some empirical evidence on the effects of shocks to monetary policy on exchange rates this paper investigates the effects of shocks to u s monetary policy on exchange rates we consider three measures of these shocks orthogonalized shocks to the federal funds rate orthogonalized shocks to the ratio of nonborrowed to total reserves and changes in the romer and romer index of monetary policy in sharp contrast to the literature we find substantial evidence of a link between monetary policy and exchange rates specifically according to our results a contractionary shock to u s monetary policy leads to i persistent significant appreciations in u s nominal and real exchange rates and ii significant persistent deviations from uncovered interest rate parity in favor of u s interest rates

do liberal cities limit new housing development evidence from california traditional explanations for why some communities block new housing construction focus on incumbent home owner incentives to block entry local resident political ideology may also influence community permitting decisions this paper uses city level panel data across california metropolitan areas from 2000 to 2008 to document that liberal cities grant fewer new housing permits than observationally similar cities located within the same metropolitan area cities experiencing a growth in their liberal voter share have a lower new housing permit growth rate

the effect of land use regulation on housing and land prices abstract this paper investigates the effects of land use regulation restrictiveness on house and vacant land prices in contrast to prior studies the index of restrictiveness is treated as an endogenous variable and estimated effects are allowed to vary by market setting using data on more than 100 florida cities greater regulation restrictiveness is found to increase house price and decrease land price evidence is also provided showing that more restrictiveness increases the size of newly constructed homes

coordination problems in local level resource management starting from the observation of important returns to scale effects in conservation of common property resources we identify some of the factors that impinge upon the chances of success of a decentralized group based management of local natural resources particular attention is paid to the influence of asset inequality among resource users in particular it is shown that by redistributing incentives among landowners land reform has an ambiguous impact on the latter s willingness to undertake conservation investments

complementarities of innovation activities an empirical analysis of the german manufacturing sector abstract innovation strategies in manufacturing often involve internal rd it is based on data from the german part of the community innovation survey cis 3 the results provide evidence for significant complementarities between internal r d and r d cooperation but cast doubt on the complementarity of internal and contracted r d since a productivity effect on firms patenting probability or sales with new products cannot be found

causes of sprawl a portrait from space we study the extent to which u s urban development is sprawling and what determines differences in sprawl across space using remote sensing data to track the evolution of land use on a grid of 8 7 billion 30 30 meter cells we measure sprawl as the amount of undeveloped land surrounding an average urban dwelling the extent of sprawl remained roughly unchanged between 1976 and 1992 although it varied dramatically across metropolitan areas ground water availability temperate climate rugged terrain decentralized employment early public transport infrastructure uncertainty about metropolitan growth and unincorporated land in the urban fringe all increase sprawl

technology imports and r d efforts of korean manufacturing firms abstract this paper analyzes the relationship between technology imports and r d efforts of korean manufacturing firms by a two stage method in the first stage using a sample representing the whole population of firms the paper shows that firms importing technology tend to commit themselves to r d efforts through having formal r d institutes in the second stage it shows that among firms with formal r d institutes technology imports have non complementary relationship with r d efforts moreover when technology imports are considered interactively with international inventive activity they turn out to have rather a substitutive relationship with r d efforts

the time varying nairu and its implications for economic policy the nairu the unemployment rate consistent with a constant rate of inflation is estimated in this paper as a parameter allowed to vary over time value is determined in an econometric model where the inflation rate depends on its past values demand and supply shocks the nairu estimated for the gdp deflator varies over the past forty years within 5 4 to 6 5 percent its estimated value for the most recent quarter 1996 q2 is 5 6 percent the nairu has declined in recent years in response to global competition immigration other factors weakening labor s bargaining position and the rapidly declining prices of computers and other electronics

is there complementarity or substitutability between internal and external r d strategies abstract the various strands of extant empirical research are inconclusive about the complementarity or substitutability between different innovation mechanisms such as internal and external r d using a panel sample of 83 incumbent pharmaceutical firms covering the period 1986 2000 our empirical analysis suggests that instead of a clear cut answer to the question of whether internal and external r d are complementary or substitutive innovation activities there appears to be a contingent relationship between internal and external r d strategies in shaping a firm s innovative output the results from our study indicate that the level of in house r d investments which is characterized by decreasing marginal returns is a contingency variable that critically influences the association between internal and external r d strategies in particular internal r d and external r d through either r d alliances or r d acquisitions are complementary innovation activities at higher levels of in house r d investments whereas at lower levels of in house r d efforts internal and external r d turn out to be substitutive strategic options

measuring innovative performance is there an advantage in using multiple indicators abstract the innovative performance of companies has been studied quite extensively and for a long period of time however the results of many studies have not yet led to a generally accepted indicator of innovative performance or a common set of indicators so far the variety in terms of constructs measurements samples industries and countries has been substantial this paper studies the innovative performance of a large international sample of nearly 1200 companies in four high tech industries using a variety of indicators these indicators range from r d inputs patent counts and patent citations to new product announcements the study establishes that a composite construct based on these four indicators clearly catches a latent variable innovative performance however our findings also suggest that the statistical overlap between these indicators is that strong that future research might also consider using any of these indicators to measure the innovative performance of companies in high tech industries

a literature based innovation output indicator abstract this paper presents an application of a recently developed method for measuring innovative activity in a national economy based on new product announcements in trade and technical journals the literature based innovation output indicator is not meant to capture all aspects of innovation or to substitute for other indicators but is seen as a useful addition to the range of indicators available the method is described in detail and then applied to the uk a sample of 941 innovations is constructed and then subjected to analysis the results suggest that the method is a useful and relatively reliable way of measuring the degree of radicalness of innovations being generated and of surveying their distribution across sectors across firm size and across firms which are uk owned or foreign owned the method captures product innovations well but captures process innovations less well the results for the uk suggest that the more radical innovations come disproportionate from companies based outside the uk innovations originating inside the uk are skewed towards product differentiation there is also some evidence that smaller companies produce a slightly higher than average share of the more radical innovations the paper suggests that this small scale testing of this indicator has produced promising results and that there would be benefits to the policy community from establishing it on a permanent basis

strategic control of growth in a system of cities abstract this paper provides an analysis of the supply restriction model of growth controls growth controls in such a model harm consumers while enriching landowners and they will only be adopted if landowners have political power in the model this power is manifested in the city government s use of a social welfare that takes both landlord and consumer welfare into account since cities cannot be small if the supply restriction inherent in growth controls is to have an impact strategic interactions must be considered in the analysis of city choices a general model is presented and an extended example based on leontief preferences is then considered comparative static analysis of nash equilibria in the leontief case shows that perturbations of preferences or other characteristics of a single city can have important spillover effects that alter the choices of all cities in the region

fiscal policy under new labour this paper seeks to provide an evaluation of fiscal policy under new labour in the decade from its election in may 1997 to date it begins with a brief review of macroeconomic performance over that period it outlines the main features of the approach of the labour government to fiscal policy including the golden rule of public finance and provides a critique of that rule and the general approach to fiscal policy it considers how far the policy rules have been observed in practice finally it argues that the relative macroeconomic stability since 1997 has not resulted from the fiscal policy pursued but rather that changes in the fiscal stance have fortuitously offset variations in private expenditure

why firm size matters investigating the drivers of innovation and economic performance in new zealand using the business operations survey abstractthe performance of the new zealand nz economy is something of an enigma although ranked one of 144 countries for four important growth fundamentals nz is middle of the pack when it comes to economic growth productivity and process innovation using four iterations 2005 2007 2009 and 2011 of the business operations survey this research seeks to shed some new light on this conundrum by using a multivariate probit regression mvprobit approach applied to pooled samples in excess of 22 000 unit record observations of nz firms the results suggest that factors including firm size high perceived quality investment research and development rd while many external issues such as those related to geography market structure business environment have little influence at the firm level innovations in nz are highly dependent on the fi

the innovative performance of in house and contracted r d in terms of patents and utility models abstract the standard empirical framework for analysing the r d patents relationship is widened both by examining the different role of in house and contracted r d in the innovative performance of firms and by considering patents and utility models counts as measures of innovation output patents and utility models are considered to approximate for significant and incremental innovations respectively applying count data econometrics to a panel data set of spanish manufacturing firms surveyed in the period 1990 1996 a transcendental production function is estimated which allows for non constant elasticities of the r d inputs the results indicate that significant innovations are mainly gestated in house whereas contracted r d seems more orientated towards innovations of incremental nature

the propensity to patent abstract this paper analyzes the relationship between 1974 rd among the exceptions the tendency was toward diminishing returns variables measuring overseas sales federal r d support diversification scope of invention use and invention type had only modest explanatory power there was no significant evidence of disproportionate patent accumulation in the more highly concentrated industries

on the political economy of zoning abstract households choose a community in a metropolitan area and collectively set a minimum housing quality and a property tax to finance a local public good the collective imposition of a lower bound on housing consumption induces an income stratified equilibrium in a specification where meaningful community differentiation would not arise without zoning we show computationally that zoning restrictions are likely to be stringent with a majority facing a binding constraint in communities that permit it by inducing a stratified equilibrium zoning causes tiebout welfare gains in aggregate but with large welfare transfers relative to stratified equilibrium without zoning the zoning equilibrium is significantly more efficient as it reduces housing market distortions

joint r d in low carbon technology development in china a case study of the wind turbine manufacturing industry abstract china faces the dual challenges of climate change and increased energy demand these challenges in turn increase the demand for wind energy development along with rapid growth in manufacturing capacity chinese companies have aspired to increase their innovation capacity in order to enhance their competitiveness in the market joint research and development r d is an attractive path for chinese companies striving to advance their r d capacity this paper examines joint r d between chinese wind turbine manufacturing companies and foreign design firms assessing the performance of joint r d activities in china using the structure conduct performance scp framework the study found that joint r d has improved chinese companies technical capacity human resources and financial growth however the effect on chinese companies innovation capacity is still limited because of unequal technical capacities of the two sides in collaboration as well as their preference for augmenting profits rather than technical capacity current joint r d mode is only the extension of licensing mode in wind turbine manufacturing industry

expansionary zoning and the strategic behaviour of local governments this paper analyses the extent to which local land supply is the result of strategic interaction among nearby local governments in a setting of limited tax instruments to raise revenues and interj

what percentage of innovations are patented empirical estimates for european firms abstract a 1993 survey on the innovative activities of europe s largest industrial firms obtained useable results on patenting activities for 604 respondents the data are used to calculate the sales weighted propensity rates for 19 industries the propensity rates equal the percentage of innovations for which a patent application is made the propensity rates for product innovations average 35 9 varying between 8 1 in textiles and 79 2 in pharmaceuticals the average for process innovations is 24 8 varying from 8 1 in textiles to 46 8 for precision instruments only four sectors have patent propensity rates for both product and process innovations combined that exceed 50 pharmaceuticals chemicals machinery and precision instruments regression results that control for the effect of industry sector show that patent propensity rates increase with firm size and are higher among firms that find patents to be an important method for preventing competitors from copying both product and process innovations the effect of secrecy is not so straightforward firms that find secrecy to be an important protection method for product innovations are less likely to patent as expected but secrecy has little effect on the propensity to patent process innovations the r d intensity of the firm has no effect on patent propensity rates for both product and process innovations the sector of activity has a strong influence on product patent propensities but very little effect on process patent propensities after controlling for the effect of other factors

the nature and role of monetary policy when money is endogenous this paper considers the nature and role of monetary policy when money is modelled as credit money endogenously created within the private sector there are currently two schools of thought that view money as endogenous one has been labelled the new consensus in macroeconomics and the other is the keynesian endogenous bank money approach the paper first explores the analysis of monetary policy in the new consensus macroeconomic model followed by an examination of the effectiveness of monetary policy in that analysis the keynesian view of endogenous money is discussed and the role for monetary policy in a keynesian endogenous monetary policy analysis is considered including discussion of the objectives and instruments of monetary policy copyright 2006 oxford university press

research expenditures and the discovery of new drugs this paper examines technical change in the ethical pharmaceutical industry a poisson specification is used to estimate a productivity relationship between research expenditures and drug discoveries thus taking into account the integer nature of the data the result s of estimations using panel data indicate that there is a positive c orrelation between a firm s research and development intensity and it s probability of discovering a new drug firm size however does not significantly affect the marginal productivity of research expenditu res finally the estimates show that an increase in regulatory strin gency decreases the expected number of new drug discoveries copyright 1987 by blackwell publishing ltd

identifying monetary policy in a small open economy under flexible exchange rates abstract previous empirical study on the effects of monetary policy shocks in small open economies has generated puzzling dynamic responses in various macroeconomic variables this paper argues that these puzzles derive from an identification of monetary policy that is inappropriate for such economies to remedy this it is proposed that a structural model be estimated to explicitly account for the features of the small open economy such a model is applied to canada with tightly estimated results overall the dynamic responses to the identified monetary policy shock are consistent with standard theory and highlight the exchange rate as a transmission mechanism

new macroeconomic consensus and inflation targeting monetary policy committee directors turnover in brazil abstract the main objective of this paper is to estimate a central bank reaction function that accounts for the effects of directors rotation of the brazilian copom monetary policy committee the reaction function proposed is assumed to be the mechanism for inflation targeting policy it accounts for the copom rotation to examine copom s policy credibility the empirical analysis use monthly data from 2001 to 2008 to estimate a structural vector auto regression svar in order to learn about the long run effects the svar results suggest that the turnover of the copom board of directors affects inflation expectation and interest rate of the brazilian economy in the long run this means that the turnover causes economic agents to increase their expectations about inflation resulting in increases of the rate of change of the interest rate level this break in credibility leads to an additional cost to society through higher future interest rates to be paid by government bonds

testing for strategic interaction among local governments the case of growth controls this paper helps to fill a gap in the public economics literature by providing empirical evidence on strategic interaction among local governments using the methodology of case et al journal of public economics 52 285 307 1993 the paper focuses on the adoption of growth control measures by cities in california and looks for evidence of policy interdependence in these choices the data are drawn from an elaborate survey of growth control practices in california cities conducted by glickfeld and levine regional growth local reaction lincoln institute of land policy cambridge ma 1992 the survey results are used to compute an index of the stringency of growth controls in each city which serves as the dependent variable for the study

imitation costs and patents an empirical study it has long been recognised that the costs of imitating new products have an important effect on the incentives for innovation in a market economy as arrow i962 and others have pointed out if firms can imitate an innovation at a cost that is substantially below the cost to the innovator of developing the innovation there may be little or no incentive for the innovator to carry out the innovation in their discussions of the innovation process economists frequently have called attention to the major role played by the costs of imitation but there has been little or no attempt to measure these costs to test various hypotheses concerning the factors influencing them or to estimate their effects in this paper we report some findings of what seems to be the first study of this topic in addition we present data regarding the effects of patents on imitation costs and on the rate of innovation

macroeconomic constraints to growth of the brazilian economy diagnosis and some policy proposals the recent accelerated expansion of the brazilian economy from 2004 to 2007 was driven by exports and gross fixed capital formation although this pace of growth is more robust than it was in the 1990s we can still witness the presence of macroeconomic constraints to its continuation in the long term such as the exchange rate overvaluation particularly since 2005 and in general the modus operandi of monetary policy such constraints may jeopardise the sustainability of the current pace of growth we argue that brazil still lies in a trap made up of high interest and low exchange rates the elimination of the exchange rate misalignment would bring about a large increase in the rate of interest which in turn would impact negatively upon investment and hence upon long term growth we indicate a set of policy measures to eliminate such a trap in particular the adoption of an implicit exchange rate target capital controls and the substitution of the present regime of inflation targeting with a double mandate regime where monetary authorities must pursue two objectives i e output stabilisation and inflation control recent events seem to go in this direction

risky innovation the impact of internal and external r d strategies upon the distribution of returns a b s t r a c t external innovation increases the profits of the median firm but also increases dispersion and the kur tosis of the distribution of profits this means that external strategies are risky and may require a very large number of attempts before average returns are obtained this puts smaller firms into a position of disproportionately high risk despite the earlier evidence that the rewards from innovation are positively skewed we find no effect of innovation strategies upon the skewness of the distribution of firms profits

theoretical reflections on endogenous money the problem with convenience lending this paper questions the practice of representing the endogenous money supply by means of a horizontal money supply curve implicitly contrasted with the conventional vertical stock supply curve what is drawn as a horizontal curve is strictly a locus between a continually shifting stock curve and a shifting demand curve consequently demand for money considerations have been suppressed in the horizontal presentation one response is that the resulting deposits are automatically held through some process such as convenience lending however the argument behind convenience lending points to the conclusion that it is changes in relative interest rates that reconcile the demand for additional loans with the demand for additional deposits c 1996 academic press limited copyright 1996 by oxford university press

estimates of the effectiveness of monetary policy this paper examines various interest rate rules as well as policies derived by solving optimal control problems for their ability to dampen economic fluctuations caused by random shocks a tax rate rule is also considered a multicountry econometric model is used for the experiments the results differ sharply from those obtained using recent models in which the coeffi cient on inflation in the nominal interest rate rule must be greater than one in order for the economy to be stable

appropriate intellectual property protection and economic growth in countries at different levels of development this paper examines how the role of patents and utility models in innovation and economic growth varies by level of economic development using a panel dataset of over 70 countries we find that patent protection is an important determinant of innovation and that patentable innovations contribute to economic growth in developed countries but not in developing instead in developing economies a minor form of intellectual property rights iprs namely utility models is conducive to innovation and growth controlling for other factors using korean firm level data as a case study we find that utility model innovations contribute to firm performance when firms are technologically lagging and that those minor innovations can be a learning device and thus a stepping stone for developing more patentable inventions later on upon reaching higher levels of technological capabilities firms become more reliant upon patents and less on utility models thus the lesson here is that patent protection enhances innovation and economic growth in countries where the capacity to conduct innovative research exists where this capacity is weaker a system that provides incentives to conduct minor incremental inventions is more conducive to growth the significance of this paper is to emphasize the importance not just of the strength of iprs but of the appropriate type of iprs for economic development

developing countries imports of technology in house technological capabilities and efforts an analysis of the indian experience abstract this paper examines whether enterprises decisions to import technology are influenced by their in house technological capabilities and whether the imports subsequently lead to an increase in the r d intensities it is argued that in a competitive market situation these decisions could be linked in a sequential relationship but protectionist regulatory policies may make such a relationship quite unlikely empirical tests with data of indian enterprises in the electrical and electronic industries circa 1990 found results consistent with the predictions for the protected regulatory situation

choosing among alternative technological strategies an empirical analysis of formal sources of innovation abstract this work aims to offer a detailed conceptual and empirical analysis of the inter firm differences in deciding the composition of their technological efforts using data for spanish firms in the period 1990 1996 the study begins with the standard analysis of the determinants of innovative investment then moves on to the less analysed question of the determinants of the generate versus import alternative and ends with a novel analysis of the characteristics which lead firms to organise research internally as compared to the possibility of contracting r d services externally in contrast to standard practice the econometric approach takes into account the existence of non linearities in the used data the results obtained support the conceptual ideas on which they are based

liquidity preference in a portfolio framework and the monetary theory of kahn this paper examines the relation between variations in the propensity towards liquidity preference price adjustment and shifts in portfolio allocation by expanding kahn s idea of marginal equilibrium under strong uncertainty in financial markets and contributes to recent post keynesian attempts to develop a liquidity preference theory of asset prices by providing an analysis of the price adjustment mechanism the notion of the own rate of money interest is utilised to develop a multi asset liquidity preference framework which is consistent with uneven variations of liquidity premia across assets in response to changes in the degree of strong uncertainty that is specific to different investors with variable allocation of assets in their portfolios more specifically in the context of this portfolio framework it is established that an increase in the state of strong uncertainty state of bearishness makes less liquid assets further less inconvenient than more liquid assets in periods characterised by greater strong uncertainty equilibrium is restored through a greater demand for more liquid assets including money relative to the demand for less liquid assets and therefore through a higher own rate of money interest for less liquid assets than warranted which shows the ineffectiveness of standard monetary policy

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

towards an accounting view on money banking and the macroeconomy history empirics theory in this paper three views are considered which are traditionally associated with money cranks and brave heretics the first is that the credit nature of money has macroeconomic significance the second is that financial development can be bad for economic growth the third is that macroeconomic models need to be explicitly monetary macroeconomic models it is argued that in each of these three areas there has been a recent shift in mainstream economic opinion this suggests new opportunities for meaningful debate between heterodox and orthodox schools on money and finance it is further argued following skaggs 2003 that a common meeting ground could be an accounting view of economics this is a mode of macroeconomic analysis which explicitly uses accounting definitions identities that credit is also debt or that flows of a variable affect the stock of that variable or accounting methods e g decomposing different kinds of liabilities or linking flows of liquidity to flows of transactions to structure and direct the analysis the accounting view is highly pluralist yet clearly defined i discuss its applications to each of the three views

evidence on the role of cash flow for investment abstract recent work in macroeconomics argues that imperfections in capital markets may lead to business cycle fluctuations by propagating relatively modest shocks evidence for such a mechanism also known as the financial accelerator consists largely of firm level studies showing that cash flow is an important predictor of investment but this evidence is often viewed with skepticism because cash flow is also a good indicator of investment opportunities in this paper we develop a framework for estimating the extent to which the predictive power of cash flow can be attributed to its role as a fundamental versus its role in alleviating credit frictions for firms with access to commercial paper and bond markets we find that the perfect capital markets model of investment can fully account for the role of cash flow for firms with only limited access to capital markets as indicated by lack of participation in public debt markets however investment appears to be excessively sensitive to fluctuations in cash flow these results thus clarify the role of cash flow in investment equations and provide support for the existence of a financial accelerator

corporate structure liquidity and investment evidence from japanese industrial groups this paper presents evidence suggesting that information and incentive problems in the capital market affect investment we come to this conclusion by examining two sets of japanese firms the first set has close financial ties to large japanese banks that serve as their primary source of external finance and are likely to be well informed about the firm the second set of firms has weaker links to a main bank and presumably faces greater problems raising capital investment is more sensitive to liquidity for the second set of firms than for the first set the analysis also highlights the role of financial intermediaries in the investment process

internal r d expenditures and external technology sourcing abstract the paper examines the two way relationship between external r d activities and internal r d expenditures on a cross section of flemish r d active companies the analysis extends the classical explanatory variables like size diversification ownership structure and technological opportunities to include the impact of various external sourcing strategies r d cooperation and to a lesser extent r d contracted out are found to have a significant positive effect on internal r d but only if the companies have absorptive capacity in the form of a full time staffed r d department at the same time firms are found to be more frequently engaged in r d cooperation the more they spend on internal r d

analyzing literature based innovation output indicators the italian experience abstract this paper presents the results of a study on the product innovations introduced in the italian market in 1989 and reported in a selected number of trade journals the analysis of data collected by means of this literature based counting procedure confirms that r d oriented industries and large firms do not in italy have a marked competitive advantage in innovation the country appears to be instead characterized by a significant presence of consumer goods industries and small firms in innovation our data indicate a statistically significant association between trade competitiveness and strength in product innovation and show the comparatively higher capacity for product innovation of some of the industries in which italy achieves a positive performance in international trade moreover the presence of spillovers at the regional level from both private and public r d expenditures proves to be positively correlated with the development of product innovations finally small firms with fewer than 50 employees appear to be more innovative than is usually believed to be the case