Learning-by-doing versus Schooling in a Model of Endogenous Growth

A two sector model of learning-by-doing measured by means of production aggregated over time and of human capital accumulation in a schooling sector is presented. Time utilization is rival between schooling and learning-by-doing. Depending on the sum of elasticities of the accumulated factors (i.e., of production experience and educational human capital) in both sectors, a situation with or without endogenous growth results. Dynamic optimization of the choice between leisure and working and of the division of human capital between education and production is executed. Transitional dynamics are analyzed for a Cobb-Douglas example and a numerical simulation is performed.JEL classification: C61, D90, O41.Acknowledgements The author would like to thank Eric C. Meyer and two anonymous referees for helpful comments. The usual caveats apply.revised version received November 23, 2003     

Asset price volatility and trading volume with rational beliefs

Summary. This paper develops a model of speculative trading in a large economy with a continuum of investors. In our model the investors are assumed to have diverse beliefs which are rational in the sense of being compatible with observed data. We demonstrate the existence of price amplification effects and show that the equilibrium prices can be higher or lower than the rational expectation equilibrium price. It is also shown that trading volume is positively related to the directions of price changes. Moreover, we study how asset price volatility and trading volume are influenced by belief structures, short selling constraints and the amount of fund available for investment.Received: 23 January 2003, Revised: 30 April 2003, JEL Classification Numbers: D84, G12.We are grateful to Professors Mordecai Kurz, Kenneth Arrow, Kenneth Judd, Carsten Nielsen, Maurizio Motolese, Mark Garmaise, Jean-Michel Grandmont, Peter Hammond, Karl Shell, Jan Werner and participants of the Society for the Advancement of Economic Theory (SAET) Conference and Stanford Institute of Theoretical Economics (SITE) Conference for many helpful suggestions. Correspondence to: H.-M. Wu     

Non-convex Technologies and Cost Functions: Definitions,Duality and Nonparametric Tests of Convexity

This contribution is the first systematic attempt to develop a series of nonparametric, deterministic technologies and cost functions without maintaining convexity. Specifically, we introduce returns to scale assumptions into an existing non-convex technology and, dual to these technologies, define non-convex cost functions that are never lower than their convex counterparts. Both non-convex technologies and cost functions (total, ray-average and marginal) are characterized by closed form expressions. Furthermore, a local duality result is established between a local cost function and the input distance function. Finally, nonparametric goodness-of-fit tests for convexity are developed as a first step towards making it a statistically testable hypothesis. An erratum to this article is available at .     

Two new proofs of Afriat’s theorem

Summary. We provide two new, simple proofs of Afriats celebrated theorem stating that a finite set of price-quantity observations is consistent with utility maximization if, and only if, the observations satisfy a variation of the Strong Axiom of Revealed Preference known as the Generalized Axiom of Revealed PreferenceReceived: 12 June 2003, Revised: 9 October 2003, JEL Classification Numbers: D11, C60.Correspondence to: A. Fostel     

Arrow's equivalency theorem in a model with neoclassical firms

Summary. In this paper we consider a two-period general equilibrium model with uncertainty and real assets as financial instruments. The novelty of the analysis is that real assets are the stocks of neoclassical firms, so that both returns and yields depend on anticipated spot goods prices (and, of course, the yield matrix may change rank with prices). Assuming that financial markets are potentially complete, we establish generic existence of financial equilibrium and prove that there exists a dense set of economies such that financial equilibria are efficient.Received: 19 April 2001, Revised: 23 April 2003, JEL Classification Numbers: C60, D51, G10, D60.I am extremely grateful to Dave Cass for drawing my attention to this problem and inspiring me to work on it as well as for many stimulating discussions. I also benefited from discussions with H. Polemarchakis, M. Stinchcombe, and A. Villanacci. I am thankful to the anonymous referee of the first versions of the paper for thoughtful comments and suggestions, and to participants of a recruiting seminar at the University of Texas at Austin (January 2001), the Conference on Economic Design SED 2000, Istanbul, Turkey (June 2000), and Inter-University Student Conference, New York University, New York (May 2000).     

Cost information sharing with uncertainty averse firms

Summary. A homogeneous Cournot duopoly with asymmetric information is analyzed. Every firm learns its own marginal cost parameter, but not the marginal cost parameter of the opponent. Every firm can commit to revealing its private information to the other firm, i.e. to share information. The influence of uncertainty aversion on the readiness of the duopolists to share cost information is analyzed. Uncertainty aversion is modeled according to the Choquet utility theory. It is shown that low uncertainty aversion leads the firms to share information, while high uncertainty aversion leads the firms not to share. A simple economic explanation for this result is given.Received: 5 January 2001, Revised: 7 May 2003, JEL Classification Numbers: D43, D81, D82.I wish to thank Jürgen Eichberger, Volker Krätschmer, Willy Spanjers, seminar participants at Universität des Saarlandes, seminar participants at University College London, participants in the conference of the Verein für Socialpolitik in Mainz 1999 and an anonymous referee for helpful comments. The views expressed in this paper are those of the author and do not necessarily reflect the views of the European Central Bank.     

A visualization system for mineral elasticity

The authors have developed an efficient visualization system to gain insight into large collections of mineral elasticity data produced by an increasing number of both theoretical calculations and experiments. The system allows us to visualize multivariate elastic moduli (i.e., elastic constant tensors) and their variation with composition, pressure and temperature. Moreover, it supports visualization of elastic wave propagation in an anisotropic medium by rendering the wave velocity data, which are calculated as a function of propagation direction in a three-dimensional space. This paper describes the design, implementation and application of the visualization scheme we have developed for mineral elasticity. In particular, our scheme exploits a combination of parallel coordinates, star plot, scatter plot and polygon-surface rendering techniques, which are implemented using OpenGL, GLUI and C++. The result is a highly portable and flexible interactive visualization system. For illustration, the elastic properties of several important oxide and silicate minerals are successfully visualized as a function of pressure and temperature.     

Overburden deformation associated with halokinesis in the Southern North Sea: implications for the origin of the Silverpit Crater

Gravitational collapse in response to the creation of salt swells and diapirs is a common phenomenon within regions such as the Southern North Sea. Although collapse faulting and slumping of linear salt swell flanks has previously been documented, the existence of concentric collapse structures surrounding diapirs and isolated salt lows is a recently recognised feature. 3-D seismic data from the Southern North Sea demonstrates that concentric collapse faulting around both diapirs and subcircular salt lows is common. The recognition of concentric collapse structures formed in response to salt withdrawal, and adjacent inflation, provides an alternative mechanism for the origin of the proposed Silverpit impact crater.