A Reply to the Comments: The Millennium Survey Again

Professor Frederic L. Pryor responds to his critics, Professors Patrick McGuire, Joan Huber, Paul M. Hirsch, Jonathon Mote, David Jaffee, Arthur L. Stinchcombe, Dennis Wrong, Judith Treas, Patrick Baert, Olav Velthuis, and John B. Davis. These comments are in The American Journal of Economics and Sociology, this issue, pp. 35-78.     

Securing small farmer participation in supermarket supply chains in South Africa

Urbanisation and a growing middle class with changing consumption patterns provide an ideal setting for supermarkets to prosper. With South Africa's urban population approaching 60 per cent, supermarket retail chains are now important players in the agro-food sector. Over the last two decades they have begun to purchase produce from in-house sourcing companies who buy mainly from large-scale farmers. Together with the strict requirements of the retail groups, this makes it difficult for small-scale farmers to supply these retailers. This paper highlights the market changes that could continue to exclude small producers from mass consumer markets. It uses a case study to show how small farmers can be integrated into the urban retail market and, using evidence from this study, proposes a number of strategies to help them participate in the mainstream agro-food supply chains and an innovative model for including them while maintaining profitable business operations.     

Heterogeneous effects of competitiveness shocks on macroeconomic performance across euro area countries

This paper considers how competitiveness impacts macroeconomic performance in 11 euro area countries. VAR models are estimated for the individual countries using quarterly data from 1995Q4 to 2013Q4. Besides unit labour costs as a competitiveness measure, the models include GDP, the current account balance and domestic credit. The empirical analyses show that changes in unit labour costs help explain GDP dynamics in the short and medium term in most countries, whereas they have little explanatory power for the current account balance or domestic credit for most countries. Overall, the effects of the unit labour costs vary substantially across the countries in the euro area. The heterogeneity suggests that policy measures aiming to improve economic growth, correct current account imbalances and ensure financial stability need to take country‐specific features into account.     

货币政策方略：来自金融危机的教训

直至2007年8月．货币经济学理论和实证研究上的进展已经使经济学家和政策制定者认定当前存在着一门明晰的“货币政策科学”。中央银行就货币政策方略的绝大部分要素达成了一致,同时货币政策被认为在OECD国家取得了巨大成功：后者不仅保持着低通膨,而且通胀波动率也很低。此外,这些国家的产出波动率也下降了,而自20世纪80年代初以来的时期更被冠以“大缓和（Great Moderation）”的称号。货币经济学家和中央银行家都自我感觉相当良好。     

Transmission of the financial and sovereign debt crises to the EMU: Stock prices,CDS spreads and exchange rates

This paper tests for the transmission of the 2007–2010 financial and sovereign debt crises to fifteen EMU countries. We use daily data from 2003 to 2010 on country financial and non-financial stock market indexes to analyze the stock market returns for three country groups within EMU: North, South and Small. The following results hold for both the North and South European countries, while the smallest countries seem to be relatively isolated from international events. First, we find strong evidence of crisis transmission to European non-financials from US non-financials, but not for financials. Second, in order to test how the sovereign debt crisis affects stock market developments we split the crisis in pre- and post-Lehman sub periods. Results show that financials become significantly more dependent on changes in the difference between the Greek and German CDS spreads after Lehman’s collapse, compared to the pre-Lehman sub period. However, this increase is much smaller for non-financials. Third, before the crisis euro appreciations coincide with European stock market decreases, whereas this relationship reverses during the crisis. Finally, this reversal seems to be triggered by Lehman’s collapse.     

Theory creation and the methodological foundation of Post Keynesian economics

For the last 15 years there have been extensive discussionsabout the foundations of Post Keynesian economics. From thesediscussions, Post Keynesians have reached the consensus thattheir economics is based on a philosophical foundation of realismand critical realism. However, the methodological foundationof Post Keynesian economics, which refers to the methodologicalguidelines used for creating and developing theory, has receivedrelatively less discussion and development. The aim of thispaper is to stimulate discussion in this area by advocatingthat the method of grounded theory is consistent with criticalrealism and is a better and more developed set of guidelinesfor theory creation than the currently accepted alternatives.     

An integrated view of tests of rationality,market efficiency and the short-run neutrality of monetary policy

This paper analyzes an important class of models in which expectations play an important role. Topics included in the analysis are tests of: (1) rationality of forecasts in either market or survey data, (2) capital market efficiency, (3) the short-run neutrality of monetary policy and, (4) Granger causality in macroeconometric models. The common elements of these tests are highlighted. In particular, cross-equation tests for rationality or the short-run neutrality of money are shown to be equivalent to more common regression tests in the literature. These results demonstrate that the exact specification of the relevant information set used in rational forecasts is not necessary for the cross-equation tests to have desirable asymptotic properties. Also discussed are the conditions for identification of coefficients and testability of hypotheses.     

The Impact on Interest Rates of Unemployment Announcements and Their Revisions

The announced changes in monthly employment reports and in weekly new unemployment claim reports are based on new levels and on revisions to previous levels. We analyze the effect on interest rates of surprises to these two separate components of the changes. We find that for weekly reports the effect on interest rates of the new level is greater than the effect of the revisions. For monthly employment reports, the two components’ effects have similar strength.     

Capability-based governance patterns over the product life-cycle: an agent-based model

In recent literature, there is disagreement over the temporal pattern of vertical governance of firms over the product life-cycle. We use a novel neo-Schumpeterian agent-based simulation model to investigate emerging patterns of vertical governance for different levels of imitability and substitutability of capabilities. We find that, in the mature phase of the product life-cycle, firms generally prefer vertical specialization. However, in the early phase, imitability and substitutability, in interplay, determine the governance form preferred. High imitability frustrates appropriation and thereby discourages integration for synergistic advantages. However, firms need not vertically specialize: under low substitutability, incompatibilities reduce the advantages of specialization. When both substitutability and imitability are low, firms can appropriate the value of their inventions and there is no combinatorial advantage of specialization, so firms predominantly integrate. If substitutability is high and imitability is low, the combinatorial advantage of specialization balances with the synergistic advantage of integration.