Process Versus Product Innovation: Do Consumption Data Contain Any Information?

In a model of endogenous growth in which product and process innovations are the joint outputs of an unspecified research program, we show that if quality growth is not captured by official price indices the usual isomorphism of product and process innovations breaks down. We derive and estimate a Euler equation for a representative consumer under the assumption of measurement error. Unobserved quality improvements account for at least half of growth, and real productivity growth in postwar United States was two to five times greater than measured total factor productivity (TFP) growth. We also find that at least 15% of the measured slowdown in TFP growth can be attributed to unobserved increases in the relative importance of product innovations.     

Information packages for directors

As the function of boards of directors changes from reacting to directing, board members will need more and better information. Here is a model plan, tested by directors, for getting to them what they want and need.     

Price Premiums for Providing Eco‐labelled Seafood: Evidence from MSC‐certified Cod in Sweden

Eco‐labelled seafood is an important tool to promote sustainable development in fisheries. A price premium on eco‐labelled seafood signals a return on investment in sustainable fishing methods, providing an incentive for fishers to adopt such methods. This paper investigates whether Swedish fishermen gained a price premium from participating in the Marine Stewardship Council (MSC)‐certified Swedish Eastern Baltic cod fishery in the period 2011–2012. Using a detailed dataset of landing tickets and log books, we apply a panel data methodology to estimate the MSC price premium. We cannot find reliable evidence that the consumer level premium for MCS cod is actually passed back to the producers in this case.     

Sticky nominal wages and the optimal employment rule

Recent work in macroeconomics examines the implications of sticky nominal wage contracts for the behavior of the price level and real output. A crucial assumption of this work is a rule which relates the real wage and employment. This paper derives the optimal employment rule for a sticky nominal wage contract and examines the properties of this rule under different assumptions about the utility functions of workers and entrepreneurs. The optimal employment rule for a flexible nominal wage contract is also derived and analyzed for comparative purposes.     

Gradual Product Replacement,Intangible-Asset Prices and Schumpeterian Growth

The paper develops a general-equilibrium model of scale-invariant Schumpeterian (R&D-based) growth. New higher-quality products are discovered through stochastic and sequential R&D races in each industry. The market share of an R&D race winner increases gradually and is governed by an exponential deterministic process. The introduction of gradual (as opposed to instantaneous) product replacement sheds more light on the effects of the rate of technology diffusion on long-run growth and on long-run dynamics of intangible asset prices. An economy with faster product diffusion rates experiences higher long-run innovation rates, faster transitional growth, and is populated by younger firms. As the typical firm becomes older, the earnings yield (i.e., the inverse of the price earnings (P/E) ratio) increases and expected earnings growth declines. Younger firms have lower earnings, lower market shares, but higher P/E ratios and higher expected earnings growth associated with their higher potential market growth.An electronic version of the paper is available at http://bear.cba.ufl.edu/dinopoulos/research.html.     

Leader Survival and Cabinet Change

Political leaders face both internal and external threats to their tenure as leaders. To retain office leaders need mass support, for instance to win elections. However, they also need to deal with potential internal party rivals. Using a game theoretic model, we examine how the incentives created by these competing pressures affect the retention of ministers across different political systems. Since non‐democratic leaders face relatively little threat from the masses, their concern is to reduce internal party risk. Therefore, they remove high performing ministers and retain mediocre and poor performers. As it becomes easier for the masses to replace the party in power, leaders must tradeoff internal and external threats. Retaining competent leaders improves party performance but generates an internal party rival.     

Measuring the export capability of South African regions

Recent research has identified what determines local exports and what policies might make them grow. Regions with higher Gross Domestic Product per capita, faster population growth, higher levels of skills, greater export diversification and shorter distances to ports have experienced faster export growth. However, the results of regression models apply to a theoretical representative region and do not allow one to establish where policy interventions will be most effective. This article constructs an index to identify the regions in South Africa that can export manufactured goods. It draws on the literature of the determinants of exports for indicators of the capability (or potential) to export across 354 magisterial districts in 1996 and 2001. The results show a positive relationship between export capability and export performance. The article identifies a number of front-runner magisterial districts along with those of high capability but low performance that stand to benefit most from industrial policy interventions.