The long-run implications of the production smoothing model of inventories: An empirical test

This paper provides an empirical test of the long-run implications of the production smoothing model of inventories, the dominant framework for inventory investment research in the past. Intertemporal models of a firm holding inventories of finished goods predict a long-run relationship between inventories, shipments, factor input prices, and the real interest rate which is tested here using cointegration test procedures. These tests provide little support for the predictions of the production smoothing model. In most of the data sets used, test statistics indicate that inventories, shipments, factor input prices, the nominal interest rate, and the inflation rate maintain a long-run equilibrium relationship but parameter estimates of cointegrating vectors are often implausible, typically rejecting hypotheses implied by structural models of the production smoothing motive for holding inventories.     

Is There Long Run Industrial Convergence in Europe?

This paper examines whether convergence is occurring at the industry level in 11 EU countries from 1960 to 1993. Both time series and non-parametric (σ-convergence) methods are applied. Using time series analysis we test whether there is within sector convergence towards a common steady state. Although we adopt a very flexible definition of steady state, allowing for two stochastic trends, given by the sector-specific technology and by the country-specific characteristics, as well as a time trend, we find very little evidence for convergence. Results indicate that the deviation of the national trends from the European average trend are persistent, and that EU countries do not respond to the same long run driving processes, but only to the same short run shocks. From σ-convergence analysis we find that convergence in aggregate productivity does not hold uniformly at the industry level: some sectors, such as communications, distribution and non-market services, present strong evidence of convergence, and some others, mainly manufactures, show substantial divergence. However, interestingly, we find that productivity was strongly converging within all sectors in 1960–73, whereas it shows a general tendency to diverge after 1985. We interpret the switch from convergence to divergence as the effect of a process of radical change, driven by information technologies, affecting all industries in the last two decades. We arrive at the general conclusion that convergence is not an inevitable process, but rather a cyclical phenomenon alternating with divergence.     

Public education in developing countries: Cost-effectiveness of education policies and endowments growth

The article analyses the general equilibrium effects of education as a user and producer of resources considering some features of the sector typical in developing countries, such as the presence of inefficiencies, in a model that nevertheless remains close to the Heckscher–Ohlin paradigm. Short- and long-term effects of education are considered and it is shown that the overall effects are linked to the efficiency with which endowments are produced. The analysis has implications for policymakers in developing countries with failing educational systems, as it suggests a relation between cost-effectiveness of policies and growth and not between enrolments and growth or between public expenditure in education and growth as it is usually tested in growth regressions.     

Human resources administration processes in commercial restaurants and food safety: The actions of administrators

The study analyzed of the human resources administration processes at commercial restaurants, focusing on the provision of safe foods to consumers. Interviews were conducted with 105 restaurant managers at the city of Florianópolis, Brazil. Three types of restaurants were studied; 45.7% were buffets by weight, 39.1% fast-food restaurants and 15.2% churrascarias. A questionnaire was used with close-ended questions to characterize the restaurants and identify the human resources administration processes for hiring, evaluation, training and provision of benefits to employees. It was found that 89.4% of the restaurants adopt criteria for hiring of employees and 81.9% conduct periodic evaluations. Benefits were offered by 85.7% of the restaurants and 74.3% of the establishments provided employee training. The results indicate that human resources management processes at restaurants can contribute to the provision of safe food, although some establishments still need to adopt professional procedures for recruitment, selection, evaluation and training of their employees.     

Delivery lags and buffer stocks in the theory of investment by the firm

This paper contains a dynamic model of a firm holding a stock of unfilled orders for output while facing a fixed delivery lag attached to acquiring new capital goods. The model leads to a two-stage optimal control problem where the initial time interval corresponds to the Marshallian short-run and the second interval is the period during which deliveries of capital goods may arrive. Optimality criteria are provided for both time intervals and the behavior of the firm is characterized along both adjustment paths. The short-run decisions of the firm are shown to be tied to long-run decisions planned by the firm.     

Who’s Who in Global Value Chains? A Weighted Network Approach

This paper represents global value chains (GVCs) as weighted networks of foreign value added in exports, which allows for the identification of the specific roles of countries and for the quantification of their relative importance over time. A major structural change occurred in the beginning of the century as GVCs steadily turned into global networks, amid an unprecedented growth of value-added flows and the rise of China as a major player. First-order network metrics highlight the vital but also distinct roles of Germany, the US, China and Japan in the international organisation of production. Germany is very relevant both as a user and as a supplier of foreign inputs, whilst the US acts mostly as a supplier of value added to other countries. Second-order properties of networks shed light on the complex architecture of GVCs, notably in terms of cyclical triangular relationships. Germany’s GVCs mostly root in direct relationships, whilst Japanese ones typically involve more than two countries.     

Normalization in cointegrated time series systems

Abstract .  A method for normalizing cointegrating vectors is proposed for cointegrated time series systems containing multiple cointegrating vectors, a method requiring that an identity matrix appear in the normalized cointegrating matrix with unit coefficients attached to the endogenous or choice variables. The preferred method causes the normalized cointegrating matrix and the adjustment matrix to be consistent with the implications of static and dynamic economic theory. Alternative normalizations generate cointegrating and adjustment matrices that do not match up well with economic theory and do not reveal the testable restrictions implied by static economic theory.     

CABINET DETERMINANTS OF STRUCTURAL REFORMS IN LATIN AMERICA, 1985–2000

Little research has been devoted to the analysis of how different characteristics of the executives affect structural reforms. This article analyzes the impact of cabinet fragmentation and the presidential ideological position on the scope of structural reforms in nine Latin American presidential democracies of the postauthoritarian period. In so doing, it treats cabinets as conglomerates of actors that are accountable both to the president and to their parties, with nonpartisan ministers being only accountable to the president. It shows that the higher the percentage of nonpartisan ministers, the lesser the costs associated with bargaining a reform within the executive. When presidents build governing coalitions, they limit their capacity of acting unilaterally. However, they are better able to advance their structural reform proposals than single‐party governments are. Data on cabinet composition were collected by the authors and data on the dependent variable structural reform comes from Lora (2001 ).