Time-consistent linear taxation and redistribution in an overlapping-generations framework

We study time-consistent labour and capital income linear taxationusing an infinite-horizon overlapping-generations model of asmall open economy. Individuals have different productivitiesand the government intervenes for purely redistributive purposes.The study of time-consistent taxation requires the introductionof borrowing restrictions in the economy. We characterize thetime-consistent solution and consider alternative solutionsbased on a simple tax rule. We demonstrate the existence andthe uniqueness of the time-consistent solution using a log-linearutility function. We provide numerical comparisons between time-consistentand time-inconsistent linear taxation: the importance of beingable to make commitment decreases when the differences betweenindividuals increase.     

Small business and industrialisation in South Korea

Small firms make a significant contribution to the overall performance of the Korean economy and they should play an increasing role in its necessary diversification up to the turn of the century. However, most research attention, decision-making and operational action have concentrated so far on the further promotion of the big Korean conglomerates. This paper suggests a few tentative observations on the role of small businesses in the industrial experience of South Korea.Dr P Régnier is coordinator of the Modern Asia Research Centre (Graduate Institutes of Development and International Studies, Geneva, Switzerland. This paper is based mainly on a research project dealing with the development of small and medium-sized enterprises in the four Asian NIEs. Field work was conducted in each of the Asian NIEs in 1988, 1989 and 1990.     

Organigraphs: drawing how companies really work

Walk into any organization and you will get a snapshot of the company in action--people and products moving every which way. But ask for a picture of the company and you will be given the org chart, with its orderly little boxes showing just the names and titles of managers. Now there's a more revealing way to depict the people and operations within an organization--an approach called the organigraph. The organigraph is not a chart. It's a map that offers an overview of the company's functions and the ways that people organize themselves at work. Perhaps most important, an organigraph can help managers see untapped competitive opportunities. Drawing on the organigraphs they created for about a dozen companies, authors Mintzberg and Van der Heyden illustrate just how valuable a tool the organigraph is. For instance, one they created for Electrocomponents, a British distributor of electrical and mechanical items, led managers to a better understanding of the company's real expertise--business-to-business relationships. As a result of that insight, the company wisely decided to expand in Asia and to increase its Internet business. As one manager says, "It allowed the company to see all sorts of new possibilities." With traditional hierarchies vanishing and newfangled--and often quite complex--organizational forms taking their place, people are struggling to understand how their companies work. What parts connect to one another? How should processes and people come together? Whose ideas have to flow where? With their flexibility and realism, organigraphs give managers a new way to answer those questions.     

Measuring Motivations for Media Exposure: A Thesis

The present article discusses the problem of separating the motivation conceptempirically from other relevant concepts in research on mass media audiences.For about half a century, audience researchers use questionnaire items with adistinct format as measurements of motivations for media exposure. It isargued that these motivation items grammatically reflect the nature of themotivation concept as a theoretically intermediate variable between behaviourand its social or mental background, thus constituting the most plausibleindicators of the concept. However, it is also argued that these questionnaireitems are double-barrelled and that any measurement of motivations based onthe items can largely be considered an ambiguous mixture of behaviour and itssocial or mental origin. A study is presented that provides empirical support for this position.     

Trade policy under imperfect competition: The economics of Russian roulette

Summary Neo-classical economic theory shows that managed trade or protectionism is (almost) always welfare decreasing. However, measurements of the welfare costs of protectionism based on neo-classical models seem to suggest that these costs are quite small. We discuss general new insights and developments in the theory, policy and empiricism of international trade. The observation that intra-industry trade and the services sector are important has led to a shift in theory away from constant returns to scale and perfect competition towards economies of scale and scope, externalities, market imperfections, and imperfect competition. Although this, in principle, opens the door to beneficial government intervention in the economic process, we emphasize that the true costs of protection can potentially be much higher than is generally acknowledged as a result of the above mentioned shift.We would like to thank, without implicating, Martin Fase, Harry Garretsen, Catrinus Jepma, Simon Kuipers, Ger Lanjouw, Tenn Schmidt, Albert de Vaal, and Jean-Marie Viaene for stimulating conversations and useful suggestions. We thank Thijs Knaap for excellent research assistance.     

DOES GNP EXAGGERATE GROWTH IN “ACTUAL” OUTPUT? THE CASE OF THE UNITED STATES

Measures of national product can be misleading because there is nonmarket production. There are also distortions due to transactional activities, which are expenditures to support transactions, not actual output consumed. For 1950–89, this study recalculates output for the United States, adjusting for transactional activities and nonmarket production. Due to relatively rapid growth in transactional activities, GNP overstates output growth in the 1950s; because there was slow expansion of transactional activities in the early 1970s, GNP understates actual output. Since 1974, increases in transactional activities and shifts to market production lead GNP to exaggerate improvement of "actual" output per capita.     

Consistency of elementwise-weighted total least squares estimator in a multivariate errors-in-variables model <Emphasis Type="Bold">AX=B</Emphasis>

A multivariate measurement error model AXB is considered. The errors in [A,B] are rowwise independent, but within each row the errors may be correlated. Some of the columns are observed without errors, and in addition the error covariance matrices may differ from row to row. The total covariance structure of the errors is supposed to be known up to a scalar factor. The fully weighted total least squares estimator of X is studied, which in the case of normal errors coincides with the maximum likelihood estimator. We give mild conditions for weak and strong consistency of the estimator, when the number of rows in A increases. The results generalize the conditions of Gallo given for a univariate homoscedastic model (where B is a vector), and extend the conditions of Gleser given for the multivariate homoscedastic model. We derive the objective function for the estimator and propose an iteratively reweighted numerical procedure.Acknowledgements.A. Kukush is supported by a postdoctoral research fellowship of the Belgian office for Scientific, Technical and Cultural Affairs, promoting Scientific and Technical Collaboration with Central and Eastern Europe. S. Van Huffel is a full professor with the Katholieke Universiteit Leuven. This paper presents research results of the Belgian Programme on Interuniversity Poles of Attraction (IUAP Phase V-22), initiated by the Belgian State, Prime Ministers Office-Federal Office for Scientific, Technical and Cultural Affairs, of the Concerted Research Action (GOA) projects of the Flemish Government MEFISTO-666 (Mathematical Engineering for Information and Communication Systems Technology), of the IDO/99/03 project (K.U. Leuven) Predictive computer models for medical classification problems using patient data and expert knowledge, of the FWO projects G.0200.00, G.0078.01 and G.0270.02. The scientific responsibility is assumed by its authors. The authors would like to thank Maria Luisa Rastello and Amedeo Premoli for bringing the EW-TLS problem to their attention. The authors are grateful to two anonymous referees for the valuable comments.     

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 .