The aggregate supply of output and a constant price level

Summary When they are treating the case of an economy operating at less than full employment macro theorists commonly assume that the aggregate supply function for output is perfectly elastic with respect to the price level. In this paper we demonstrate that an aggregate supply of output which is perfectly elastic at some price level cannot be derived from the interaction of the demand for and supply of labor in a competitive market even when the labor supply conditions are Keynesian in nature - e.g., rigid money wage rates.     

Program planning with Tobit analysis—the United States food stamp case

The purpose of this paper is to illustrate the usefulness of the Tobit model in program planning. The avenue of display is the U.S. Food Stamp Program. Special analytical problems are encountered when the number of eligible nonparticipants of government programs is substantial. Under such circumstances difficulties arise with the use of ordinary regression techniques. The Tobit model is designed to reliably estimate relations from data encumbered with obstacles of this kind. Applications shown herein include program participation prediction and elasticities and probability changes associated with isolated exogenous variable changes.     

Understanding commercialization of technological innovation: taking stock and moving forward

The commercialization of technological innovation, which is key to entrepreneurial success, represents a combination of several entrepreneurial activities. Building on research in management, strategy, entrepreneurship, and economics, this research summarizes 194 articles from 62 journals, categorizing them into six broad entrepreneurial activity themes: sources of innovations, types of innovation, market entry competence and feasibility, protection, development, and deployment. This review and synthesis suggest a framework of commercialization and an agenda for future research along with recommendations and guidance for future research. The proposed agenda provides topics and research questions for research, as well as related recommendations regarding the study and practice of the commercialization of innovation.     

The Dynamic Response of Housing Values to a Forest Invasive Disease: Evidence from a Sudden Oak Death Infestation

“Sudden Oak Death” (Phytophthora ramorum) is a non-indigenous forest pathogen which causes substantial mortality of coast live oak (Quercus agrifolia) and several other oak tree species on the Pacific Coast of the United States. We estimated the time path of residential property values subject to oak mortality using a dataset that spans more than two decades—including a decade of transactions before-and-after the invasion. The findings suggest moderate, persistent property value discounts (3–6%) for homes located near infested oak woodlands subject to continuous post-invasion declines in forest health. The most severe discounts (8–15%) occurred where dying oaks were distributed both within residential neighborhoods and in nearby woodlands. Various hedonic modeling specifications were tested and compared to assess their ability to control for bias associated with unobserved spatial effects.     

International competition policy and telecommunications. Lessons from the EU and prospects for the WTO

The changes in the international telecommunications market are rapidly outgrowing the existing structure of regulation. Moreover the trends in the sector indicate that if the Most Favoured Nation (MFN) rule is to be viable some form of international competition policy is needed. This must tackle the difficult problems of market access, joint ventures and anticompetitive behaviour and most importantly prevent the different approaches to these problems leading to trade frictions, especially in the USA. Such rules have proved difficult, but not necessarily impossible, to develop as the stalled talks within the World Trade Organisation (WTO) have shown. The paper considers the possible relevance of developments within EU telecommunications regulation where a competition policy-led regime is emerging.     

Predispositions and the comparative effectiveness of rational,emotional and discrepant appeals for both high involvement and low involvement products

Advertising effectiveness is often measured by its ability to impact attitudes and purchase intentions among those positively predisposed and negatively predisposed toward the brand. As a consequence, selecting the appropriate appeal is crucial. Information processing theory suggests that the choice should reflect both consumer’s predispositions and their level of involvement. The espoused theories together with prior empirical evidence promoted six sets of hypotheses relating to the comparative effectiveness of rational, emotional, and discrepant appeals. The respective appeals were administered to positively predisposed and negatively predisposed subjects for both high involvement and low involvement products. A MANOVA analysis of the data from a 3×2×2 within-subjects experimental design revealed significant main effect differences in terms of both predisposition and type of appeal.     

Integration or Independence? An Alternative Assessment of Real Interest Rate Linkages in the European Union

The relationship between national real interest rates provides a valuable insight into the extent of economic and financial integration between countries. This paper tests for long‐run parity in ex post real interest rates among the major European Union (EU) countries over the period 1979–2003. The empirical investigation, however, is based on an alternative approach. Strong parity is determined by whether or not the first largest principal component (LPC), based on real interest rate differentials with respect to a chosen base country, is stationary. The qualitative outcome of the test is invariant to the choice of base country, and compared with alternative multivariate tests for long‐run parity, this methodology places less demands on limited data sets. Strong evidence of onshore parity occurs during 1979–1990 and 1993–2003 with the half‐life of a deviation to parity that varies towards 6 months. There is no evidence of long‐run parity among EU members during 1990–1993 despite the easing of remaining capital controls in 1990. Parity is rejected for a sample of non‐EU countries throughout the study period.     

Information Asymmetry and the Bid‐Ask Spread: Evidence From the UK

Abstract:   The generally accepted factors that determine the bid‐ask spread are volatility, trading volume and market value ( Atkins and Dyl, 1997 ; Glosten and Harris, 1988 ; and Menyah and Paudyal, 2000 ). Following Kim and Verrecchia (1994) we include a measure of the disagreement in analysts' earnings forecasts in our model of the bid ask spread. This measure serves as a proxy for the informational disadvantage of market makers with respect to informed traders. Market makers respond to the additional risk by increasing the bid‐ask spread. We find that the disagreement amongst analysts is significant for horizons up to and including six months (and with the hypothesised sign) in explaining FTSE 100 company spreads, rendering strong empirical support for our model.     

A Simulation Model of Intergroup Conflict

In this paper we investigate intergroup conflict and examine the impact of strategies to manage and hopefully reduce it. To do this, we use a probabilistic computer simulation model, based on feedback principles. The model examines how conflict between two groups evolves over time. Group differences and the occurrence of intergroup incidents drive the model. Intergroup hostility which depends on past history, recent conflict incidents, and group differences is the key variable that indicates the proclivity toward conflict between the two groups. We use the model to examine various cases and the effect of conflict management strategies. Based on the model results, we develop some conclusions about the applicability of the findings to actual situations, as well as directions for further research.