institutions and progress an insistent theme in richard nelson s work is that of capitalism as an engine of progress in this paper i explore this idea through a sequence of his writing distinguishing progress as outcome from progress as instituted process this leads to a deeper issue within this nelsonian theme namely the incompatibility between progress and equilibrium i argue that evolving systems are ordered and coordinated but they are never in equilibrium capitalism is restless it always generates change from within and the proximate source of this progressive tendency is the uneven accumulation of knowledge capitalism is restless because knowledge is restless copyright 2001 by oxford university press

catch up cycles and changes in industrial leadership windows of opportunity and responses of firms and countries in the evolution of sectoral systems this study proposes a framework that aims to explain why successive changes in industry leadership called also the catch up cycle occur over time in a sector in catch up cycles latecomer firms and countries emerge as international leaders whereas incumbents lose their previous positions new leaders are then dethroned by newcomers to identify factors at the base of catch up cycles this article adopts a sectoral system framework and identifies windows of opportunity that may emerge during the long run evolution of an industry this study proposes three windows related to the specific dimensions of a sectoral system one dimension is related to changes in knowledge and technology the second dimension pertains to changes in demand and the third includes changes in institutions and public policy the combination of the opening of a window technological demand or institutional policy and the responses of firms and other components of the sectoral system of the latecomer and incumbent countries determines changes in industrial leadership and catch up sectors differ according to the type of windows that may open and the responses of firms and other components of systems empirical evidence of catch up cycles is presented from six sectors namely mobile phones cameras semiconductors steel mid sized jets and wines

technology structural change and bop constrained growth a structuralist toolbox the latin american structuralism las is a significant part of the heterodox tradition in the theory of long run growth with a focus on the problems of developing economies which started their industrialization process when other regions had already accumulated substantial technological capabilities the emergence of a centre periphery system posed specific problems to growth and distribution in laggard economies which las discusses in a systematic way in this paper we presented a simple model which firstly captures key insights of the las school such as the persistency of technological asymmetries and structural heterogeneity secondly it can be used to analyze the impacts of shocks and policies based on how they affect supply side and demand side parameters of the model thirdly it links more closely post keynesian macroeconomics based on the bop constraint with the evolutionary microeconomics concerned with the dynamics of learning lastly it can be used as a toolbox and a teachable model in the analysis of the interactions between structural change technological catching up and long run growth

the relative value of farm animal welfare abstract this paper examines the viability of an alternative to willingness to pay method of eliciting values for farm animal welfare improvements the matching method common in the health and safety literature appears to perform well generating results that as might be expected are driven both by scheme specific variables and individual respondent characteristics however the results do not converge well with equivalent willingness to pay based values from the same population one interpretation of this result is that benefit cost ratios from stated preference studies are arbitrary phenomena with obvious implications for any policymaking based on such findings

structural change and the bop constraint why did latin america fail to converge this paper discusses why latin america failed to achieve sustainable convergence with the developed world since 1960 and analyses different phases of convergence and divergence using a structuralist keynesian approach first it is argued that there are critical differences between latin america the developed economies and the asian economies as regards the evolution of the income elasticity of the demand for imports the rate of growth of exports and the balance of payments constrained rate of growth the income elasticity of the demand for imports in latin america showed an upward trend particularly after the mid 1970s which was not matched by a similar increase in exports a pattern in sharp contrast with that of the east asian countries the evolution of and exports are used to set forth a typology of latin american economic growth since 1960 in addition the paper relates elasticities and the less favourable latin american performance to the intensity and direction of structural change using a broad sample of developed and developing economies it is shown that the developing countries that succeed in reducing the income gap are those that transformed their economic structures in favour of sectors with higher schumpeterian and keynesian efficiency copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

of birds and books more on hypothetical referenda recently cummings et al 1997 have reported a test of whether a hypothetical referendum using a majority rule is incentive compatible motivated in part by the national oceanic and atmospheric administration s noaa initially proposed rules for using contingent valuation in natural resource damage assessments these authors conclude that results from our experiments which involve a relatively simple good that is valued in a simple and controlled setting suggest that this hypothesis the incentive compatibility of a hypothetical referendum using majority rule be rejected p 619 this note questions the relevance of the authors results for the recommendations in the noaa rules and in the process identifies the general difficulties posed in measuring the amount of a public good 1 the noaa rules for contingent valuation were proposed by a distinguished panel of social scientists including two nobel laureates in economics kenneth arrow and robert solow arrow et al 1993 the guidelines were intended to enhance the reliability of contingent valuation estimates of willingness to pay for restoring injured natural resources as part of damage assessments required by the comprehensive environmental response compensation and

monetary shocks in models with inattentive producers we study models where prices respond slowly to shocks because firms are rationally inattentive producers must pay a cost to observe the determinants of the current profit maximizing price and hence observe them infrequently to generate large real effects of monetary shocks in such a model the time between observations must be long and or highly volatile previous work on rational inattentiveness has allowed for observation intervals that are either constant but long e g caballero 1989 or reis 2006 or volatile but short e g reis s 2006 example where observation costs are negligible but not both in these models the real effects of monetary policy are small for realistic values of the duration between observations we show that non negligible observation costs produce both of these effects intervals between observations are infrequent and volatile this generates large real effects of monetary policy for realistic values of the average time between observations

what happens when food marketers require restrictive farming practices the dimensions that define a food product have expanded rapidly to include characteristics of the production process marketing arrangements and implications that production and consumption of the product have for the environment some market intermediaries have responded by requiring that their suppliers abide by restrictive production practices we examine the economic effects of such restrictions and apply this analysis to limitations on the use of antibiotics in u s pork production results from conceptual and simulation analyses show that in the absence of demand growth less pork is sold due to higher costs in the restricted segment and both pork consumers on average and producers are harmed demand growth of between 6 11 from adding new consumers who will consume the restricted antibiotic free product but not the conventional product is needed to return consumer surplus to the level in the base case and between 2 4 demand growth was required to return producer surplus to base when restricted and conventional products are modeled using a vertical differentiation framework results depend importantly on the ease with which consumers can switch to a seller who offers their desired product type significant distributional impacts among consumers are present when switching costs are prohibitive

user producer interaction learning and comparative advantage michael porter s book the competitive advantage of nations 1990 has led to increasing attention on the favourable impact that advanced domestic users may have on competitiveness this paper presents a critical appraisal of the theoretical and empirical evidence on this relationship an econometric test of the hypothesis of a positive impact of advanced domestic users on competitiveness on data for 16 oecd countries between 1965 and 1987 is presented in general the results give strong support to the hypothesis under test the relationship appears to be stronger in cases where the home market is exposed to international competition

stagnation or transformation of a dual economy through endogenous productivity growth a growth model is developed for an open dual economy the economy expands owing to a higher growth rate of labour productivity in the modern sector through the kaldor verdoorn channel and higher effective demand through a keynesian channel the model incorporates a retardation mechanism affecting the slopes of productivity and output growth schedules as labour surplus and economies of scale diminish a wage led or profit led regime and initial conditions may give rise to de industrialization in terms of both output and employment a growth trap sustaining a situation of structural heterogeneity or sustainable employment and adequate output and productivity growth

keynes lucas and scientific progress in one of those marvelous coincidences of intellectual history robert lucas was born the year after the publication of keynes general theory for the first thirty five years of their mutual lives the two apparently coexisted in harmony but their relationship has been tumultuous ever since lucas has frequently criticized keynesian economics as poor science and it is precisely in that spirit that i want to address the debate today we all know the old joke about the professor who uses the same exam questions year after year but changes the answers that joke encapsulates all too well what has happened to macroeconomics these last fifteen years and seems to reflect poorly on economics as a science or does it on second thought the best answers to scientific questions do change as new observations are made as new experiments are run and as better theories are developed the issue is whether the answers to important questions in macroeconomics have changed for good scientific reasons or for other reasons the joke provides the framework for my talk i will pose eight exam questions and for each one i will summarize the answers given by keynes by lucas and his followers and by modern keynesians i pick only questions that are answered differently by keynesians and lucasians and that are central to contemporary macroeconomic debates the focus is on whether the keynesian or new classical answers have greater claim to being scientific each student must answer every question i are expectations rational

how complicated does the model have to be simple macroeconomic models based on is lm have become unfashionable because of their lack of micro foundations and are in danger of being effectively forgotten by the profession yet while thinking about micro foundations is a productive enterprise complex models based on such foundations are not necessarily more accurate than simple ad hoc models three decades of attempts to base aggregate supply on rational behaviour have not displaced the phillips curve inter temporal models of consumption do not offer reliable predictions about aggregate demand meanwhile the ease of use of small models makes them superior for many practical applications so we should not allow them to be driven out of circulation copyright 2000 by oxford university press

monetary shocks in models with observation and menu costs we study economies where price stickiness arises due to the simultaneous presence of both menu and information costs we identify the relative importance of these costs using firm s survey data and analyze the response of prices and output following a permanent unexpected monetary shock for a given frequency of price adjustment we find that the information friction significantly amplifies the real effect of the shock when the shock is small or when it is not known by firms instead when the shock is large and known to firms the flexibility of prices increases and the real effects gradually vanish

animal welfare and social decisions is it time to take bentham seriously abstract this paper analyzes and questions the standard welfare economics assumption of anthropocentric welfarism i e that only human well being counts intrinsically alternatives where also animal welfare matters intrinsically are analyzed both theoretically and empirically the general public s ethical preferences are measured through a survey of a representative sample in sweden and the responses from a clear majority suggest that animal welfare should indeed carry intrinsic weight in public decision making current legislation in many countries is consistent with this a brief review of moral philosophy on animal welfare indicates that a large majority of philosophers believe that animal welfare should count intrinsically it is moreover demonstrated that it is theoretically and practically possible to generalize welfare economics in order to give intrinsic value also to animal welfare the paper concludes that there are strong reasons to sometimes generalize welfare economics in order to take animal welfare into account directly i e in addition to effects through individual utilities the practical implications of doing so are likely to be more important over time as the scientific methods of measuring animal welfare are gradually improving

innovation systems and technological specialization in latin america and the caribbean abstract this paper examines the national systems of innovation nsi of latin american and caribbean lac countries and attempts to assess their performances although it points out at a number of specific successes overall the region s nsi have evolved since their inception in the 1950s into weak entities science and technology institutions and organisations are not fully performing an enabling role links and interactions between government support organisations businesses and academia are tenuous investment in intangibles and human capital is low and public policy is only partially effective the main result of such weakness is that lac countries innovative performance has as measured by the index of the technological specialisation its which relates the world s normalised shares of high to low tech exports with the only exception perhaps of mexico remained stagnant or has fallen and has lost relatively to many countries that started at similar levels twenty years ago

some empirical evidence on embedding effects in contingent valuation of forest protection abstract we test for an embedding effect on a geographically distributed public good and the extent to which improvements in the cvm design reduce the occurrence and magnitude of embedding effects in valuation using both open ended and dichotomous choice cvm for protection of forests in all of southeastern australia and two smaller portions of that area we find the occurrence of embedding effects in only one of the two levels when embedding effects were present there was a reduction in value much smaller than that found by kahneman and knetsch

willingness to pay for other species well being abstract benefit cost analysis of environmental policies typically focuses on benefits to human health and well being for other species economists have attempted to measure human wtp for changes in the numbers of individuals for different types of wildlife and to preserve biodiversity when it comes to humans wtp for improvements in the quality of life for other species however the evidence is limited morbidity and quality of life considerations may be particularly important to the task of valuing non fatal harm to wildlife in the wake of an environmental disaster we argue that the other species morbidity reduction component of wtp should be calculated net of any outrage component associated with the cause of the harm this net wtp is likely to be correlated with the premium that people are willing to pay for chicken products from birds for which the quality of life has been enhanced by improved animal welfare measures this paper uses a conjoint choice stated preference survey to reveal the nature of systematic heterogeneity in preferences for humanely raised versus conventionally raised chicken we also use latent class analysis to distinguish between two classes of people those who are willing to pay a premium for humanely raised chicken and those who are not

uneven growth between interdependent economies an evolutionary view on technology gaps trade and growth preface part one theory and empirics of international growth rate differentials and technology gaps chapter 1 technology growth and welfare a historical perspective 1 1 the search for welfare and the role of technology 1 2 aim of the book 1 3 organisation of the rest of the book notes chapter 2 the literature on economic growth and technological change 2 1 a brief overview 2 2 the traditional literature on economic growth 2 3 new neoclassical growth models endogenous innovation 2 4 the role of technological change 2 5 explaining growth rate differentials notes chapter 3 an evolutionary theory of economic growth and technological change the basics 3 1 economic growth as an evolutionary process a macroeconomic interpretation 3 2 economic growth as an evolutionary process a microeconomic interpretation 3 3 towards an evolutionary theory notes chapter 4 technology and growth in an international perspective 1960 1990 an impressionistic approach 4 1 economic growth and structural change 4 2 technology 4 3 technology and growth catching up or falling behind a global issue 4 4 summary and conclusions appendix iv 1 postwar economic welfare and the selection of country samples appendix iv 2 the 3 digit isic sector classification revision 2 appendix iv 3 on measuring and graphing structural differences between countries appendix iv 4 some tests for the influence of multicollinearity on the regressions in section 4 2 notes part two technology spillovers between interdependent economies catching up or falling behind chapter 5 a model of catching up or falling behind 5 1 description of the model 5 2 solving the model 5 3 the outcomes of the model under varying parameter restrictions 5 4 conclusions of the model notes chapter 6 an empirical test of the model 6 1 testing procedure and data sources 6 2 result 6 3 interpreting the results 6 4 summary and some policy conclusions appendix vi l a description of the data appendix vi 2 the calculation of the n statistic notes part three technological change international trade and economic growth chapter 7 an evolutionary model of technological change specialisation and economic growth 7 1 a descriptive interpretation 7 2 the model 7 3 simulation results 7 4 summary and conclusions appendix vii 1 initial values of the simulation runs for the 3 country 2 sector case appendix vii 2 some mathematical details of the selection equation in discrete time notes chapter 8 an empirical view on the evolution of trade and technology 8 1 patents as indicators of innovation 8 2 summarising some known correlations 8 3 trade and technology a dynamic evolutionary framework 8 4 estimation of the replicator equation 8 5 some further tests on the robustness of the replicator estimates 8 6 explaining the results for the patent variables 8 7 summary and conclusions

a technology gap interpretation of growth paths in asia and latin america abstract this paper presents a north south technology gap model which combines the schumpeterian approach to technical and structural change with the keynesian perspective on effective demand and the balance of payments bop constraint as drivers of growth three are the contributions of the paper first it develops a model in which the technology gap relative productivity and relative wages co evolve and may generate different paths of convergence or divergence between south and north depending on the parameters of the model second the parameters of the model are associated with different types of policies which allows for discussing how these policies may change the growth path finally the model is used to discuss the contrasting experiences of asia and latin america since 1970 convergence in asia and divergence in latin america have been extensively debated topics in the literature on comparative economic development which highlights the crucial role of industrial policy it is argued that the results of the technology gap model are consistent with the findings of this literature and helps understand the forces behind convergence and divergence

on visible choice sets and scope sensitivity abstract in this paper we argue that the burgeoning empirical debate over scope sensitivity within contingent valuation studies is fundamentally incomplete in that it has neglected a systematic examination of certain effects of study design upon observed scope sensitivity in particular we highlight the fact that in certain study designs the choice set initially offered or visible to respondents is changed in a stepwise manner as they progress through a valuation exercise while other designs involve advance disclosure regarding the full extent of the final visible choice set prior to any choices or values being elicited the issue of changes in the visible choice set is alluded to by smith j environ econom manage 22 1 71 who identifies this as a primary challenge to kahneman and knetsch s j environ econom manage 22 1 57 well known experimental results kahneman and knetsch contend that it seems highly implausible that this minor procedural change would significantly alter results p 61 but do not test this assertion we present experimental and field tests of the impact upon contingent values of varying the visible choice set through stepwise and advance disclosure these dimensions of design are interacted with changes in the order in which nested goods are presented bottom up versus top down when a stepwise disclosure procedure is adopted the observed scope sensitivity is substantially and significantly affected by the order in which goods are presented but such procedural variance is not observed within advance disclosure designs conjectures regarding the origin and implications of such findings are presented

valuing an eu animal welfare label using experimental auctions the aim of this article is to determine consumers valuation for an eu animal welfare eu caw label for products providing higher animal welfare standards than the current legal requirements using revealed preference data from random nth price auction mechanism and two auction procedures our results generally suggest that consumers are willing to pay a premium for an eu animal welfare eu caw label for cured ham this finding is consistent in both the endowment and full bidding auction approaches we employed in our experiments conducted in spain the average premium that consumers are willing to pay for a cured ham with the eu caw label ranges between 19 and 23 of the average price of the regular cured ham that is currently available in supermarkets

the magnitude of menu costs direct evidence from large u s supermarket chains we use store level data to document the exact process of changing prices and to directly measure menu costs at five multistore supermarket chains we show that changing prices in these establishments is a complex process requiring dozens of steps and a nontrivial amount of resources the menu costs average 105 887 year per store comprising 0 70 percent of revenues 35 2 percent of net margins and 0 52 price change these menu costs may be forming a barrier to price changes specifically 1 a supermarket chain facing higher menu costs due to item pricing laws that require a separate price tag on each item changes prices two and one half times less frequently than the other four chains 2 within this chain the prices of products exempt from the law are changed over three times more frequently than the products subject to the law in principle fixed costs of changing prices can be observed and measured in practice such costs take disparate forms in different firms and we have no data on their magnitude so the theory can be tested at best indirectly at worst not at all alan blinder 1991 p 90

how people respond to contingent valuation questions a verbal protocol analysis of willingness to pay for an environmental regulation abstract this paper investigates what a respondent is thinking when answering a willingness to pay question in a contingent valuation using a think aloud technique from psychology called verbal protocol analysis the willingness to pay responses we observed seem to be constructed from a variety of considerations including an obligation to pay a fair share of the cost of the solution and signaling concern for a larger set of environmental issues the finding that respondents seem to construct their values at the time they are asked rather than reporting a more well defined value is seen as consistent with over two decades of research on the psychology of decision making potential uses of verbal protocols in contingent valuation studies are also discussed

the national system of innovation in historical perspective contrary to some recent work on so called globalisation this paper argues that national and regional systems of innovation remain an essential domain of economic analysis their importance derives from the networks of relationships which are necessary for any firm to innovate whilst external international connections are certainly of growing importance the influence of the national education system industrial relations technical and scientific institutions government policies cul tural traditions and many other national institutions is fundamental the historical examples of germany japan and the former ussr illustrate this point as well as the more recent contrast between east asian and latin american countries introduction the national system of friedrich list according to this author s recollections the first person to use the expression national system of innovation was bengt ake lundvall and he is also the editor of a highly original and thought provoking book 1992 on this subject however as he and his colleagues would be the first to agree and as lundvall himself points out the idea actually goes back at least to friedrich list s conception of the national system of political economy 1841 which might just as well have been called the national system of innovation the main concern of list was with the problem of germany overtaking england and for underdeveloped countries as germany then was in relation to england he advocated not only protection of infant industries but a broad range of policies designed to accelerate or to make possible industrialisation and economic growth most of these policies were concerned with learning about new technology and applying it the racialist and colonialist overtones of the book were in strong contrast to the inter nationalist cosmopolitan approach of the classical free trade economists and list s belief that holland and denmark should join the german bund and acquire german nationality because of their descent and whole character reads somewhat strangely in the european community of today nevertheless despite these unattractive features of his outlook he clearly anticipated many contemporary theories after reviewing the changing ideas of economists about development in the years since the second world war the world bank 1991 concludes that it is intangible investment in knowledge accumulation which is decisive rather than physical capital investment as was at one time believed pages 33 35 the report cites the new growth theory

accumulation innovation and catching up an extended cumulative growth model this paper presents an extended model of cumulative growth in which the effects of innovation and catching up are considered innovation adds another source of cumulative growth to that of traditional models and allows a consideration of the importance of non price determinants of international competitiveness catching up is the major force leading to convergence in productivity owing to the effect of the diffusion of technology the model allows one to analyse whether cumulative forces may lead to stable growth and whether this solution generates convergence in productivity levels the structural model is tested for a set of oecd countries over the period 1965 94

a structural economic dynamics approach to balance of payments constrained growth this paper derives a balance of payments equilibrium growth rate analogous to thirlwall s law from a pasinettian multi sector macrodynamic framework the resulting formula which we call the multi sectoral thirlwall s law asserts that a country s growth rate of per capita income is directly proportional to the growth rate of its exports with such a proportionality being inversely directly related to sectoral income elasticities of demand for imports exports these income elasticities are weighted by coefficients that measure the share of each sector in total imports and exports respectively it is shown that several theoretical empirical and policy implications can be drawn from such a structural economic dynamics approach to balance of payments constrained growth

schumpeter meeting keynes a policy friendly model of endogenous growth and business cycles this paper studies an agent based model that bridges keynesian theories of demandgeneration and schumpeterian theories of technology fueled economic growth we employ the model to investigate the properties of macroeconomic dynamics and the impact of public polices on supply demand and the fundamentals of the economy we find profound complementarities between factors influencing aggregate demand and drivers of technological change that affect both short run fluctuations and longterm growth patterns from a normative point of view simulations show a corresponding complementarity between keynesian and schumpeterian policies in sustaining long run growth paths characterized by milder fluctuations and relatively lower unemployment levels the matching or mismatching between innovative exploration of new technologies and the conditions of demand generation appear to suggest the presence of two distinct regimes of growth or absence thereof characterized by different short run fluctuations and unemployment levels

economic valuation by the method of paired comparison with emphasis on evaluation of the transitivity axiom the paired comparison pc method is used to investigate reliability transitiv ity and decision time for binary choices among goods and sums of money the pc method reveals inconsistent choices and yields individual prefer ence order over the set of items being compared the data reported support the transitivity as sumption and demonstrate high reliability for individual preference order the paper also discusses using the pc method to obtain conser vative median and mean estimates of willingness to accept compensation for public and private goods the pc method may prove useful for valu ing public goods and warrants further study jel 426

pigs and guinea pigs a note on the ethics of animal exploitation discussions of the morality of animal exploitation must deal with the fact that these activities result in animal populations that would not otherwise exist in this paper simple economic models of animal using food production and research are combined with explicit ethical criteria that are sensitive to animal well being and numbers the authors show that when animal exploitation is morally acceptable lack of regulation results in too many food animals and research that is too animal intensive in addition nonmarket control through bills of rights for farm animals and research practice standards is necessary for ethical optimality copyright 1992 by royal economic society