firm optimism and pessimism abstract this paper explores the question of whether firms have systematic expectation biases using microdata from the west german manufacturing subset of the ifo business climate survey we infer quarterly production growth rates at the firm level we then combine this information with production growth expectations over a quarterly horizon to construct quantitative firm specific expectation errors our findings show that at most one third of our firms systematically over or underpredict their production growth one quarter ahead our findings further show that larger and exporting firms tend to have more realistic expectations while firms with higher leverage are more prone to expectations that are biased towards optimism

learning in expectation formation with applications to cattle and beef exports the paper briefly considers problems associated with rational expectations and formulates a more general model which allows for situations where economic agents do not immediately arrive at a fully rational solution it incorporates a learning mechanism whereby agents can provisionally adopt hypothetically derived expectations as a basis for comparison with the actual outturns utilizing the resultant past expectational errors as indicators of the likelihood of prospective future outcomes agents make explicit allowance a rational solution thus in situations where complete information is not freely available rationality would be approximated over time by means of a dynamic learning process which is founded on a firm empirical approach this essential empiricism requires that the problem be examined on the basis of direct observation of applied situations therefore the method is implemented and analysed with reference to irish foreign trade in fat cattle carcase and processed beef simultaneous equati

an empirical model of labor supply in a life cycle setting this paper formulates and estimates a structural intertemporal model of labor supply using theoretical characterizations derived from an economic model of lifetime behavior a two step empirical analysis yields estimates of intertemporal and uncompensated substitution effects which provide the information needed to predict the response of hours of work to life cycle wage growth and shifts in the lifetime wage path

income redistribution an international perspective many view global income inequality as a problem income redistribution from the rich countries to poor countries is often offered as a solution however such redistribution would have to be politically acceptable to voters in rich countries to occur using a constructed distribution of world income we show that even modest income redistribution efforts would impose significant costs on taxpayer voters in rich countries we conclude such income redistribution is unlikely

the marginal cost of redistribution lifetime and annual perspectives approximately 40 of federal government expenditures are spent on redistributing income from high income households to low income households 20 293 changing income redistribution policies causes distortions which affect the efficiency of resource allocation costs caused by these distortions are an important consideration in determining redistribution policies and practices previous studies such as browning and johnson 5 looked at the marginal cost of redistribution using annual income data however as is shown in this article using annual rather than lifetime income data greatly understates the marginal cost of redistribution the time period is an important consideration when calculating the marginal cost of redistribution over a lifetime a person may be a young student expecting a higher future income be retired having had a higher income in the past be changing jobs or recently divorced lifetime income includes these age and transitory differences in earnings and thus if we are concerned about the cost of decreasing inequality lifetime income is more accurate also the relevant time period partly depends on the capability of households to even out income fluctuations by spreading income from good to bad times upper income groups find it easier to spread income by borrowing or waiting until income rises again while lower income groups find it more difficult to borrow or wait if we are measuring the number of people in poverty and poor people find it difficult to spread income from good to bad periods the relevant period of time may be about a week but using a week for upper income groups would be misleading as many would appear poor but not face the difficulties of the poor if most people can average their income then the annual distribution of income is more appropriate than weekly however because of the above mentioned age and transitory differences in income annual income may also be misleading people are affected differently in different years by the tax transfer system in some years a person may receive transfers and in others pay taxes since households live their lives rather than a single year under the tax transfer system well being is more accurately described on a lifetime basis lifetime income gives a more accurate picture of households chances in life and of the degree of economic inequality in this article the annual and lifetime marginal costs of redistribution are calculated by a simulation that uses a lifetime dynamic labor supply model a linear income tax type of redistri

patterns of technological competence accumulation a proposition for empirical measurement this article develops a typology that describes and measures different types of technological competence accumulation the notion of accumulation comprises not only the state but also the change in competence and hence it complies with the criticism of the static approaches to competence management the typology of competence accumulation enables a comparison of firm profiles that lead to identification of four groups of firm behavior across the telecommunications industry the relationship between the firm and the industry level is established on the condition that each firm s competence level depends on the firms mutual relationships with other firms in the same industry known as red queen evolution the four groups of firm behaviour are therefore not considered as groups of independent firms that are similar by coincidence but as patterns of behavior within the telecommunications industry which allows for a discussion of more general implications for management of technology copyright 2005 oxford university press

price and demand expectations in the swedish manufacturing industry the purpose of this analysis is to test the rational expectations re hypothesis on the basis of a quite unique data set of swedish manufacturing firms price and demand expectations the data are qualitative and consist of responses from approximately 1 700 firms to questions regarding the actual and expected development of their own prices and demand since the data are qualitative the standard technique of regression analysis cannot be used instead the tests are based on measures of association for contingency tables and on estimation of log linear models for qualitative variables similar techniques have been used in studies on expectation formation in germany and france see konig et al 1981 nerlove 1983 kawasaki and zimmermann 1986 and zimmermann 1986 the concept of rational expectations is discussed in section ii the data are described in section iii the tests are presented in section iv and the results of the tests are reported in section v section vi contains the main conclusions

manufacturers expections of prices and quantities new zealand experience 1964 87 most empirical work on expectations has focused on price expectations this paper extends that work by evaluting the properties of manufacturers expectations of a range of nominal and real variables the data for this study consist of individual firm responses to the new zealand institute of economic research s quaterly tendency survey over an unusally long period of 24 years from 1964 to 1987 measures of accuracy bias and effiency are constructed and the results indicate that the properties fo expectations differ across variables and conclusions drawn from empirical studies of price expectations should not be generalized manufacturers are more accurate at forecasting changes in prices than quantities the mainstream rational expectations hypothesis is rejected for most of the quantity variables but the case for rejection was not so clear for expectations of prices and costs the results are consistent with the view that price expectations behave more like plans than forecasts firms views about co

testing the rationality of inflation expectations derived from survey data a structure based approach following the inspiration of muth 21 expectations are said to be rational if the subjective probability distribution of expected outcomes coincides with the objective probability distribution of actual outcomes in practical applications however it is common to employ the so called weak form version of this hypothesis which defines rationality as equality between the expected outcome and the objective mathematical expectation conditional on all data available at the time the expectation is formed thus expectations of inflation are said to be weakly rational in muth s sense if

on the marginal welfare cost of taxation this paper develops a rigorous partial equilibrium analysis of the determinants of margin al welfare cost mwc of taxes on labor earnings it shows that four key parameters interact to determine the magnitude of mwc using aggregate data and plausible ranges of values for the parameters mwc can vary from under 10 percent to more than 300 percent of marginal tax revenue intermediate parameter values sugge st mwc is in the 25 50 percent range however the more extreme estimates cannot be ruled out on the basis of available evidence suggesting that mwc cannot yet be copyright 1987 by american economic association

schumpeterian dynamics some methodological notes abstract the main purpose of this paper is to define schumpeterian dynamics and to indicate how it can serve as a basis and starting point for studies in development economics irrespective of how schumpeter used his general approach and what kind of hypotheses he launched schumpeterian dynamics is characterized by its focus on economic transformation this implies that the main interest is in causal chains outside the scope of macroeconomic growth analyses namely in disequilibria and chain effects created inter alia by entrepreneurial activities market processes and competition as a dynamic force the micro underpinnings of such analyses therefore differ from those of growth models which deal with aggregates such as investments and saving productivity income distribution wage shares in value added and capital output ratios seen through schumpeterian glasses the micro units have no well defined generalizable propensities and they are not fully informed calculators reacting in a mechanical way to prices that they cannot influence instead firms continuously seek new information and often search for projects which if carried out exert transformation pressure on the markets consumers can also actively influence firms and markets and do not only passively react to supply prices transformation analyses should not replace macroeconomic growth models but a change of roles is called for such analyses have too long and too often been regarded as empirical complements to growth analyses and therefore as belonging mainly to the domain of economic historians the stress on complement instead of alternative implies that some sort of a synthesis should be sought in theoretical as well as in empirical research

differing patterns of industrial dynamics new zealand ohio and sweden 1978 1994 new zealand ohio and sweden have experienced sharply divergent macroeconomic developments since the early 1970s during the 1980s new zealand went from being the most heavily regulated and protectionist oecd country to one of the least regulated and most open economies in the world ohio suffered severe economic downturns when its major industries steel automobiles and machinery went through devastating crises since then a major restructuring has taken place and manufacturing output exports and employment have generally grown faster than in the united states as a whole sweden had an outstanding industrial growth record for several decades until the mid 1970s but then suffered economic setbacks from which it has not yet fully recovered industrial output declined for several years resumed growth in the early 1980s but then stagnated again in the early 1990s

comments on monetary policy announcements and expectations evidence from german firms abstract enders et al 2019b find that small expansionary monetary policy surprises lead to increases in firms price and production expectations vice versa for small contractionary monetary surprises for larger monetary surprises of either direction the reaction of price and production expectations tends to be dampened back to zero this finding is explained with a differential size dependent mix in monetary policy surprises as regards their actual monetary policy content and their delphic information content about how the monetary authority views the state of the economy policy conclusions from this result for the conduct of monetary policy and its communication are discussed

lifetime and annual marginal costs of redistribution in england sweden and the united states both the annual and lifetime marginal costs of redistribution in england sweden and the united states are calculated the annual marginal cost of redistribution is 2 90 in the united states 3 53 in england and 6 77 in sweden the lifetime marginal cost of redistribution is 4 46 in the united states and 7 96 in england the lifetime marginal cost of redistribution in sweden indicates that additional redistribution reduces the incomes of both the poor and nonpoor this study also shows that when there is greater income equality the marginal tax rate at which the incomes of the poor and nonpoor begin to be reduced will be at lower and lower levels copyright 1993 by mit press

swedish tax rates labor supply and tax revenues effective marginal tax rates on labor income for the representative swede have increased from roughly 50 percent in 1959 to 80 percent today the effects of this increase in the level of taxation are examined using a two sector model parameterized to correspond to the swedish economy the model contains a single household which allocates labor to either taxed essentially market or untaxed largely household uses the estimated long run effects are sufficient to explain up to 75 percent of the recent decline in the measured growth rate of the swedish gnp calculations of total tax revenues are also derived from the model these peak when the tax rate is approximately 70 percent indicating that sweden is presently on the downward sloping portion of its laffer curve

the content of productivity growth in swedish manufacturing abstract it is hardly surprising that the slowdown in economic growth throughout the industrial world in the last decade has attracteda lot of attention by economists the decline in productivity growth has been a special object of study however the causes of this decline still largely remain a mystery in the present paper it is suggested that a more micro based approach to the problem than the conventional macro oriented growth accounting method yields additional insights a methodology is outlined which can at least complement the conventional approach and which is specially designed to open the way for micro analysis of productivity change without losing sight of the macro side this is done by first breaking down total factor productivity growth through disaggregation to lower and lower levels of observation in order to separate out structural from purely technical changes then framework is presented for analyzing how productivity changes at the micro level can be aggregated to the macro level the results emphasize the importance of economies of scale and resource allocation

tax revenue and the marginal cost of public funds in sweden abstract we assess the welfare cost of raising a marginal unit of tax revenue in a balanced budget general equilibrium framework the calculated social cost of an increment of public funds is sensitive to both the specific type of tax increase and the type of public spending used on the margin best guess assumptions on labor supply elasticities yield marginal costs of public funds for different fiscal mixes of between 0 67 and 4 51 at prevailing tax rates in sweden alternative labor supply assumptions well within the range of current estimates substantially affect the results and can imply infinite marginal welfare costs marginal welfare costs are also sensitive to assumptions about both the income and substitution effects of labor supply

the trade off between equality and efficiency this paper uses a 1976 microdata base to estimate the marginal cost of reducing income inequality with a policy that has distributional effects similar to the present tax transfer system the analysis uses a simulation methodology in which only the labor supply effects are evaluated other behavioral effects are ignored the most striking finding is that marginal cost is quite high even for modest labor supply elasticities for example in the benchmark case with a weighted average economy wide uncompensated wage elasticity of 0 2 and compensated elasticity of 0 31 the disposable money income of upper income quintiles of households is depressed by 9 51 for each dollar increase in the disposable money income of lower income quintiles when income equivalent values that take account of the value of leisure are compared the marginal cost for this case is estimated to be 3 49

industrial dynamics and economic geography capasso m stam e and cefis e industrial dynamics and economic geography regional studies how do industries emerge and evolve over space in this special issue the fields of industrial dynamics and economic geography are brought together in order to achieve a richer and more fundamental understanding of the organization of industries over time and space than each of these fields could do separately firm heterogeneity at the micro level and industry composition of a region at the macro level provide important elements in the explanation of industry emergence and evolution over space history and space matter in the evolution of industries this special issue shows how and why