Between the gift and the market: the economy of regard

'The great transformation' from customary exchange to impersonal markets is incomplete. Reciprocal exchange pervades modern societies. It takes the form of 'gifts', reciprocated without certainty. Reciprocity is driven by the pursuit of 'regard'. Money is avoided in regard exchanges, because it is impersonal. Instead, regard signals are embodied in goods, in services, or in time (attention). The personalization of gifts authenticates the signal. Reciprocal exchange persists in family formation, in intergenerational transfers, in labour markets, in agriculture, the professions, in marketing, entrepreneurship, and also in corruption and crime. Reciprocal exchange is constrained by time and psychic energy, but is likely to persist as a preferred source of regard.     

The market turn: from social democracy to market liberalism

Social democracy and market liberalism provide different solutions to the same problem: how to provide for life‐cycle dependency. Social democracy makes lateral transfers from producers to dependents by means of progressive taxation. Market liberalism uses financial markets to transfer financial entitlement over time. Social democracy came up against the upper limits of public expenditure in the 1970s. The ‘market turn’ from social democracy to market liberalism was enabled by liberalized credit in the 1980s. Much of this was absorbed into homeownership, which attracted majorities of households (and voters) in the developed world. Early movers did well, but eventually easy credit drove house prices beyond the reach of younger cohorts. Debt service diminished effective demand, which instigated financial instability. Both social democracy and market liberalism are currently in crisis.     

A complete asymptotic series for the autocovariance function of a long memory process

An infinite-order asymptotic expansion is given for the autocovariance function of a general stationary long-memory process with memory parameter d∈(−1/2,1/2)$d\in (-1/2,1/2)$. The class of spectral densities considered includes as a special case the stationary and invertible ARFIMA(p,d,q$p,d,q$) model. The leading term of the expansion is of the order O(1/k^1−2d)$O(1/k^{1-2d})$, where k$k$ is the autocovariance order, consistent with the well known power law decay for such processes, and is shown to be accurate to an error of O(1/k^3−2d)$O(1/k^{3-2d})$. The derivation uses Erdélyi’s [Erdélyi, A., 1956. Asymptotic Expansions. Dover Publications, Inc, New York] expansion for Fourier-type integrals when there are critical points at the boundaries of the range of integration - here the frequencies {0,2π}$\{0,2\pi \}$. Numerical evaluations show that the expansion is accurate even for small k$k$ in cases where the autocovariance sequence decays monotonically, and in other cases for moderate to large k$k$. The approximations are easy to compute across a variety of parameter values and models.     

Inventory Reduction and Productivity Growth: A Comparison of Japanese and US Automotive Sectors

This study assesses the inventory and productivity performance of the Japanese and US automotive industries in recent decades. Within each country we distinguish between vehicle assemblers and parts suppliers. In Japan, assemblers and suppliers made dramatic inventory reductions and productivity gains, particularly during the 1970s. By comparison, we find an unbalanced pattern for the United States: American assembly plants have been streamlined, but parts suppliers have stagnated. In both countries our findings suggest a strong association between inventory reduction and productivity growth © 1997 John Wiley & Sons, Ltd.     

Industry learning environments and the heterogeneity of firm performance

This paper characterizes interindustry heterogeneity in rates of learning‐by‐doing, and examines how industry learning rates are connected with firm performance. Using plant‐level data from the U.S. manufacturing sector, we measure the industry learning rate as the coefficient on cumulative output in a production function. We find that learning rates vary considerably among industries and are higher in industries with greater R&D, advertising, and capital intensity. More importantly, we find that higher rates of learning are associated with wider dispersion of Tobin's q and profitability among firms in the industry. These findings suggest that learning intensity represents an important characteristic of the industry environment that affects the range of firm performance. Copyright © 2009 John Wiley & Sons, Ltd.     

How Budget Deficits Cause Trade Deficits: The Simple Analytics

A supply and demand framework is used to clarify the links between budget deficits, exchange rates, and the trade deficit.     

Production frontier methodologies and efficiency as a performance measure in strategic management research

The measurement of corporate performance is central to strategic management research. A common objective of this research is to identify top performers in an industry and their sources of competitive advantage. Despite this focus on best firms and practices, most researchers utilize statistical methods that identify average effects in a sample, and they assess a single performance dimension while ignoring other relevant dimensions. Emphasis on purely financial measures can overlook the fact that a firm's efficiency in transforming resources has been shown as a major source of competitive advantage. In this article we demonstrate how frontier methodologies, such as Data Envelopment Analysis and the Stochastic Frontier approach, can address these challenges. We provide an illustration based on longitudinal data from U.S. and Japanese automobile producers. Copyright © 2013 John Wiley & Sons, Ltd.