On the first passage time processes of brownian motion with positive drift

Abstract

The first passage time processes of Brownian Motion with positive drift are of considerable importance, particularly in life-testing or life-time situation as a natural consequence. It has been used in sequential analysis, e.g. finding the best test for testing the hypothesis of no drift versus the alternative of positive drift in a Brownian Motion. Various properties of the first passage time process of Brownian Motion with positive drift are reviewed and several new properties are investigated. In short, γ-variation properties, characterization, and behaviour at infinity are discussed.     

HEALTH CARE IN THE UNITED STATES: WHY IS SUPPLY SO PRICE INSENSITIVE?

Health spending as a percentage of gross domestic product in the U.S. economy is growing, from 5% in 1960 to about 16% in the current period, and it is predicted to grow to as much as 30% in 2050. Then why is the supply of health care in the United States so insensitive to steeply rising prices? This paper conducts an econometric study to show that high health‐care costs have an adverse impact on labor productivity, causing a negative production externality in all industries. So, can the rising cost of health‐care affect the U.S. comparative advantage? The paper seeks answers to these questions in a general equilibrium model and finds that the labor productivity shock is responsible for the sluggish or declining supply of health care. Consumers are able to afford less health care due to a possible decline in real wages. U.S. comparative advantage becomes a nonissue, provided that the equilibrium is stable in spite of a negatively sloped health‐care supply curve. Negative externality, leading to market failure, may be addressed in two alternative ways. (JEL F11, I11, I12, I18)     

China’s Experience with Indexed Government Bonds, 1988–1996: How Credible Was the People’s Republic’s Anti-Inflationary Policy?

The People's Republic of China introduced indexed government bonds in the face of the inflation panic of 1988–89 and reintroduced them when inflation surged upward again in 1993. Measures of inflation expectations—as derived from the trading prices of these indexed bonds—suggest that the government gained credibility from its ability to contain inflation in 1989. But the government's failure to quickly halt the 1993–95 inflation led, by late 1994, to soaring inflation expectations and, ultimately, a heavy financial penalty for the government as the 1992 and 1993 bond issues matured while inflation was still high.     

Making EMU Work: Some lessons from the 1990s

This paper investigates what lessons may be learned from Europe's convergence process of the 1990s. The paper challenges the conventional focus on labour market institutions and 'structural rigidities' as the root cause behind Europe's poor employment record. Instead, it is argued that macro demand management played the key role, particularly monetary policy. Concentrating on Germany, the analysis shows that fiscal consolidation was accompanied by monetary tightness of an extraordinary degree and duration. This finding is of interest regarding the past as well as the future. For the Maastricht regime much resembles the one that produced the unsound policy mix of the 1990s: a constrained fiscal authority paired with an independent monetary authority free to impose its will on the overall outcome. The analysis thus highlights a key asymmetry in the Maastricht regime that is likely to continue to inflict a deflationary bias on the system. It is argued that this policy bias may be overcome only if the ECB deliberately assumed its real role of generating domestic demand-led growth, thereby resolving Euroland's key structural problem: asymmetric monetary policy. As regards the conventional structuralist theme, the analysis debunks the 'Dutch myth' of supply-led growth through structural reform. Depicting a popular fallacy of composition, we stress that the peculiar Dutch strategy of demand-led growth does not present itself as an option for Euroland.     

A note on the consistency of maximum likelihood estimators

Abstract

A sequence of maximum likelihood estimators based on a sequence of independent but not necessarily identically distributed random variables is shown to be consistent under certain assumptions. Some examples are given to show that these assumptions are easy to verify and not very restrictive.     

Organizational Innovation Capability: A Driver for Competitive Superiority in Marketing Channels

This paper investigates the interplay between innovation and competitive superiority in the context of channel management by adopting a capabilities view. The relevance for channel marketing and management scholars is that we developed an environment-strategy-value contingency model to address the focal phenomenon. Our empirical results clearly support the key argument that managerial and technological innovations play an essential role in understanding of how competitive superiority is achieved in constantly evolving marketing channels. As such, our contingency factors involved have a significant intermediate role in each of the research contexts examined, indicating that the innovation capability has a channel specific profile.     

Book reviews

Ohne Zusammenfassung     

A production function analysis of English maternity hospitals.

In recent years, a number of attempts have been made to explain the output of hospitals by means of production function analysis and, in this particular study, the authors estimate Cobb-Douglas and log-quadratic functions from data for the 193 English maternity hospitals. Of the various inputs into maternity care, the numbers of beds and nurses appear as the most significant determinants of throughput, although the relative quantities actually employed differ from the “technical” optimum. Returns to scale in the maternity service appear to be, at best, constant. The effects of hospital location and type are also analysed and they suggest the existence of significant disparities in levels of efficiency between different hospitals.     

Employment and child-care choices in Canada and the United States

In this paper we examine employment and child-care choices of two-parent families with young children in the United States and Canada, using a pooled data set based on recent national surveys in each country. We find that the employment and child-care choices of Canadian families are similar to those of U.S. families. Estimates of a model of employment and child-care choices indicate significant effects of child-care subsidies, child-care prices, and wage rates on employment and child-care choices. However, none of these factors helps to explain the differences in employment and child-care choices between the two countries.
Ce mémoire examine le choix de l'emploi et du soin des enfants dans les familles où il y deux parents aux Etats-Unis et au Canada en utilisant des données d'études récentes dans les deux pays. Il appert que les choix des familles canadiennes sont semblables à ceux des familles américaines. Les calibrations d'un modèle de ces choix montrent les effets significatifs des subventions au soin des enfants, du prix des soins des enfants, et des taux de salaires sur ces choix. Cependant, aucun de ces facteurs n'explique les diffrences dans les patterns de choix entre les deux pays.     

Estimating Income and Price Elasticities of Trade in a Cointegration Framework

This paper presents further evidence on the empirical regularity known as the "45-degree rule." Income and price elasticities of trade are estimated for 21 countries in a cointegration framework. More specifically, the autoregressive distributed lag (ARDL) modeling approach and the DOLS procedure are adopted to estimate the long-run structure. The empirical results confirm the existence of a systematic relationship between growth rates and income elasticity estimates: faster growing economies have high income elasticities of demand for their exports but lower import elasticities, which implies that faster growth can be observed without any marked secular trend in real exchange rates.