Evidence of interdependence and contagion using a frequency domain framework

This paper proposes a new measure of contagion, based on the frequency analysis of causality developed recently by Breitung and Candelon [Breitung, J., Candelon, B. 2006. Testing for short and long-run causality: a frequency domain approach, Journal of Econometrics, 12, 363–378.]. This approach handles several of the statistical problems identified in the literature. It also permits clear differentiation between temporary and permanent shifts in cross-market linkages: the first case is contagion while the second one is simply a measure of interdependence among markets. With this new approach, we examine the “Tequila” and Asian crises and find evidence of contagion for both. During the Asian crisis, higher interdependence has also contributed to the diffusion of the crisis in Asia.     

Should countries block foreign takeovers of R&D champions and promote greenfield entry?

Abstract In R&D intensive industries, governments promote greenfield foreign investments, while being sceptical towards foreign acquisitions of domestic high‐quality firms. We develop a theoretical model that shows that foreign acquisitions are conducive to high‐quality targets because of strategic effects on the sales price. However, foreign firms ‘cherry pick’ high‐quality targets to expand R&D rather than to downsize. Otherwise, rivals expand R&D, making the acquisition unprofitable. Thus, our model predicts that acquired affiliates invest more in R&D than greenfield affiliates. Using affiliate data, we find evidence that acquired affiliates have a higher level of sequential R&D intensity than greenfield affiliates.     

Guidelines For Pre-College Economics Education: A Critique

While economists of all persuasions undoubtedly agree that universal economic literacy would be desirable, there appears to be substantial disagreement over what economic literacy is, what problems most need to be addressed, and how they can best be solved. These differences are clearly reflected in their diverse views as to what the goals should be for teaching economics in secondary schools. This paper specifically examines the recommendations offered in a paper on economic content standards by leaders of the economic education movement in the U.S. and finds them seriously wanting.     

A characterization of social choice correspondences that implement the core of simple games

In a coalitional voting game, an alternative is said to be in the core when no majority is willing to replace it with another alternative. A social choice correspondence is a mapping which associates any profile of voters’ preferences with a non-empty subset of the set of alternatives, which is understood as the set of selected outcomes. We characterize the social choice correspondences which always select the core of a simple game for any profile of preferences. This work was completed when B. Tchantcho was Visiting assistant Professor at UTA (University of Texas at Arlington). We acknowledge the support of the Department of Mathematics of UTA. We are most grateful to R. Pongou of Brown University, USA for his help and advice. We sincerely thank N.G Andjiga for his helpful comments and we are indebted to two anonymous referees for their helpful comments.     

Outsourcing, Imports and Labour Demand

This paper examines the effects of purchased services and imported intermediate materials on the labour demand for different skills in German manufacturing sectors. We derive and estimate a factor demand system based on the generalised Box–Cox cost function nesting both the normalised quadratic and the translog functional form. We find that the impacts of output and capital growth are more important in explaining the demand for heterogeneous labour than substitution effects between labour and non–labour inputs. Similarly, the increasing use of both imported materials and purchased services is a consequence of output growth rather than input substitution.
JEL classification : J 23; O 33     

The regionalization of rail transport in France. An analysis of the interplay between actors (from the late 1990s through the 2000s)

In France, owing to the railway regionalization process, regional “governments” are finding themselves increasingly involved in transport policy-making. Based on a multidisciplinary comparative study conducted in six French regions, this paper aims to analyze the ways in which regional rail policies are constructed by examining, in particular, the way they are generated as a result of interactions between different institutional actors. These interactions are linked to tensions in three main areas: the financing of transport investments, the financing and nature of rail services and regional governance. We examine these tensions by referring to three configurations of actors: the first includes the Regions and the State, the second, the Regions and the rail actors, and the third, the Regions and other local authorities. Finally, we discuss our findings, emphasizing what they teach us about the regionalization process in France.     

On the smoothness of optimal paths II: some local turnpike results

We study the local turnpike property for two classes of infinite-horizon discrete-time deterministic maximization problems which have common applications, e.g., optimal growth theory. We follow a functional-analytic approach and rely on an implicit function theorem for the space of the sequences which converge to zero. We shall assume the existence of an optimal path which is not necessarily a steady-state. Relying on material developped in Blot and Crettez (Decis Econo Finance 27:1–34, 2004), “On the smoothness of optimal paths” Decis Econ Finance, 21:1–34, 2004), we provide conditions under which a variation in the initial conditions (i.e., capital stock and discount rate) yields an optimal solution which converges toward a reference solution when time becomes infinite. We also provide new results on bounded solutions of difference equations. We gratefully thank the editor, Silvano Holzer, and two anonymous referees for remarks and advices on a previous version of this paper.