Induced innovation and marginal cost of new technology

Lacking data on development and implementation costs for input-saving technologies, we develop a nonparametric procedure to estimate relative differences in marginal technology costs for technical change to be consistent with the induced innovation hypothesis. We apply it to U.S. agriculture.     

A SURVEY ON THE OUTPUT EFFECTS OF TAX REFORMS FROM A POLICY PERSPECTIVE

This study reviews the existing evidence on the effects of tax reforms on output levels and growth over the short and long run from different strands of the literature. It develops and applies criteria to evaluate the usefulness of ex‐post estimates to predict the effects of tax reforms ex ante. Based on these criteria, we present detailed tables summarizing and comparing ex‐post estimates of the effects of tax reforms. Overall, our review suggests that at least the direction of the short‐run and long‐run growth effects can be predicted with a reasonable degree of certainty, but there is disagreement with respect to the magnitude. Our review also suggests that depending on the tax change, trade‐offs between short‐run stabilization and long‐run growth may arise and that more research on this question is needed. (JEL E62, H20, O20)     

Computing optimal tax equilibria

This paper proposes a technique for computing optimal taxes in a full general equilibrium model. It is based upon a fixed point algorithm of the type that is widely used to solve Walrasian general equilibrium models. Computing an optimal tax equilibrium is more difficult than solving a general equilibrium model only to the extent that the derivatives of the social welfare function and of the consumer demand functions must be calculated in the former case. Solutions to several sample problems are provided to demonstrate the technique. They suggest that optimal tax rates are exceedingly sensitive to the specification of the model used to derive them.     

Introduction to the special issue on positive conflict—Conflict and employees: The right and processes to be heard

Conflict, defined as clash, competition, or mutual interference of opposing or incompatible forces or qualities, may be positive. The appropriate amount of conflict may be a delicate balance not easily achieved. Thus, a key issue is conflict management. The major charter of this special issue is the presentation of work which suggests or demonstrates that conflict can be a positive force in the modern organization. It also is pointed out that conflict, positive or otherwise, and its resolution involves a broad spectrum of inquiry into the rights and obligations of those involved in the conflict     

The supply of consumption goods in centrally planned economies

Estimates are given, based on annual time series from the mid-1950s to 1975, of planner's supply functions for consumption goods in Czechoslovakia, the GDR, Hungary, and Poland. The supply function is specified in the form of a behavioral rule describing the planners' short-run adjustment of consumption away from its long-run trend. The fits are good, and the estimates support the a priori specification and the maintained hypothesis of stable resource-allocation behavior. These supply functions, together with household demand functions estimated in a separate paper, will provide a starting point for disequilibrium estimation of the consumption-goods market for these economies.     

Teacher qualifications and student achievement in urban elementary schools

Teacher quality is a key element of student academic success, but few specific teacher characteristics influence classroom outcomes. This research examines whether teacher licensure test scores and other teacher attributes affect elementary student achievement. The results are based on longitudinal student-level data from Los Angeles. California requires three types of teacher licensure tests as part of the teacher certification process; a general knowledge test, a subject area test (single subject for secondary teachers and multiple subject for elementary teachers), and a reading pedagogy test for elementary school teachers. The student achievement analysis uses a value-added approach that adjusts for both student and teacher fixed effects. The results show large differences in teacher quality across the school district, but measured teacher characteristics explain little of the difference. Teacher licensure test scores are unrelated to teacher success in the classroom. Similarly, student achievement is unaffected by whether classroom teachers have advanced degrees. Student achievement increases with teacher experience, but the linkage is weak and largely reflects poor outcomes for teachers during their first year or two in the classroom.     

Unemployment and welfare consequences of international outsourcing under monopolistic competition

This paper challenges the conventional academic view that international outsourcing is just another form of gainful trade. Contrary to that view, we show that labour‐service outsourcing can reduce the high‐wage country's welfare even when product‐market trade is beneficial, within a model that combines involuntary unemployment and monopolistic competition. Outsourcing's impact on welfare is worsened by a definite loss of jobs and a possible contraction in the range of varieties produced worldwide. While owners of capital benefit from outsourcing under certain conditions, labour's welfare always falls.