Monetary aspects of Walras's law and the stock-flow problem

Walras's Law is a tautology. It illuminates interrelations among supplies and demands for goods, services, securities, and money and among their supply/demand imbalances. The Law emphasizes that no one thing or group of things can be in excess supply or excess demand by itself. It thereby helps focus attention on the role in macroeconomic disorder, especially in depression, of a distinctively functioning object of market exchange—money. Yet complications arise, and Walras's Law has itself sometimes been called into question. The purpose of this paper is to clarify the very concepts that enter into the Law and into supposed difficulties. Distinctions between "notional" and "effective" supplies and demands and between stock and flow conceptions of quantities and imbalances require attention.     

A COMPARISON OF SOME SHORT-CUT METHODS OF ESTIMATING REAL PRODUCT PER CAPITA

Several recent studies of short-cut estimates comparing real income (on a purchasing power basis) of countries are reviewed, including methods comparing real income based on indicators, like electricity consumption. New estimates are presented for 101 countries which had a tradition of conventional national income estimates in 1965, and for 40 countries without extended national income series. One conclusion from the empircial analysis was that until there exist a large number of countries for which purchasing power estimates of real income are available, it is difficult to discriminate between alternative short-cut methods using indicators, and difficult to estimate real per capita incomes of low income countries without substantial errors of estimate. The paper advocates more purchasing power estimates, and institutionalizing the collection of international prices of specified items so that abbreviated market baskets can be readily compared across countries.     

Virtual companies reconsidered

An important recent report recommends the creation of 'rirtual companies'-companies formed from electronically linked workers who rfmain employees o f their regular firms . This paper criticizes that model, instead suggesting that uirtual companies have their o m employees. The assessment of the implications of both ppes of virtual compay points to the need for majar national poliy changes with respect to employment practices and mechanisms to conty wealth to people.     

Time Irreversibility in Consumers’ Expenditure: An Analysis of Disaggregated Data

The literature on testing for the presence of cyclical asymmetry in consumers’ expenditure is extended via the application of tests for time irreversibility to UK data subject to a higher degree of disaggregation than considered in previous studies. The empirical findings reported provide support for a positive relationship between the durability of goods and the asymmetric, and specifically time irreversible, behaviour they exhibit at a fine level of disaggregation. Further investigation of the underlying causes of such time irreversibility exhibit pronounced difference according to the degree of durability, in that nonlinearity in the underlying data generating process is a prevalent feature of highly disaggregated durable good expenditures, but is a less marked feature of semi‐durable and non‐durable expenditures. Prominent among the durable and semi‐durable good expenditure categories exhibiting such nonlinearities are expenditures relating to housing fittings and communication equipment. These findings are consistent with threshold effects in inventory control as well as the effects of credit rationing, such that these expenditures are more likely to be made at times when those constraints are eased by income windfalls or by the easing of credit availability, possibly associated with mortgage (re‐) financing.     

Chinese science and technology — Structure and infrastructure

This paper identifies and analyzes the science and technology core competencies of China, based on a sampling of approximately half of the total Chinese publication output in the Science Citation Index/ Social Science Citation Index (SCI/SSCI) [SCI. Certain data included herein are derived from the Science Citation Index/Social Science Citation Index prepared by the Thomson Scientific®, Inc. (Thomson®), Philadelphia, Pennsylvania, USA: © Copyright Thomson Scientific® 2006. All rights reserved. [1]] for 2005. Aggregate China publication and citation bibliometrics were obtained and a hierarchical research taxonomy, based on document clustering, was generated. Additionally, bibliometrics and thematic trends were tracked over the past two decades.The key findings were that China's output of research articles has significantly expanded in the last decade. In terms of sheer numbers of research articles, especially in cuting-edge technologies, such as nanotechnology and energetic materials, it is among the leaders. Compared to the USA, the bulk of China's articles focus on the physical and engineering sciences, while the USA articles (compared to China) focus on medical, social, and psychological sciences.     

Identification and classification of problems associated with evaluating social marketing efforts

The social, cultural, and economic climate of the 1980's present real pressure on social program administrators to evaluate their marketing efforts. Evaluation of social programs presents an array of problems or obstacles about which the social marketer must be aware. This paper identifies and categorizes these problems within a meaningful framework. The typology presented classifies social marketing program evaluation problems as being conceptual, macro- and micropolitical, and methodological. An understanding of the nature of these problems should assist the social marketer in overcoming their effects.     

The Borrower's Perceived Risk in Mortgage Choice

We investigate how borrowers perceive the risk in the adjustable rate mortgage (ARM) versus fixed rate mortgage (FRM) choice. We develop a mortgage choice model where the coefficient on the long‐term bond risk premium is conditional on the borrower's perceived risk. We show that the perceived risk fluctuates over time according to the short‐term interest rate level and housing market conditions. We find that when the short‐term rate level is high (low), the borrowers perceive low (high) risk of a short‐term rate rise, thus opting for ARMs (FRMs). Also, during a down housing market they become more risk‐averse perceiving higher risk in choosing ARMs. The perceived risk level alters the borrowers’ sensitivity to the long‐term bond risk premium.     

Interest rate trees: extensions and applications

This paper provides extensions to existing procedures for representing one-factor no-arbitrage models of the short rate in the form of a tree. It allows a wide range of drift functions for the short rate to be used in conjunction with a wide range of volatility assumptions. It shows that, if the market price of risk is a function only of the short rate and time, a single tree with two sets of probabilities on branches can be used to represent rate moves in both the real-world and risk-neutral world. Examples are given to illustrate how the extensions can provide modelling flexibility when interest rates are negative.     

Efficient frontier estimation: a maximum entropy approach

An alternative efficiency estimation approach is developed utilizing generalized maximum entropy (GME). GME combines the strengths of both SFA and DEA, allowing for the estimation of a frontier that is stochastic, without making an ad hoc assumption about the distribution of the efficiency component. GME results approach SFA results as the one-sided inefficiency bounds used by GME shrink. Results similar to DEA are achieved as the bounds increase. The GME results are distributed like DEA, but yield virtually the same rankings as SFA. The results suggest that GME may provide a link between various estimators of efficiency.