Does the analysis of innovation barriers perceived by high growth firms provide information on innovation policy priorities?

High growth firms and reducing innovation barriers figure high in the European innovation policy debate. Do high growth firms face specific innovation barriers which are relevant for innovation policy? In this paper we study the robustness of the perception of innovation barriers when alternative definitions of high growth firms are used. Using data from two waves of the European Innovation survey (CIS 4 and CIS 2006) we show not only that different definitions of high growth firms lead to quite different results across country groups, but also that the results are quite different for the CIS 4 and CIS 2006 samples. We argue that in the light of the available empirical evidence this non-robustness should not come as a surprise and that this negative result makes it difficult to specifically target high growth firms with public policies. Fostering the emergence of high growth innovative firms in Europe may not be feasible with targeted funding policies only but needs a systemic approach.     

Uncertainty and the Value of Capital: Marginal Efficiency and the ‘Conventional Projection’

Keynes provided not one but two formulae for calculating the relationship between the Present and the Future. On the one hand we have the well-known Marginal Efficiency of Capital (MEC), where the value of the present stock equals the discounted sum of future earnings, but on the other we have the Conventional Projection (CP) where the expected earnings in the future reflect the productivity of present facilities. The MEC is likely to reflect the views of fund managers, the CP the views of corporate managers. These two sets of judgments of the future may coincide or diverge. Either way they determine the value of the present capital in terms of claims to it—and this determination may be stable or unstable, but in any case will be volatile in the sense that the underlying uncertainty can lead to rapid shifts. By contrast, the Classical Equations will give us the value of present capital in terms of its replacement or real cost. This is reliable, being based on the real side of the economy. The ratio of this to the uncertain and volatile MEC/CP financial calculation is analogous to Tobin's Q, and will play a role in determining investment decisions, but it chiefly gives us insight into how volatile those must be.     

The Achievements and Failures of Argentina's Neo-liberal Economic Policies

The stability of an economic policy regime depends in large measure on either its successful authoritarian imposition or on the general acceptance by society of the distributional status quo of assets and/or income. Although Argentina's Convertibility Plan ("Currency Board" system) brought price stability and growth to the country, the inability or unwillingness of the government to attain a fiscal adjustment threatened its survival. The "fight for shares" in this "conflict society" was inherited from previous regimes. We show that this fight, previously left unresolved through inflationary finance, was subsequently left unresolved through the rapid growth of indebtedness under the Convertibility Plan. From 1999 onwards, the contradictions of the Plan became increasingly obvious and it was clear that the key to future stable economic growth was dependent on finding a way to turn the "conflict society" into a "consensus society". The construction of such a society is still a pending task for Argentina.     

Finding invariant structures in Forrester's world dynamics—An analysis by simulation

The authors investigated Forrester's World Dynamics for properties which are invariant with respect to the model, i.e., properties of the prediction curves which are only dependent on the variables inherent in the model. The suspicion that invariant properties exist is confirmable, for example, by making significant changes in the initial conditions and by observing the resulting prediction curves for their qualitative behavior. In the course of extensive investigations carried out on the ICL-1909 computer of the Technical University of Berlin, several examples were encountered which prove certain invariants in Forrester's model. A one-year iteration interval was selected for the simulations that were carried out. Other step-lengths, it turned out, yielded appreciable alterations in Forrester's results. Further, the authors investigated if and when certain limiting values are approached after the year 2100. This is clearly exhibited in the case of some variables. Even for simulations with changed initial values, limiting values result which are similar to those in runs with the original initial values. Simulations with altered Table Functions show that some model variables are impacted by those changes while others are at least qualitatively in accord with their behavior in the original runs.     

Allocative inefficiency properties of price-cap regulation

The paper deals with the argument that a price-cap regulated firm maximizing profits under the price-cap constraint will set prices that over time approach the Ramsey structure. My analysis explores the effects of price caps on the structure of prices. The results are in important aspects at variance with the claim of convergence to a Ramsey structure.     

Indexing in Brazil

After reviewing the distortions which inflation brought about in Brazil, the authors describe the indexing system which was introduced during the sixties to prevent such distortions and to build up a capital market. There follows an analysis of the impact of indexing on various types of savings instruments, on the distribution of credit and on the balance of payments. The last section of the paper deals with the effects of indexing on inflation, resource allocation, income distribution and the collection of adequate data.     

On constrained optimal allocations with incomplete markets

Summary We provide an example of an economy with incomplete asset markets in which there is no constrained optimal allocation.I would like to thank Ramon Marimon for many helpful discussions, and to an anonymous referee for useful comments.