The generation gap and optimal economic growth

Among the problems confronting those who aspire to the development of a realistic and practicable optimal growth theory is that the human population is not homogeneous with respect to age. Those who are relatively young are apt to prefer a different pattern of capital accumulation from that preferred by those who are relatively old. This paper proposes a tentative solution to this particular problem. Essentially the proposal is that society should remain with what is an optimal private plan of an individual who is at the median age of the population at the beginning of the planning period, for one planning period, after which it revises the plan to switch to the optimal private plan of another individual (one planning period younger than the first) who is at the median age at the commencement of the new planning period. Thus the optimal social plan consists of a succession of one planning period implementations of the first periods of the optimal private plans of individuals who are at the median age at that time period. An example of the application of the method is given. An important sidelight of the paper is a critique of standard constant-rate exponential discounting in social planning of optimal capital accumulation, and the proposal that it be replaced by “mortality discounting.”     

The allocation of tariff revenues and optimum trade distortion. With empirical applications to United States sugar policy

Zusammenfassung Die Verteilung von Zolleinnahmen und die optimale Verzerrung des AuΒenhandels. Mit empirischen Anwendungen auf die Zuckerpolitik der Vereinigten Staaten. — Erzeugersubventionen reduzieren die Wohlfahrt, wenn auch weniger als PreisstützungsmaΒnahmen verbunden mit Vorratsbildung. Für normale Güter gilt das Gesetz des komparativen Vorteils, aber Subventionen k?nnen die Richtung des AuΒenhandels umkehren. Z?lle und Kontingente k?nnen die Einnahmen für die Subventionszahlung steigern, obwohl die Verwendung dieser Einkünfte für Transferzahlungen der Subventionierung vorzuzichen w?re. Die Vereinigten Staaten kontingentieren die Zuckereinfuhr, gestatten aber den Zucker exportierenden L?ndern, die Gewinne zu kassieren und als Zuckererzeugungssubventionen ineffektiv zu verteilen. Die Zucker exportierenden L?nder haben nicht genügend Informationen, um sagen zu k?nnen, wie eine Kontingenterh?hung wirken würde; in diesem Aufsatz wird eine anwendbare Formel für die optimale Quote abgeleitet.

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Résumé L’allocation des revenus douaniers et la distorsion de l’optimum du commerce. Avec applications empiriques à la politique du sucre des Etats —Unis. Les subventions à la production réduisent la prospérité, même si elles le font moins que les mesures d’appui aux prix, combinées avec la formation de stocks. Pour les biens normaux, la loi de l’avantage comparatif est valable, mais les subventions peuvent renverser la direction du commerce extérieur. Tarifs douaniers et contingents peuvent augmenter les revenus pour les paiements de subventions, bien qu’il soit préférable d’utiliser ces revenus pour les paiements de transferts. Les Etats-Unis contingentent l’importation du sucre, mais permettent aux exporteurs de sucre d’en recueillir les revenus, qu’ils distribuent inefficacement comme subventions à la production de sucre. Toutefois, les exporteurs de sucre n’ont pas les informations pour savoir comment une augmentation du contingent les affecterait, tandis qu’une formule applicable pour un contingentement optimal est ici dérivée.

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Resumen La distribution de los ingresos aduaneros y la distorsión del óptimo de comercio exterior. Con aplicaciones empíricas a la política azucarera de los Estados Unidos. — Subvenciones al productor reducen el bienestar, aunque menos que las medidas de apoyo de precios combinadas con la formatión de existencias. Para bienes normales vale la ley de las ventajas comparativas, pero subvenciones pueden invertir la directión de las corrientes de comercio exterior. Aranceles de aduana y contingentes pueden incrementar los ingresos disponibles para el pago de subvenciones, aunque la utilizatión de estos engresos para pagos de transferencias sería preferible. Los Estados Unidos imponen cupos a la importatión de azúcar, pero permiten a los exportadores extranjeros que realicen los beneficios y los distribuyan sin efecto alguno en forma de subvenciones a la productíon de azúcar. Los exportadores de azúcar no disponen de las informaciones necesarias para conocer el impacto de un aumento de la cuota de importatión. En el presente arículo se desarrolla una fórmula operacional para la determinatión de la cuota óptima.

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Riassunto La distribuzione di proventi doganali e la deformazione dell’ottimo di commercio estero. Con applicazioni empiriche alla politica dello zucchero degli Stati Uniti. — Sovvenzioni ai produttori riducono il benessere, ma in misura minore di quanto farebbero provvedimenti a sostegno dei prezzi legati a costituzione di scorte. Per beni normali vale la legge del vantaggio comparativo, ma sovvenzioni possono invertire la direzione del commercio estero. Dazi e contingenti possono accrescere i proventi per il pagamento di sovvenzioni, sebbene l’impiego di queste entrate per pagamenti di trasferimento del sovvenzionamento sia da preferire. Gli Stati Uniti contingentano l’importazione dello zucchero, consentono, però, di incassare i guadagni agli esportatori stranieri che li distribuiscono senza efficacia come sovvenzioni per la produzione dello zucchero. Con ciò gli esportatori di zucchero non hanno le informazioni per poter dire come un aumento di contingente potrebbe influenzarli, sebbene una formula applicabile alla quota ottimale sia derivata in questo articolo.

     

Detecting financially troubled property-liability insurers

The financial failure of property-liability insurers results in unpaid claims amounting to approximately $25 millions annually. A more effective system must be developed to detect these troubled firms at an earlier date and reduce this cost to society. The current system employed by the National Association of Insurance Commissioners relies primarily on loss reserves and loss ratios. It appears that most failures result from dishonesty and the removal of assets from the company into the possession of management. This study presents a model which incorporates variables designed to detect this draining of assets and identify companies which show a high probability for failure. This model is tested on an independent sample and is successful in correctly classifying 88% of the firms three years prior to liquidation. This study differs from prior studies by using a new approach to selecting the variables for the model.     

Manage your human sigma

If sales and service organizations are to improve, they must learn to measure and manage the quality of the employee-customer encounter. Quality improvement methodologies such as Six Sigma are extremely useful in manufacturing contexts, but they're less useful when it comes to human interactions. To address this problem, the authors have developed a quality improvement approach they refer to as Human Sigma. It weaves together a consistent method for assessing the employee-customer encounter and a disciplined process for managing and improving it. There are several core principles for measuring and managing the employee-customer encounter: It's important not to think like an economist or an engineer when assessing interactions because emotions inform both sides' judgments and behavior. The employee-customer encounter must be measured and managed locally, because there are enormous variations in quality at the work-group and individual levels. And to improve the quality of the employee-customer interaction, organizations must conduct both short-term, transactional interventions and long-term, transformational ones. Employee engagement and customer engagement are intimately connected--and, taken together, they have an outsized effect on financial performance. They therefore need to be managed holistically. That is, the responsibility for measuring and monitoring the health of employee-customer relationships must reside within a single organizational structure, with an executive champion who has the authority to initiate and manage change. Nevertheless, the local manager remains the single most important factor in local group performance. A local manager whose work group shows suboptimal performance should be encouraged to conduct interventions, such as targeted training, performance reviews, action learning, and individual coaching.