Trade, product cycles, and inequality within and between countries

Abstract.  This paper incorporates Northern product innovation and product‐cycle‐driven technology transfer into the continuum‐of‐goods Heckscher‐Ohlin model. The creation of very skill‐intensive goods induces the North to transfer production of older, less skill‐intensive goods to the South. These relocated goods are the most skill intensive by Southern standards. Hence, product cycles raise the relative demand for skilled workers and thus wage inequality within both regions. This runs contrary to the Stolper‐Samuelson theorem, but accords well with the fact that wage inequality has risen in both Northern and Southern countries. Moreover, product cycles increase income inequality between countries. JEL classification: F1     

A theoretical model of the relationship between value added elements and end product

This paper focuses on the development of a theoretical scheme describing the transformation of primary incomes into end consumption and savings in the Russian economy. This scheme is basically a system of interrelated tables reflecting the distribution of primary incomes across the institutional sectors and their further reallocation and use. The scheme makes allowances for the specific features of the Russian economy and existing statistics. In terms of methodology, it is coordinated with the interindustry balance in current buyer prices and, from the theoretical standpoint, describes the connection between Quadrant II and Quadrant III of the balance. Therefore, the proposed system of tables is treated in the paper as Quadrant IV of the interindustry balance. The theoretical scheme is used by the authors as a necessary basis for constructing an empirical model of the relationship between value added and end product, which will be published in the next issue of this journal.     

Reporting Performance: Comprehensive Income and its Components

The underlying question raised in this article is: why is the accounting profession's conceptual framework (CF) so authoritative when it is conceptually incoherent? A supplementary question is how can ‘conceptually robust’ accounting standards be derived from an incoherent framework? This article draws on Page and Spira's (1999) contrasting framework metaphors to suggest that the appearance of conceptual robustness is more important than the reality, and illustrates the point with the International Accounting Standards Board's (IASB’s) progress report on its reporting performance project. Some inherent weaknesses in the move towards internationally enforceable financial regulations have been acknowledged, but this article suggests the IASB's project demonstrates two additional weaknesses: internal incoherence, and the potential for political ends to drive supposedly technical regulations.     

The determinants of bilateral trade

Abstract.  In this paper we present a monopolistic competition model that incorporates asymmetric trade barriers and international differences in production costs. The model implies a highly non‐linear bilateral trade equation. Estimation of this equation yields parameters for the elasticity of substitution and trade costs that are more reasonable than those found in previous studies. A simulation indicates that trade liberalization will shift trade from rich countries to poor countries and from within continental trading partners with preferential trade agreements to intercontinental trading partners. JEL Classification: F1     

A note on “Bed allocation techniques based on census data”

Capacity planning and resource allocation are crucial to the cost-effective delivery of health care services. In this paper, we present an analytic approach based on a modified version of the Holt-Winters multiplicative seasonality forecasting model to determine the frequency distribution associated with a hospital care unit's census. This paper is a follow-up to the census frequency distribution simulation model described in Lapierre et al. (Socio Econ. Plan. Sci. 33 (1999) 25). We demonstrate that our model can provide census frequency distributions equivalent to the simulation model of Lapierre et al. [1], but without the computational effort common to simulation models.     

HEDGING INTEREST RATE RISK UNDER TERM STRUCTURE EFFECTS: AN APPLICATION TO FINANCIAL INSTITUTIONS

In this paper we investigate the use of the structured full rank model for hedging the balance sheet of a financial institution. Simulation results suggest that the optimal hedge is insensitive to changes in parameter estimates. In addition, we hedge a portfolio of Treasury bills using both the full information covariance matrix and the structured covariance matrix. We then contrast these results with those obtained from a duration-based model. Empirical results suggest that the structured full rank model is generally more effective in hedging applications than either the full information model or duration-based model.     

Towards a complete real-time electricity market design

The general design for the real-time electricity market presented in this paper optimizes and prices both real and reactive power simultaneously in an AC setting, where all assets—generation, load and transmission—are allowed to bid and are financially settled at the locational price times energy consumed or produced. The result is that transmission lines are compensated for both capacity and admittance, providing incentives for efficient operation of transmission-related assets such as FACTS devices, if price-taking behavior is assumed. Losses are incorporated into the design and become an operating cost for transmission. The market design is shown to be revenue neutral and, under some assumptions, nonconfiscatory.      

AN EMPIRICAL EXAMINATION OF RELATIONSHIP MAGNITUDE

Based upon a review of the extant literature, it is proposed that the structure of an interorganizational relationship is composed of relationship type and the under‐researched construct of relationship magnitude. Specifically, it is hypothesized that relationship magnitude, a second order construct composed of trust, commitment, and dependence, affects relationship type, which affects the perception of value of the relationship. The results of a survey analyzed through structural equation modeling support these hypotheses.