armington models and terms of trade effects some econometric evidence for north america elasticities of substitution among u s imports from mexico canada the rest of the world and competing domestic production are estimated for twenty two mining and manufacturing sectors based on quarterly data for 1980 88 these elasticities will provide a benchmark for computable general equilibrium models of north american trade liberalization the authors also find that estimated armington elasticities are low and therefore researchers may want to reconsider the device of using high values of armington elasticities in multicountry computable general equilibrium models to avoid large terms of trade losses associated with preferential trade liberalization

marketable pollution permits in oligopolistic markets with transaction costs in this paper we present a variational inequality framework for the modeling qualitative analysis and computation of equilibrium patterns in multiproduct multipollutant oligopolistic markets with marketable pollution permits in the presence of transaction costs the model deals explicitly with spatial differentiation and also guarantees that the imposed environmental quality standards are met through the initial allocation of licenses an algorithm is proposed with convergence results to compute the profit maximized quantities of the oligopolistic firms products and the quantities of emissions along with the equilibrium allocation of licenses and their prices numerical examples are included to illustrate this approach

dairy tariff quota liberalization contrasting bilateral and most favored nation reform options we develop a highly disaggregated tariff line source differentiated partial equilibrium model of u s specialty cheese imports to investigate alternative reform options for tariffrate quotas a mixed complementarity framework is used to represent bilateral and multilateral tariff quota administration methods within the u s dairy industry the impact of liberalizing u s specialty cheese imports via bilateral and multilateral tariffrate quota expansions out of quota tariff cuts and simultaneous liberalization scenarios is evaluated we find that the path of liberalization is quite different depending on the reform approach undertaken the results have important policy implications in the agricultural negotiations

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

peer pressure and partnerships partnerships and profit sharing are often claimed to motivate workers by giving them a share of the pie but in organizations of any significant size the free rider effects would seem to choke off

a test for complementarities among multiple technologies that avoids the curse of dimensionality abstract we propose a strategy to identify the complementarity or substitutability among technology bundles differences between the observed distribution of technology choices can be subjected to statistical tests combinations of technologies that occur with greater frequency than would occur under independence are complementary technologies combinations that occur with less frequency are substitute technologies we use the strategy to evaluate multiple technology adoptions on us hog farms as the number of bundled technologies increases they are increasingly likely to be complementary with one another even if subsets are substitutes when viewed in isolation

unemployment inflation and monetarism a further analysis comment in a recent paper in this review robert van order proposes an interesting simplification of the important model of jerome stein 1974 the purpose of this comment is to correct some errors in van order s analysis to relate his results to stein s later work 1976b c and to analyze the role of these papers in the current debate over the mechanisms and effectiveness of macroeconomic policy for the convenience of the reader and to simplify the necessary references to van order s paper his equations through 7 and relevant notation are reproduced g g actual and expected rates of inflation y real output f indicator of fiscal policy m m nominal and real money supply p w levels of prices and wages v velocity of circulation n growth rate of m x speed of adjustment of expected inflation 9 ratio of bonds to money functions p phillips curve f production function e aggregate demand s aggregate supply r reduced form of e and s van order s equations are as follows

alternative models of spatial competition the concept of a spatial price equilibrium underlies most studies of spatial movement and competition however this concept is based upon a notion of perfectly competitive markets that is often unrealistic for many markets such as the markets for oil and coal and ignores the existence of local spatial monopolies this paper presents alternative economic models of spatial competition and shows how all of these models can be solved with essentially the same solution algorithm specifically after reformulating the classical spatial price equilibrium model and two extensions of takayama and judge s monopoly model we state and analyze a cournot nash model and discuss solution algorithms we then generalize these models and algorithms to multiple commodities and networks with transshipment nodes we conclude with a brief discussion of possible extensions of this class of models and associated algorithms

subjective performance measures in optimal incentive contracts objective measures of performance are seldom perfect in response incentive contracts often include important subjective components that mitigate incentive distortions caused by imperfect objective measures this paper explores the combined use of subjective and objective performance measures in respectively implicit and explicit incentive contracts naturally objective and subjective measures often are substitutes sometimes strikingly so we show that if objective measures are sufficiently close to perfect then no implicit contracts are feasible because the firm s fallback position after reneging on an implicit contract is too attractive we also show however that objective and subjective measures can reinforce each other if objective measures become more accurate then in some circumstances the optimal contract puts more weight on subjective measures because the improved objective measures increase the value of the ongoing relationship and so reduce the firm s incentive to renege we also analyze the use of subjective weights on objective performance measures and provide case study evidence consistent with our analyses

spatial market policy modeling with goal targets in this paper we show how the theory of variational inequalities can be applied to the formulation qualitative analysis and computation of a new competitive spatial market model in the presence of goal targets the model allows the decision maker to impose supply goals at production locations demand goals at consumption locations and transportation goals between supply and demand locations along with associated penalties for failure to comply this work may be viewed as a contribution to the growing literature on the development of mathematical methodologies for policy modeling

a continuous approach to oligopolistic market equilibrium we provide an algorithm for computing cournot nash equilibria in a market that involves finitely many producers the algorithm amounts to following a certain dynamical system all the way to its steady state which happens to be a noncooperative equilibrium the dynamics arise quite naturally as follows let each producer continuously adjust the planned production if desired as a response to the current aggregate supply in doing so the producer is completely guided by myopic profit considerations we show under broad hypothesis that this adjustment process is globally asymptotically convergent to a nash equilibrium

on the stability of an adjustment process for spatial price equilibrium modeled as a projected dynamical system abstract this paper presents a stability study for the continuous time adjustment process proposed for the perfectly competitive spatial price equilibrium problem modeled as a projected dynamical system by nagurney takayama and zhang 1995 two distinct approaches are adopted here for establishing the stability of the spatial price equilibrium under such an adjustment process one approach utilizes the monotonicity condition on the supply prices demand prices and transaction costs to develop various stability properties the other utilizes the regularity concept adapted from zhang and nagurney 1995 which enables us to explore the stability of the adjustment process a nonstandard dynamical system via its minimal face flow a standard dynamical system

animal health inputs endogenous risk general infrastructure technology adoption and industrialized animal agriculture abstract this paper develops a microeconomic model of concentrated animal feeding operations that admits roles for all of animal health inputs genetic profile choices and the pertaining economic infrastructure the basic model emphasizes how time on feed feed density and biosecurity choices interact as well as how these choices respond to i input prices and ii attributes regarding animal productivity parameters that might be influenced by policy choices such as animal welfare strictures and restraints on use of medication we show that ostensibly substituting inputs in protecting against animal health risks may in fact be complements and that the model s production choices come as a complementary package we then extend the model to endogenize the choice of animal genetics a finding is that innovations in general infrastructure encourage herd owners to choose more feed efficient but less hardy animals higher feed conversion efficiency then induces the use of denser feed rations accelerated finishing and greater levels of biosecurity actions at farm perimeters our theory provides a coherent framework for explaining associations among inputs and outcomes that are linked with confined animal agriculture it also explains how animal protein supply chain technology adoption and performance can differ according to a region s state of infrastructure why responses to a change in infrastructure may be large and why public sector efforts to reduce production risk may beget private sector effort to do so

a network equilibrium framework for internet advertising models qualitative analysis and algorithms in this paper we develop a network equilibrium framework for the modeling and analysis of competitive firms engaged in internet advertising among multiple websites the model allows for the determination of both the equilibrium online advertising budget as well as the advertising expenditures on the different websites we then specialize the model to the case of fixed online budgets for the firms the governing equilibrium conditions of both models are shown to satisfy finite dimensional variational inequalities we present qualitative properties of the solution patterns as well as computational procedures that exploit the underlying abstract network structure of these problems the models and algorithms are illustrated with numerical examples this paper adds to the growing literature of the application of network based techniques derived from operations research to the advertising marketing arena

are there systematic gender differences in the adoption of sustainable agricultural intensification practices evidence from kenya this paper uses sex disaggregated survey data at the plot level to test whether there are systematic gender differences in the adoption of multiple sustainable intensification practices sips in kenya we analyze plot level adoption decisions of sips by male female or joint plot managers within the household controlling for household characteristics asset wealth and land quality factors that condition investments in intensification options using a multivariate probit model we find gender differences in the adoption pattern for some sips compared to male plot mangers female managers are less likely to adopt minimum tillage and animal manure in crop production indicating the existence of certain socioeconomic inequalities and barriers for female farmers however we find no gender differences in the adoption of soil and water conservation measures improved seed varieties chemical fertilizers maize legume intercropping and maize legume rotations

the heterogeneous effect of shocks on agricultural innovations adoption microeconometric evidence from rural ethiopia abstract theoretically the relationship between shocks and agricultural innovation adoption could be ambiguous while shocks could lower the competence and capacity of households to adopt new agricultural innovations households can also take up agricultural innovations as a coping mechanism against the different shocks they face using a nationally representative household data from ethiopia of the living standards measurement study integrated surveys on agriculture lsms isa of the world bank this paper analyzes the effect of idiosyncratic and covariate shocks on adoption of different agricultural innovations assuming interdependence among the innovations we find shocks to have heterogeneous effects on the adoption of agricultural innovations specifically production and health shocks have negative effects on the adoption of high cost innovations such as improved seeds chemical fertilizer and irrigation however production shocks are positively associated with low cost innovations such as organic fertilizer to enhance farmers adoption of agricultural innovations especially high cost innovations there is a greater need towards the design of policies and interventions that would reduce household s exposure to production and health shocks

sensitivity analysis for the general spatial economic equilibrium problem we consider the general spatial economic equilibrium problem where the supplies and demands at each market for each commodity may depend on the price on this as well as other prices of other commodities at other markets and the transportation cost on each link for each commodity may depend on the flow on this as well as other flows of other commodities on other links in the network for this model we perform stability and sensitivity analysis assuming that the supply demand and transportation cost functions are monotone we first show that the multicommodity equilibrium price pattern depends continuously upon the market supply and demand functions and the multicommodity equilibrium shipment pattern depends continuously upon the transportation cost functions we then focus on the delicate question of predicting the direction of the change in the price and shipment pattern and the incurred supplies demands and transportation costs resulting from changes in the supply demand and transportation cost fu

evaluating the econometric evaluations of training programs with experimental data this paper takes the results of an employment and training program thatwas run as a field experiment in which the participants were randomlyassigned into a treatment or a control group and compares these results to the estimates that might have been produced by an econometrician who evaluated the program using the same econometric procedures that have been used in the program evaluation literature this comparison shows that many of these econometric procedures fail toreplicate the experimentally determined results and suggests that researchers should be aware of the potential for specification errorsin other nonexperimental evaluations copyright 1986 by american economic association

retraining in an interdependent system of labor markets a network analysis abstract the study of a system of markets for labor of different categories heterogeneous labor must be based on the recognition that individual workers may move from one category to another through schooling and retraining here such transitions are viewed as a flow through a retraining network the nodes of the network represent various stages of education and acquired abilities the directed links represent avenues of possible schooling and retraining if wages are rigid downwards failing to fall in the face of a weakening demand for labor there may be unemployment at one or several nodes of the retraining network an optimizing principle inspired by developments in the analysis of spatial networks is presented which solves for the supply of labor of each category the number of workers enrolled in the various retraining activities and the possible unemployment at each node of the network the lagrange multiplier of each market balance is the market wage rate whether the labor market is in equilibrium or not

challenges in quantitative economic analysis in support of multilateral trade negotiations abstract a wide range of economic analysis of agricultural trade liberalization was performed prior to and during the uruguay round of trade negotiations views differ as to the effectiveness of this research although most would agree that it became less relevant as the negotiations progressed this paper reviews the contributions of economists to the trade liberalization debate with an emphasis on the quantitative assessment of multilateral agricultural trade liberalization with a new round of agricultural trade negotiations scheduled to begin in 1999 it is crucial that the quantitative work required to support these negotiations begin in the near future the authors conclude that the uruguay round outcome provides numerous challenges and opportunities in analyzing the traditional agenda of agricultural trade liberalization in addition new issues will be added to the agenda of the next round of negotiations these include trade and the environment competition policy and intellectual property rights it is important that economists begin to develop a research agenda that can address these issues and become activists in addressing these topics in public forums

the relative inefficiency of quotas the cheese case the nonequivalence of tariffs and quotas under a wide variety of circumstances is well established in economic theory this study considers heterogeneity as a source of nonequivalence and demonstrates its practical importance where restriction is inevitable the bias of economists in favor of price instruments is not thoroughly grounded this study should help provide a foundation the point of departure from the equivalence model is differentiation of products

tariffs and quotas in world trade a unified variational inequality framework abstract in this paper we develop a unified variational inequality framework in the context of spatial price network equilibrium problems that captures world trade policies in the form of tariff rate quotas which are two tiered tariffs and that have been applied in practice to numerous commodities the spatial price network equilibrium model allows for multiple supply markets and multiple demand markets in different countries as well as multiple transportation routes the model is qualitatively analyzed and also related to models with trade policies such as ad valorem tariffs and strict quotas a case study on the dairy industry focusing on the united states and france is presented to illustrate the modeling and computational framework with impacts of stricter quotas higher over quota tariffs as well as additional transportation routes assessed the numerical examples reveal that although domestic producers can gain under tariff rate quotas consumers may experience higher prices given the relevance of tariffs to global trade in the world today and discussions concerning the impacts the framework constructed in this paper is especially timely

the effects of grievance activity on productivity this study develops and tests a production function that includes a plant s grievance filing rate as a determinant of productivity application of that function to data on nine unionized paper mill

computing market equilibria with price regulations using mathematical programming one approach to modeling and solving for economic equilibria relies on mathematical programming these models solve for competitive equilibria however policy analysis often requires measuring the impacts of government price regulations that differ from the competitive equilibrium in this paper we provide a unified framework for computing market equilibrium in mathematical programming models in the presence of government price regulations the iterative procedure that we use is essentially a gauss seidel algorithmic strategy the paper concludes by showing how to represent tax rebate programs average cost pricing and price ceilings

on convergence of the pies algorithm for computing equilibria equilibria in market models with continuous market supply functions can be obtained by computing fixed points with an activity analysis representation of production fixed point algorithms would converge slowly further since the market model here is of a partial equilibrium nature the market demand function may not exhibit the integratability condition precluding the formulation of the market equilibrium problem as an economic surplus maximization problem we examine an iterative algorithm the pies method for locating equilibria in markets whose production is described by optimization over a finite set of activities and whose econometric demand function does not possess the integrability property convergence properties of the algorithm along with existence and uniqueness of market equilibrium are summarized

modeling multiple adoption decisions in a joint framework a multinomial probit mnp model is applied to the modeling of adoption decisions by farmers facing multiple technologies which can be adopted in various combinations this model allows for full investigation of the interactions between decisions to adopt or not adopt several technologies estimation is carried out in a bayesian framework employing gibbs sampling to circumvent past difficulties encountered in maximum likelihood estimation of the mnp model the model is estimated for a sample of u s apple growers with four possible sustainable production technology bundles the results show that adoption decisions are most significantly influenced by off farm labor supply

unemployment inflation and monetarism the council s report provides a look at the 1969 71 game plan to disinflate by means of retarding aggregate demand the president elect s task force on inflation recommended as a first interim step that aggregate demand be slowed so as to bring the unemployment rate back to some equilibrium region around 4 5 percent what happened was that under the cover of the expectation and acceptance of such a limited step towards re equilibration the administration gradually tightened monetary and fiscal policy so severely as gradually to send the unemployment rate whizzing past the equilibrium zone to around 6 percent to my knowledge the theory of how and how well this medicine would act to cure the patient of his inflation was never spelled out by the council of economic advisers pp 533 34