Measuring the impact of R&;D on Productivity from a Econometric Time Series Perspective

In this paper we argue that the standard sequential reduction approach to modelling dynamic relationships may be sub-optimal when long lag lengths are required and especially when the intermediate lags may be less important. A flexible model search approach is adopted using the insights of Bayesian Model probabilities, and new information criteria based on forecasting performance. This approach is facilitated by exploiting Genetic Algorithms. Using data on U.K. and U.S. agriculture the bivariate time series relationship between R&D expenditure and productivity is analysed. Long lags are found in the relationship between R&D expenditures and productivity in the U.K. and in the U.S. which remain undiscovered when using the orthodox approach. This finding is of particular importance in the debate on the optimal level of public R&D funding.JEL Classification: C22, C51, Q16     

List price and sales prices of residential properties during booms and busts

This paper investigates the relationship between the list and sale price of residential properties over the housing cycle. In down or normal markets the list price generally exceeds the sales price; however, when the housing market is strong, homes sell for more than their list price. This observation is not consistent with the assumptions made in the standard model of home sellers’ search behavior. We consider alternative models. In one, sellers set list prices based on their expectations of future changes in sales prices and the arrival rate of buyers; however, demand shocks occur. This model partially explains our data from the Belfast, U.K. housing market, but it fails to predict the list to sales price ratio during a sustained housing boom. We next describe a model where sellers’ endogenously select their search mechanism depending on the strength of the housing market. We find support for the conjecture that sellers switch to an auction-like model during housing booms. There also is evidence that during a downturn in the market, sellers’ list prices are sticky.     

Addressing the Growing Inadequacies of the <Emphasis Type="Italic">Ellerth</Emphasis>/<Emphasis Type="Italic">Faragher</Emphasis> Affirmative Defense: Fashioning a Sensible and Feasible Solution

Public policy seeks an equitable balance between the rights and duties of both employers and employees in creating a workplace free of sexual harassment. This goal is particularly difficult to achieve when supervisors create a hostile work environment. The U.S. Supreme Courts decisions in Ellerth and Faragher created an affirmative defense against vicarious liability for employers, but subsequent applications of these rulings have been inconsistent and problematic. Courts and legislators need to (1) choose the appropriate standard of employer liability for sexual harassment committed by supervisors, and (2) decide what, if any, defenses are available to employers when employees bring claims of sexual harassment. We conclude that holding employers strictly liable while allowing for the limitation of damages based on avoidable consequences, as recently adopted by the California Supreme Court in McGinnis, is preferable to other liability standards and defenses.