies when the level of corruption is comparatively high.     

Should I Stay or Should I Go? On Relative Deprivation and Migration Dynamics

An overlapping-generations model for rural to urban labor migration is developed. In the migration decision the potential migrants consider both the absolute income gain and the relative deprivation associated with moving to town. It is shown that the relative deprivation mechanism introduces a positive externality between generations of migrants that can generate dual equilibria.     

Continuous‐time models,realized volatilities,and testable distributional implications for daily stock returns

We provide an empirical framework for assessing the distributional properties of daily speculative returns within the context of the continuous‐time jump diffusion models traditionally used in asset pricing finance. Our approach builds directly on recently developed realized variation measures and non‐parametric jump detection statistics constructed from high‐frequency intra‐day data. A sequence of simple‐to‐implement moment‐based tests involving various transformations of the daily returns speak directly to the importance of different distributional features, and may serve as useful diagnostic tools in the specification of empirically more realistic continuous‐time asset pricing models. On applying the tests to the 30 individual stocks in the Dow Jones Industrial Average index, we find that it is important to allow for both time‐varying diffusive volatility, jumps, and leverage effects to satisfactorily describe the daily stock price dynamics. Copyright © 2009 John Wiley & Sons, Ltd.     

Danish flexicurity: preconditions and future prospects

This article argues that Danish flexicurity is preconditioned by craft unionism that has historically been predominant in the Danish trade union movement. It is furthermore argued that flexicurity was on the verge to disappear when it became famous in the early 2000s, although yet not completely dead.     

Do poverty and poor health and nutrition increase the risk of armed conflict onset?

We analyze the effects of improving the economic, food security and health status on the risk of armed cotntectflict onset, focusing on the factors related to the millennium development goals. We employ the discrete-time hazard model that allows us to examine the time-varying effects of socioeconomic factors controlling for the reverse effect of conflict. Our results show that income poverty and poor health and nutritional status are more significantly associated with armed conflict onset than GDP per capita, annual GDP growth, and the ratio of primary commodity exports over GDP. In particular, poor health and nutritional status seems to play a key role in inducing armed conflicts in poor countries. These results indicate that, when a majority of the poor and the malnourished resides in rural areas and depends on agriculture directly or indirectly, investments in public goods for agriculture and rural areas can be effective tools to achieve the multiple goals of reduced poverty, food security and armed conflict, including riots in early 2008 triggered by high food prices. Food policy can be an effective element of efforts to maintain stability.     

Micro evidence on international patenting

Globalization, high growth rates in high-tech industries, growing emerging markets and harmonization of patent institutions across countries have stimulated patenting in foreign markets. We use a simple model of international patenting, where the decision to patent in a foreign country depends on country characteristics and the quality of the patented invention. With access to a detailed database on individual patents owned by small Swedish firms and inventors, we are able to estimate some of these relationships and test their validity. Our results indicate that the propensity to apply for international patent protection increases with indicators of the quality of the invention, technological rivalry and market size in the host market.     

Trade Liberalization and Environmental Taxation in Federal Systems

The literature on trade liberalization and environment has not yet considered federal structures. In this paper, we show how the design of environmental policy in a federal system has implications for the effects of trade reform. Trade liberalization leads to a decline in pollution taxes, regardless of whether pollution taxes are set at the federal (centralized) or local (decentralized) level, and it increases social welfare. The effect under a decentralized system is smaller than if these taxes are set by the federal government, and pollution emissions therefore decline in this case. Moreover, majority bias interacts with trade liberalization if federal taxes are used.