Human capital and measurable dynamic gains from economic integration: An application to the economic integration of North and South America

The paper looks at the source of dynamic gains to trade liberalization using a two-country model with both physical and human capital accumulation. The model is calibrated and used to examine the effect of the economic integration of Canada and the United States with Latin America. The analysis assumes that differences in productivity levels between regions are due entirely to differences in human and physical capital endowments. Key assumptions are that capital is internationally mobile and human capital formation is income constrained. The simulated impact of moving to a hemispheric free trade area is significant. The long-run impacts are also different from the short-run efficiency effect predicted by conventional static triangle-rectangle analysis. The long-runmultiplier effect on static output gains are on the order of 2.0 to 2.5 for the South—that is long-run output gains are 2.0 to 2.5 times predicted short-run static gains. In the case of the North, static predictions of gain are ambiguous in sign over the longer run; in some cases there are small dynamic gains-in others. small losses. Investment diversion toward Latin America is a prominent characteristic of the results.     

Stock price clustering and discreteness

Stock prices cluster on round fractions. Clustering increaseswith price level and volatility. and decreases with capitalizationand transaction frequency. Clustering is pervasive. Price clusteringwill occur if traders use discrete price sets to simplify theirnegotiations. Exchange regulations require that most stocksbe traded on eighths. Clustering on larger fractions will occurif traders choose to use discrete price sets based on quarters,halves, or whole numbers. An econometric model of clusteringis derived and estimated. Projections from the result suggestthat traders would frequently use odd sixteenths when tradinglow-price stocks, if exchange regulations permitted tradingon sixteenths.     

CO-OPERATION AND AGRI-BUSINESS EVOLUTION

Co-operatives in North America, developed to correct or off set real or imagined wrongs in the economic system within which agriculture over time became further involved, have remained largely rural. Where successful, co-operatives bridged the gap between a fundamentalist agricultural production industry that tended to look inwards to itself and a privately capitalised marketing industry that looked outwards towards metropolitan and overseas markets. In pioneer and pioneering environments where free enterprise agri-business became significantly involved in on-farm or on-ranch operations, co-operatives did not become im-portant as the services and attitudes of agri-business complemented rather than exploited the man on the land. In the more commercialised integrated agriculture of today, corporate agri-business has found an interest in greater involvement in farm operations: much of this comes from changes in technology that make off-farm purchases as important a component of the agricultural com-plex as off-farm sales of products. Thus, co-operatives have lost their unique “bridge” role, have problems themselves of identity and of their most desirable patterns of future development. But their competition-existing corporate agri-business and new entrants from the conglom-erate industrial giants-are not without their problems also. These are outlined as well as the issues co-operatives-and co-operative philosophers and promoters-must tackle if they are to remain successful market participants and have identifiable characteristics that reflect co- operative idealism. The unique member-client relationship the co-operative is based on should be exploited to maintain and expand these complementary and essential goals for continued farmers’business participation in the North American and world economies.     

The creation of momentum for change through the process of strategic issue diagnosis

This paper presents a model of how decision-makers interpret stategic issues. The model of strategic issue diagnosis identifies three critical events: activation, assessments of urgency and assessments of feasibility. The relationship of each of these interpretive assessments to the creation of momentum for change allows one to predict if and how organizations will respond to a changed decision environment. The paper further links strategic issue diagnosis to organizational responses by highlighting the systematic effect of two contextual variables—the organization's belief structure and its resources—upon the assessments in diagnosis. In this way, the model of issue diagnosis provides a framework for understanding how and why organizations respond differently to strategic issues.     

Reliability of risk management: Market insurance,self-insurance and self-protection reconsidered

This paper examines the three main tools of risk management in a setting where reliability cannot be guaranteed. Thus, for example, insurers might be insolvent, sprinkler systems might be inoperative and alarm systems might be faulty. These types of nonreliability are shown to have significant consequences for risk management. In particular, the relationships between increased risk aversion and the use of the various risk management tools do not carry over from models with full reliability. Moreover, the well-known result of Ehrlich and Becker, that market insurance and selfinsurance are substitutes, is shown to fail in the presence of nonreliability risk.     

A characterisation of the perfect equilibria of infinite horizon games

This paper builds on the work of Fudenberg and Levine (J. Econ. Theory31 (1983), 251–268). It shows that the perfect equilibria of any game in which events become uniformly unimportant as their distance into the future increases can be characterised as limits of sequences of perfect approximate equilibrium points of finite horizon approximations to the game. The result holds both for a strong and for a weak topology. The topologies are tractable, and the nature of convergence relative to them is transparent. Finally, the weak topology is probably the weakest tractable topology in which the result holds.     

Managerial utility-maximizing operating decisions under compound demand risk

This paper examines the demand and cost conditions under which utility maximizing pricing-risk and advertising-risk relationships are determinate. The structure of the firm's demand uncertainty captures both uncertain customer arrivals and uncertain individual customer demand. In addition to standard demand restrictions and constant marginal cost, determinate results depend upon the degree of managerial risk-aversion, the correlation between individual demand and customer arrival disturbances, the firm's cost fixity, and bounded product differentiation effects of advertising. The symmetry between price-cuts and advertising as demand-increasing costs is extensively examined; firm equilibrium requires that price-cuts not be an inferior input for increasing demand.     

A Descriptive Analysis of the AREUEA Members: 1978

A survey of AREUEA members reveals that the association is a diverse professional organization composed of individuals from academia, the government and the real estate industry. This paper presents the data obtained from this survey and identifies the membership by type of employment, teaching and research interests, other professional affiliations and professional designations.