virtual special issue editorial essay the shitty rent business what s the point of land rent theory in this introduction to a virtual special issue on land rent we sketch out the history of land rent theory encompassing classical political economy marx s political economy the marginalist turn and subsequent foundations for urban economics and the marxist consensus around rent theory during geography s spatial turn we then overview some of the contemporary strands of literature that have developed since the break down of this consensus namely political economy approaches centred on capital switching institutionalism of various stripes and the rent gap theory we offer a critical urban political economy perspective and a particular set of arguments run through the review first land is not the same as capital but has unique attributes as a factor of production which require a separate theorisation second since the 1970s consensus around land rent and the city dissipated the critical literature has tended to take the question of why how the payment exists at all for granted and so has ignored the particular dynamics of rent arising from the idiosyncrasies of land amongst the talk of an anthropocene and planetary urbanisation it is surprising that the economic fulcrum of the capitalist remaking of geography has fallen so completely off the agenda it is time to bring rent back into the analysis of land cities and capitalism

innovation and social probable knowledge in this paper some elements of keynes s theory of probability are used to under stand the process of diffusion of an innovation based on work done elsewhere it is argued that this process can be viewed as a process of dealing with the collective uncertainty about how to sort out a technological problem expanding the concepts of weight of argument and probable knowledge to deal with this kind of uncertainty we argue that the concepts of social weight of argument and social probable know ledge can be very helpful in understanding the process of diffusion of an innovation

the hidden persuaders institutions and individuals in economic theory in his classic book the hidden persuaders vance packard claimed that large corporations manipulated consumers using advertising techniques john kenneth galbraith and others have repeated a similar view against this gary becker and george stigler have claimed that advertising is essentially informative rather than manipulative in contrast it is argued here that both of these opposed accounts of human agency neglect the more subtle and undesigned processes by which institutions bear upon and mould individuals this paper proposes a concept of reconstitutive downward causation in which institutions act upon individual habits and dispositions the mechanisms involved do not fall foul of past critiques of holism or methodological collectivism this argument involves a rehabilitation of the concept of habit in social science with far reaching implications

exploring the notional property developer as a policy construct this paper explores how far policy makers understand the structure of the development industry the perceived characteristics of developers and the extent to which such actors can be considered policy responsive if these matters are poorly understood the effectiveness of planning policy may be undermined especially where the private sector is responsible for undertaking most development the paper is based upon empirical research on the scottish executive s perceptions of and policy stances towards developers between 1999 and 2007 it finds that the executive appeared to have only limited understanding of what drives the development process or motivates individual developers and seemed unfamiliar with important differences within the industry sectorally and geographically instead the notional property developer was incorrectly conceived as a malleable and potentially compliant partner with shared objectives to the state the paper calls for a more thorough understanding of the development industr

the role and behaviour of commercial property investors and developers in french urban regeneration the experience of the paris region summary this paper provides an analysis of the factors underlying private investment decisions concerning property development with specific reference to urban regeneration in the french context it is based on the results of a behavioural survey and mca analysis of the behaviour patterns and motivations of active private investors and developers in the french commercial property markets and their involvement in french urban regeneration initiatives the pattern of investment and development activity over the 1997 2002 french property market recovery period has been studied and a typology of actors set up based on their investment policy for these property markets the findings indicate that property investors in urban regeneration essentially seek speculative developments and short term investments

monetary policy and inventory investment in greek manufacturing industry the paper reports an attempt to estimate the role of greek monetary policy in inventory investment in manufacturing interest and inflation rate expectations exercise a significant influence expected fluctations in the exchange rate for the first time examined are of major importance especially for stocks of raw materials which are mostly imported being strongly affected by monetary variables inventory investment can play a major role as a transmission channel of monetary policy changes to the greek economy

inventories and interest rates a critique of the buffer stock model economists generally test for the effect of interest rates on inventories by including some measure of the real interest rate in a standard flexible accelerator buffer stock model this paper presentsseveral reasons for concluding that this approach is incorrect and demonstrates how interest rate effects can be introduced into decisionrules derived under the assumption of optimizing behavior by firms decision rules for finished good inventories output and price are estimated using monthly observations on the food and kindred product industry the results generally conform to the predictions of the theory copyright 1986 by american economic association

a note on the econometric use of constant dollar inventory series abstract one dollar of finished goods inventories does not represent the same amount of physical goods as one dollar of sales when department of commerce constant dollar series are used this can cause seriously biased regression estimates

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

the real estate markets players institutions and territories revealing the parties the processes and the institutions and consequently both the diversity and contingency of the real estate markets the existing increasing literature emphasises the contemporary numerous links and interdependencies between real estate land value planning and town planning policy and even the financial system this paper is an attempt to understand all the real estate markets from the most peripheral ones where the urban rent is the lowest to the most dense city centres to gain a better understanding of the real estate market a process of firstly deconstruction and then reconstruction is used the process of deconstruction involves identifying various market trends according to property type principally residential buildings players and institutions territorial situations and temporalities based on research conducted in switzerland we then developed a meta synthesis inspired by fernand braudel whose works put as much emphasis on day to day economic activity as on long term activity and on local as well as global issues

cooperation through imitation and exclusion in networks we develop a simple model to study the coevolution of interaction structures and action choices in prisoners dilemma games agents are boundedly rational and choose both actions and interaction partners via payoff biased imitation the dynamics of imitation and exclusion yields polymorphic outcomes under a wide range of parameters whenever agents hold some information beyond their interaction neighbors defectors and cooperators always coexist in disconnected components otherwise polymorphic networks can emerge with a center of cooperators and a periphery of defectors any stochastically stable state has at most two disconnected components simulations confirm our analytical results and show that the share of cooperators increases with the speed at which the network evolves increases with the radius of interaction and decreases with the radius of information

institutions in british property research a review this paper surveys approaches to the study of institutions as used in recent commercial property research in britain institutional analysis can be approached from mainstream economics power str

land use planning and the housing market a comparative review of the uk and the usa this paper provides a review of some of the key articles and research examining the relationship between planning regulation and its impact on the housing market in the uk and the us in both count

presidential address antitrust restrictions on single firm strategies this article offers an overview of selected developments in the law and economics of antitrust regulation of single firm strategies the strategy generating the most cases historically is resale price maintenance here the law has moved sharply in both canada and the u s towards more solid economic foundations yet a gap between the law and economics remains the economics of resale price maintenance is reviewed within a framework that is much simpler and more general than the existing literature the law on a second strategy predatory pricing represents in my view a success story for the influence of economic theory in spite of the absence of a single accepted theory of predatory pricing the remaining single firm strategies are concerned largely with the exclusion by a dominant firm of rivals from a market i review with application to cases the two most basic questions concerning exclusionary strategies are exclusionary anticompetitive contracts ever entered into voluntarily by market participants on the other hand is complete or substantial foreclosure of a market through exclusionary strategies necessarily anticompetitive cette allocution presidentielle a l association canadienne d economique presente une vue d ensemble des developpements dans le droit et l economie de la reglementation antitrust sur les strategies d une firme unique la loi sur la strategie qui genere historiquement le plus de cas le maintien du prix de revente a change dramatiquement au canada et aux etats unis et derive vers une politique qui a des assises economiques solides mais il reste un ecart entre le droit et l economie on reexamine l economie du maintien du prix de revente a l aide d un cadre d analyse qui est a la fois plus simple et plus general que ce qui existe dans la litterature specialisee la loi pour ce qui est d une seconde strategie prix d eviction est a mon avis une grande reussite pour la science economique malgre l absence d une seule theorie du prix d eviction generalement acceptee un troisieme ensemble de strategies concerne l exclusion de ses rivaux d un marche par la firme dominante l auteur reexamine avec un recours extensif aux cas les deux questions de base pour ce qui est des strategies d exclusion est ce que les participants sur un marche entrent jamais volontairement dans un arrangement contractuel qui exclut et est anticoncurrentiel d autre part est ce que la saisie complete ou substantielle d un marche par des man uvres d exclusion est necessairement anticoncurrentielle

economic cosmology and the evolutionary challenge abstract the intellectual histories of economics and evolutionary biology are closely intertwined because both subjects deal with living complex evolving systems because the subject matter is similar contemporary evolutionary thought has much to offer to economics in recent decades theoretical biology has progressed faster than economics in understanding phenomena like hierarchical processes cooperative behavior and selection processes in evolutionary change this paper discusses three very old cosmologies in western thought how these play out in economic theory and how evolutionary biology can help evaluate their validity and policy relevance these cosmologies are 1 natural man as a rational self sufficient egotistical individual 2 competition among individuals can lead to a well functioning society and 3 there exists an ideal optimal state of nature these correspond to colander et al 2004 holy trinity of orthodox economics rationality greed and equilibrium it is argued below that current breakthroughs in evolutionary biology and neuroscience can help economics go beyond these simple cosmologies

the production and inventory behavior of the american automobile industry understanding inventory movements is central to an understanding of business cycles this paper presents an empirical study of the behavior of inventories in the automobile industry it finds that inventory behavior is well explained by the assumption of intertemporal optimization with rational expectations the underlying cost structure appears to have substantial costs of changing production as well as substantial costs of being away from target inventory thelatter being a function of current sales given this cost structure whether inventory behavior is stabilizing or destabilizing depends on the characteristics of the demand process in the automobile industry inventory behavior is destabilizing the variance of production is larger than the variance of sales

does land property structure affect local development patterns evidence from a greek tourist area this paper attempts to clarify the institutional context and local framework of landed property relations in the local development patterns of a rural space converted into an urban tourist resort on the island of rhodes greece through the diachronic analysis of cadastral data on land property ownership and non market land property transfers and acquisitions direct and indirect state policies land property structures inherited from the past formal and informal institutions enabled agents to establish enterprises of varying types and size socially dispersed landownership is a structural resource that through agency influences local development patterns and land property is repeatedly implicated in the local production and reproduction system

the impacts of international tourism demand on economic growth of small economies dependent on tourism abstract this paper studies the impacts on economic growth of a small tourism driven economy caused by an increase in the growth rate of international tourism demand we present a formal model and empirical evidence the ingredients of the dynamic model are a large population of intertemporally optimizing agents and an ak technology representing tourism production the model shows that an increase in the growth of tourism demand leads to transitional dynamics with gradually increasing economic growth and increasing terms of trade in our empirical application an econometric methodology is applied to annual data of antigua and barbuda from 1970 to 2008 we perform a cointegration analysis to look for the existence of a long run relationship among variables of economic growth international tourism earnings and the real exchange rate the exercise confirms the theoretical findings

costly information and the evolution of self organization in a small complex economy abstract the core idea of evolution is that order in living systems emerges from a simple process of variation and selection in biological systems we usually understand the source of variation as best described by the mechanisms of genetics if human social systems are evolutionary systems however it would seem the variation that most explains the sources of change in these systems occurs not from a genetic mechanism but from individual learning we use an evolutionary computational methodology to explore the way individual learning and adaptation lead to the evolution of persistent self organized social and economic activity the basic idea behind these explorations is that the character and extent of self organizing social and economic activity depends upon the way the environment frames the costs of individual learning and adaptation we consider three different kinds of costs affecting learning and adaptation the costs of autonomous searching of communicating and of deciding individuals respond to these costs by carefully i e economically choosing to learn about and interact with familiar agents in familiar arenas in which they have relatively secure expectations about the outcome of their actions emerging from these choices are persistent relationships among agents that lead to social and economic structure and to the imperfect coordination of aggregate production the character and the extent of each are a function of the way the costs of information change with changing natural and human system conditions we use a learning classifier system lcs to model learning the logic of an lcs closely mimics the mechanisms of darwinian evolution but is applied to the evolution of an agent s decision rules we describe the environmental context necessary for an lcs to produce economizing behavior and apply the method to a multi agent simulation of the maine lobster fishery which we treat as a metaphor for competition based on the search for useful knowledge the structure and method of the model is similar to a conventional agent based model except we use lcs to evolve decision rules for each agent rather than supplying those rules ourselves this allows agents to change their behavior i e to learn and adapt as their environment changes modeling learning and adaptation as the source of behavioral variation makes it possible to use evolutionary theory to address important questions of social and economic emergence not possible with current methods

institutions in theories of land markets illustrated by the dutch market for agricultural land theories of land markets should be intellectually sound and should be able to explain and predict market outcomes such as price and volume of transactions changes in these and locations of different land uses theories based on neo classical economics which largely ignore the role of institutions are not intellectually sound because it is known that markets cannot work without institutions nor do these theories predict outcomes satisfactorily moreover they assume market mechanisms and do not investigate them critically this paper explores how institutions may be taken into account in theories of land markets and whether that leads to better theories both of market outcomes and of market processes new institutional economics provides the tools to investigate how the interactions between market actors are influenced by institutions and the old institutional economics emphasises how institutions influence the motivations and preferences of those actors the conclusion is that there cannot be a general theory of land markets only theories with a limited applicability and scope such theories can be used to explain the effects of small changes and to predict the effects of marginal changes in institutions in that latter use these theories can be used for designing land policy how institutions can be incorporated into theory is illustrated by analysing the dutch market for agricultural land this shows how institutions affect the outcomes in that market and the consequences for the transformation of land from agriculture to urban use

the economics of organization the transaction cost approach the transaction cost approach to the study of economic organization regards the transaction as the basic unit of analysis and holds that an understanding of transaction cost economizing is central to the study of organizations applications of this approach require that transactions be dimensionalized and that alternative governance structures be described economizing is accomplished by assigning transactions to governance structures in a discriminating way the approach applies both to the determination of efficient boundaries as between firms and markets and to the organization of internal transactions including the design of employment relations the approach is compared and contrasted with selected parts of the organization theory literature

information as a substitute for inventories abstract in recent years the ratio of inventories to sales in north american manufacturing has fallen without the offsetting increases in unfilled orders or price variation that are predicted by some theoretical models the explanation offered here is that in the face of falling relative costs of communications firms will substitute information for inventories thereby allowing their production systems to absorb a greater part of demand shocks the implicit hypothesis that the demands for communications and inventories are therefore determined simultaneously is tested with data on canadian inventories and on telecommunications between canada and europe and is not rejected

social capital economic growth and regional development iyer s kitson m and toh b 2005 social capital economic growth and regional development regional studies 39 1015 1040 this paper examines the relationships between social capital economic performance and regional development and it stresses the complexity and variability across space of such relationships in contrast to the conventional macroeconomic approach of using indicators of social capital in formal growth models what is required is a more nuanced analysis that evaluates the impact of social capital by region to support this argument the paper examines social capital data from the social capital community benchmark survey 2000 which provides social capital data for more than 24 000 individuals living in 40 communities grouped into nine regions in the usa these data show remarkable diversity of social capital by region multivariate analysis is used to examine the impact of economic and social determinants of social capital and shows that education is important for nearly all ind

investment in finished goods inventories an analysis of adjustment speeds it is well known that fluctuations in inventory investment are a major source of fluctuations in gross national product this has stimulated numerous empirical studies designed to understand the causes of changes in inventory investment these studies include those for example michael lovell that utilize a flexible accelerator model of inventory behavior as well as those for example david belsley that utilize the linear decision rule approach to optimal inventory holding the latter approach however can be interpreted in terms of a flexible accelerator model see j c r rowley and p k trivedi for a survey of the literature recently several authors for example martin feldstein and alan auerbach observed that these studies yield very implausible empirical results the basic difficulty is that the estimates of the speed with which firms close gaps between desired and actual inventory stocks are very low often the estimated speed of adjustment is less than 10 percent per quarter as feldstein and auerbach stress this is extremely implausible when even the largest swings in inventories in a given quarter amount to less than one day s production the purpose of this paper is to undertake an analysis of adjustment speeds for finished goods inventory investment in our empirical work we utilize a modified flexible accelerator model of inventory investment 1 like the conventional flexible accelerator the model permits firms to close a fraction of the gap between desired and actual inventories in any period the relevant fraction is of course the adjustment coefficient and it may vary in principle between zero and unity our model differs from the conventional model in assuming that the desired stock of finished goods inventories depends on the normal levels of exogenous variables that firms must forecast to make decisions on inventory holdings these include not only the normal level or orders or demand which is a standard explanatory variable in the empirical literature but also the normal levels of real factor input prices and real interest rates in addition we permit the normal levels to change relatively slowly in response to changes in past levels of orders real factor input prices and real interest rates our objective is to investigate whether the slow adjustment speeds that have been estimated in the literature are due to the use of models which contain an incomplete menu of exogenous variables to determine desired inventories and pay inadequate attention to lags in the adjustment of normal levels of exogenous variables

diaspora interest in homeland investment this paper examines four diaspora communities resident in the united states that were targeted by their homelands as foreign investors during the 1990s the homelands comprise armenia cuba iran and palestine we pose the question what are the determinants of interest in homeland investment and can they be generalized across the four communities the paper explores concepts of ethnic advantage altruism homeland orientation and perceptions of business impediments as well as investigating the role of demographic factors regarding investment interest

a microsimulated model of inventories in interfirm competition abstract producers management of inventories of finished goods are studied with a computer simulation that depicts the interactions of a group of firms with their customers customers give orders that have a random component to their current customary suppliers and will attempt to switch to another firm if stockouts cause bad service the firms are shown experimenting to find rules of inventory management that avoid loss of customers yet incur low costs average inventories and costs under the rules that firms arrive at rise non linearly with the variance of customer orders the simulated firms respond to higher interest rates by substantial cuts in average inventories held the costs firms incur when changing the level of production also affects the rule that firms select unless firms are able to take advantage of each others experience wide variation in behavior among firms is likely under such a scenario

evolution as a general theoretical framework for economics and public policy abstract economic and evolutionary thinking have been entwined throughout their histories but evolutionary theory does not function as a general theoretical framework for economics and public policy as it does for the biological sciences in this lead article for a special issue of the journal of economic behavior and organization we first describe how evolution functions as a general theoretical framework in the biological sciences then we consider four reasons why evolution might not need to be consulted for human related subjects such as economics and public policy we conclude that these reasons can be valid in particular cases but they fail for any sizeable human related subject area hence evolution can and should become a general theoretical framework for economics and public policy the other articles in the special issue help to substantiate this claim

the rise of economics in competition policy a canadian perspective competition policy in canada and elsewhere has changed remarkably over the last 50 yearsin large measure due to advances in economics in this article we trace the impact of developments in industrial organization on the three central areas of competition policy cartels single firm conduct and mergers we focus on canadian competition policy but draw comparisons with developments in the united states and europe

a theoretical framework for the functioning of the dutch property market in this article a theoretical framework will be presented to aid understanding of the functioning of property markets more particularly the dutch property market it will be argued that traditional urban economic theories are not able to explain the structure and processes of the built environment in the dutch case we are confronted with two problems first to find a way in which urban economic theories designed for a context of cities in great britain and the us can be used to explain urban development that takes place in the different context of dutch cities and secondly to formulate a set of hypotheses appropriate for the dutch property market the hypotheses concern the strategies of individual actors on the property market and the underlying factors it is concluded that in general the relation between institutional structure and property development has been neglected both because of insufficient attention from economic scientists and because empirical research is very complicated

inventories and risk in african manufacturing using a panel data set for zimbabwe which includes firm specific measures of contractual risk we show that contractual risk has a major effect on the holding input stocks and to a lesser extent the constitution of cash reserves this is consistent with inventories being a hedge against stockout risk by contrast firms facing more inter annual market risk hold less inventories this suggests that african manufacturers prefer adapting to long term market fluctuations as they materialise rather than building up inventories this interpretation is consistent with the finding that high market risk firms also have a low capacity utilisation rate

scale of hospitality firms and local economic development evidence from crete the hospitality industry generates benefits for many host communities including employment generation and foreign exchange earnings however the hospitality industry often leads to external dependency contributing to a loss of local control over resources migrant workforce and leakages outside the local economy seriously reducing industry s potential for generating net financial advantages and growth for the local economy despite the variation of size of hospitality firms there is still limited research on how well different size hospitality firms contribute to local economic development something which this paper addresses taking as a case the island of crete the findings suggest that the smaller the size of hospitality firm the larger the benefits to the local economy

real interest rates and macroeconomic activity while standard discussions of the transmission mechanism of monetary policy tend to assume a strong and negative link between real interest rates and real macroeconomic activity and this appears to some extent to be borne out by simulation of large scale macroeconometric models the empirical evidence suggests that the link between real interest rates and macroeconomic aggregates such as consumption and investment is in fact somewhat tenuous the weak link between interest rates and aggregate consumption may be explained at a theoretical level while the apparently weak link between interest rates and investment is more puzzling although it may be related to neglect of issues such as uncertainty and the irreversibility of investment in empirical studies similarly evidence on the link between real interest rates and economic growth is mixed and this may be related to non linearities in the relationship the survey highlights the need for further research in this area