approximating wtp and wta for environmental goods from marginal willingness to pay functions abstract willingness to pay wtp and willingness to accept wta for a change in the quantity of an environmental good can be represented by corresponding hicksian welfare measures the paper suggests a simple method of approximating wtp and wta given the information about the marginal willingness to pay mwtp for it it demonstrates that a polynomial based on the mwtp function allows to approximate the hicksian measures which may differ considerably much better than consumer s surplus in quantity space

a market discovery algorithm to estimate a general class of nonparametric choice models we propose an approach for estimating customer preferences for a set of substitutable products using only sales transactions and product availability data the underlying demand framework combines a general nonparametric discrete choice model with a bernoulli process of arrivals over time the choice model is defined by a discrete probability mass function pmf on a set of possible preference rankings of alternatives and it is compatible with any random utility model an arriving customer is assumed to purchase the available option that ranks highest in her preference list the problem we address is how to jointly estimate the arrival rate and the pmf of the rank based choice model under a maximum likelihood criterion since the potential number of customer types is factorial we propose a market discovery algorithm that starts with a parsimonious set of types and enlarge it by automatically generating new types that increase the likelihood value numerical experiments confirm the potential of our proposal for a realistic data set in the hospitality industry our approach improves the root mean square errors between predicted and observed purchases computed under independent demand model estimates by 67 to 93 this paper was accepted by serguei netessine operations management

single crossing random utility models we propose a novel model of stochastic choice the single crossing random utility model scrum this is a random utility model in which the collection of preferences satisfies the single crossing property we offer a characterization of scrums based on two easy to check properties the classic monotonicity property and a novel condition centrality the identified collection of preferences and associated probabilities is unique we show that scrums nest both single peaked and single dipped random utility models and establish a stochastic monotone comparative result for the case of scrums

balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 1988 balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 applied economics vol 20 no 12 pp 1635 1642

intellectual property technological advantage and trade performance of uk manufacturing industries the technological advantage of advanced countries is often cited as a potential source of comparative advantage in world trade although with internatonal mobility of capital this may not be sufficient to retain domestic production net trad volumes for a panel of uk manufacturing industries are investigated using two measures of industry specific technological advantage one absolute innovations and one relative patents it is demonstrated that the determining factors of uk manufacturing trade performance do include technological advantage an all manufacturing estimate of trade determination is derived which could be of use in forecasting by pooling industry level data however it is shown that using a single data panel makes it difficult to produce a statistically acceptable equation because the underlying industry parameters vary considerably across the panel separate technology sub group estimates of the impact of innovation on net trade volumes are also derived which are more statistically acc

stochastic revealed preference and the theory of demand this paper extends the deterministic revealed preference theory of consumers behavior to permit stochastic choices in this extended framework we introduce a restriction on stochastic choices that constitutes a stochastic counterpart of the weak axiom of revealed preference this restriction allows us to derive stochastic versions of nonpositivity of the own substitution effect and the demand theorem journal of economic literature classification number number d11

ex ante consumer welfare evaluation in cost benefit analysis abstract public projects and policies are normally evaluated ex ante i e while consumers may still be uncertain about future prices income levels interest rates and preferences this paper extends the theory of ex ante consumer welfare evaluation by developing a 2 period model with multiple sources of uncertainty it provides insights into the influence of temporal uncertainty on the empirical measurement of ex ante willingness to pay

the impact of technology and structural change on export performance in nine developing countries summary this paper focuses on nine large developing countries structural decomposition analysis shows that they tend to concentrate innovative activities in industries stagnating at the world level international trends partly offset national improvements in patent shares the same occurs for world export shares although countries display greater adaptation to world demand econometric analysis suggests that technological activity is related to export gains in high technology sectors if a country expands in industries with increasing technological opportunities in medium technology sectors if it moves away from low opportunity sectors in low technology sectors if it is initially specialized in growing sectors in high tech and low tech sectors export performance is also affected by the growth of technical capabilities foreign direct investments productivity and the initial level of technical skills and in medium tech by the growth rates of foreign direct investments

employment and structural impacts of material efficiency strategies results from five case studies abstract in order to come up with a sound assessment of the effects of material efficiency innovations on growth employment and competitiveness different economic mechanisms have to be considered from a methodological point of view the analysis must be able to account for technology specific aspects the employment impacts of five innovations are analyzed plastic and paper recycling increased life span of automobiles car sharing and bio based products time horizons for all strategies are scenarios until 2020 the economic impacts are context specific with regard to innovation technology and country the economic impacts highlight substantial structural adjustments the overall economic net impact on employment tends to be neutral to positive stronger positive economic impacts result if first mover advantages can be established

growth and the external constraint lessons from the spanish case the present article attempts to determine the role played by the balance of payments constraint on economic growth in spain 1960 94 using cointegration techniques this empirical exercise also serves to reveal some shortcomings in the usual procedures for estimating thirlwall s law in particular the spanish case reveals how important it is to introduce a variable that expresses the competitiveness gains generated by improvements in quality of the goods and services into the export function it also demonstrates the inadequate simplification entailed in an a priori exclusion of relative prices in external equilibrium equation not taking these two aspects into consideration may give rise to an erroneous confirmation of thirlwall s law especially if as in the spanish case both effects offset each other finally if the aim is to analyse long term relationships between variables it would seem advisable to use procedures such as cointegration with variables in levels

the fruits of intellectual production economic and scientific specialisation among oecd countries this paper brings together data from 14 oecd countries on scientific publications patents and production specialisation to explore the relationship between economic and production specialisation for 17 manufacturing sectors since marx there has been a fundamental debate in economics about the link between science and the economic system marx argued that the developments in the science system are strongly influenced by changes in the economic sphere whereas polanyi argued that developments in science are largely independent of economic sphere using a panel data model and econometric estimations at the sectoral level the paper assesses the two positions and finds considerable support for marx s position that is that scientific and production specialisation are often tightly linked

skills and changing comparative advantage using u s input output data for the period 1947 1996 and dictionary of occupational titles skill scores i find that u s exports have a high content in cognitive and interactive skills relative t

the 45 rule revisited the purpose of this note is to update and reconsider the 45 rule or thirlwall s law by applying cointegration techniques to export equations based on national accounts data for 16 countries the income demand elasticities derived on this basis are fairly close to those found earlier whereas the relative price elasticities are much lower with the marshall lerner condition satisfied for only few of the 16 countries more important to the validity of the 45 rule is that the conditions for cointegration are not satisfied suggesting that the equations are misspecified and that current external accounts are non stationary when analysing this issue further it appears that the reasons for the apparent breakdown of the 45 rule can be traced to developments in the 1970s and 1980s when countries were exposed to major changes in their terms of trade and real effective exchange rates

is there persistence in the growth of manufactured exports evidence from newly industrializing countries abstract applying cointegration techniques in a panel data setting we document persistent growth of manufactured exports from certain developing countries to complement the investigation of persistence measured by the country fixed effects we analyze asymmetries in income elasticities for all developing countries the decline in exports with world income contraction is sharper than is the rise on the upswing the decline is however especially pronounced for countries with low or negative persistence the results are consistent with long term buyer supplier relationships that create insiders and outsiders in manufactured goods trading exports are also influenced by the transactional infrastructure proxied by telecommunications penetration

balance of payments constrained growth a rejoinder to professor thirlwall professor thirlwall has argued that the growth rate of a country is constrained by the requirement that the external current account must broadly balance he maintains that a country s growth can be analysed using a dynamic harrod trade multiplier and that a country s long run growth rate y will approximate to the ratio of the rate of growth of exports x to the income elasticity of demand for imports a in a recent article in this journal mcgregor and swales 1985 doubts were expressed about the theoretical and empirical grounds on which thirlwall makes these claims in his reply thirlwall argues that such doubts are unfounded he clarifies his theory on a number of points he argues that his theory was subjected to inappropriate empirical tests and whilst accepting that equation 1 can be derived from a strict neoclassical model he invites the reader to choose between the plausibility of the neoclassical story as against the keynesian alternative

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

unilateral climate policy and competitiveness economic implications of differential emission pricing unilateral emission reduction commitments raise concerns on international competitiveness and emission leakage that result in preferential regulatory treatment of domestic energy intensive and trade exposed industries our analysis illustrates the potential pitfalls of climate policy design which narrowly focuses on competitiveness concerns about energy intensive and trade exposed eite branches the sector specific gains of preferential regulation in favour of these branches must be traded off against the additional burden imposed on other industries beyond burden shifting between industries differential emission pricing bears the risk for substantial excess cost in emission reduction as policy concedes too low carbon prices to eite industries and thereby foregoes relatively cheap abatement options in these sectors from the perspective of global cost effectiveness we find that differential emission pricing of eite industries hardly reduces emission leakage since the latter is driven through robust international energy market responses to emission constraints as a consequence the scope for efficiency compared to uniform pricing is very limited only towards stringent emission reduction targets will a moderate price differentiation achieve sufficient gains from leakage reduction to offset the losses of diverging marginal abatement cost

embracing model uncertainty strategies for response pooling and model averaging econometricians modeling stated preference sp data and most other types of data are confronted with the uncomfortable reality that our knowledge of the true model is limited with only certain variables suggested by the application at hand and general classes of functional forms and error structures suggested by the literature accepting our limited knowledge we pursue strategies for analyzing sp data that are more robust to uncertainties in our knowledge of the true model these include non parametric and parametric likelihood based tests of pooling responses from different elicitation formats and a frequentist based model averaging approach for estimating willingness to pay functions we argue that these strategies lead to increased econometric integrity and empower the ultimate users of models such as policy decision makers and even juries to better assess the robustness of the results we apply these approaches to an sp survey of saltwater angling in alaska which utilized split sample rankings and ratings elicitation methods while an important goal of our paper is to develop practicable modeling strategies that will ultimately lead to more robust conclusions and more confidence by the users of sp results an equally important goal is to engender a critical discussion of how we can make the analysis of sp data more robust

public and private returns from joint venture research an example from agriculture public research institutions are turning increasingly to the private sector for additional financial support such a trend in the short run lessens the need for public research expenditures but may in the long run prove to be very costly to the economy as a whole this is because private funding increases the chance that the direction of research will shift so that private benefits are enhanced such a shift is especially costly if public research funds are then not forthcoming that would have the potential of producing the maximum level of benefits to the economy as a whole a case study of canadian barley research is used to illustrate this problem

structural shifts in the manufacturing export performance of oecd economies summary this paper identifies structural shifts in manufacturing export performance of the major oecd economies the particular emphasis of this study is to see whether the longer run responses of a country s exports to the growth in world demand have undergone trend changes the econometric work focuses on the time variation in income elasticities from an export demand model over the period 1963 89 it thus covers a period in which there was a substantial slow down in world economic growth and in which the manufacturing sectors in advanced economies underwent substantial restructuring in the wake of the two oil price shocks and the competitive challenges of japan and the nics the exercise attempted to evaluate the relative successes and failures of the different oecd economies to maintain or improve their positions in the higher quality income elastic segments of world trade evidence was found for trend improvements in the income elasticity for uk exports from the early 1980s onwards and a trend decline for that of the us over the same period the effects of non tariff protection against japanese exports also showed up in our results and an attempt was made to separately identify its effects

on the meaning of economic efficiency in policy analysis there are crucial differences in the normative foundations of alternative economic cri teria used to assess the efficiency of policy pro posals differences between pareto and potential pareto measures are emphasized in this comparison of efficiency standards technical distinctions be tween these two criteria are examined and illus trated it is argued that potential pareto criteria have greater disciplinary acceptance than their nor mative foundations merit and further that the pareto measure has suffered undue criticism from association with its potential pareto namesake jel all

r d and manufacturing production specialization in developed economies a study of the relation between technology and manufacturing production specialization in a series of developed economies is performed by means of models relating indicators of revealed symmetric comparative advantage of value added and exports to similar measures of comparative performance of r d expenditure capital intensity total factor productivity and wage costs the production and r d specialization are shown to be substantial and sticky this contrasts with the evidence of a substantial degree of convergence in the patterns of the other variables regression estimates show that although all variables play their part the impact of comparative r d efforts on production specialization is by far the strongest this impact is found to be stronger in the smaller economies and it is especially important in research intensive industries the influence of comparative wages is moreover found to be positive here suggesting the dominance of a labour skill and efficiency wage effect over a wage cost comp

welfare measurement in the household production framework the household production approach to consumer behavior developed from the work of gary becker william gorman and kelvin lancaster has considerable descriptive appeal in modelling the decisions of households the approach derives from the observation that households frequently purchase market goods that do not yield utility directly but are combined to produce commodity service flows which the household values thus observed behavior is determined by household production technology as well as by tastes the advantage of this distinction is that we can pose reasonable hypotheses about characteristics of technology though we rarely possess useful a priori information regarding tastes the putative advantages of the household production approach are questioned on empirical and conceptual grounds by robert pollak and michael wachter 1975 they show that jointness in production or nonconstant returns to scale cause implicit commodity prices to depend on both tastes and technology raising serious econometric difficulties in the estimation of commodity demand functions in addition since commodity prices become functions of the commodity bundle consumed the analogy to traditional demand theory breaks down joint production occurs when a good enters several production processes simultaneously or equivalently when a good in one production process also enters directly into the individual s utility function the most common example is time which provides the context for all production processes and is often associated with the production of several commodities simultaneously since joint production in the household is likely to be pervasive the critique by pollak and wachter cannot be ignored in response to the comment by william barnett pollak and wachter 1977 suggest dispensing with the notion of commodity prices and treating the demand for commodities as a function of goods prices this approach confounds tastes and technology but it eliminates the troublesome concept of commodity prices as parameters when in fact they are likely to be endogenous in this paper we show that results from positive analysis such as the critique by pollak and wachter have implications for the use of the household production framework for welfare analysis the household production function approach has had considerable appeal for measuring welfare effects of public actions in the environmental and natural resource areas gardner brown john charbonneau and michael hay elizabeth wilman yet traditional approaches to welfare measurement are frequently inapplicable we argue that welfare measurement in this framework is complicated by the difficulties of unravelling tastes and technology we extend pollak and wachter s results by demonstrating that marshallian demand functions for commodities cannot be uniquely defined thus marshallian functions cannot be used to derive exact compensated functions in the manner of jerry hausman and of george mckenzie and i f pearce nor can compensating and equivalent variation measures be bounded by marshallian consumer s surplus estimates following robert willig in fact duality results that normally allow us to move between marshallian and hicksian functions are not assistant and associate professors respectively department of agricultural and resource economics university of maryland college park md 20742 this paper is scientific article no a3404 contribution no 6476 of the maryland agricultural experiment station we wish to thank darrell hueth james opaluch v kerry smith and elizabeth wilman for comments on an earlier draft

the role of technology in market shares dynamics the paper presents the estimation of an empirical model of market share dynamics for five industrialized countries and 18 industries the emphasis is put on the importance of non price factors of competitiveness whereas most traditional explanations rest on the influence of relative prices among the former type of factor the role of variables reflecting technological advantage is privileged in particular the role of innovations has received considerable attention in the literature on international trade as well as the literature on endogenous growth in this spirit the paper introduces patent counts and investment as explanatory variables for the export market share the results show that non price variables have an important impact on the determinations of long run competitiveness

thirlwall s law and balance of payments constrained growth more on the debate the various criticisms that have levelled against thirlwall s law by mcgregor and swales are examined it is shown that their arguments are untenable the relationship between the necolassical law of one price and thirlwall s law is clarified thirlwall s law is not overwhelmingly rejected by the evidence as mcgregor and swales assert their suppression of the influence of the price term on the estimates used in the test proposed by mccombie is inappropriate their regression analyis is also mid specified and a preferable specification provides no support for their conclusions they repeatedly argue that thirlwall s modele cannot account for changes in market shares and the that the estimated income elasticities of demand for exports and imports cannot capture the effects of non price competition this was shown to be erroneous by mccombie and the reasons advanced are further elaborated mcgregor and swales provide another interpretation of the relationship between thirlwll s law and the harrod foreign tr

shifting foundations of agricultural policy analysis welfare economics when risk markets are incomplete the neat alignment of resources output and prices specified by the perfect competition model is far from duplicated in free markets and the equally neat alignment assumed under the constraints of a program is not experienced when programs are in effect in particular areas under empirically determined supply curves are unlikely to represent opportunity costs the basic theory is invaluable in providing a conceptual orientation for the analysis of programs but the assumptions implicit in the literal use of simple forms of it for policy conclusions are breathtakingly heroic

technological competition and trade performance this paper estimates a demand system for oecd exports differentiated by country of origin for two isic industries non electrical machinery electrical machinery and for total manufacturing exports it develops a generalized form of the aids demand system in which research and development r d effort enters in a number of ways to affect a particular supplier s competitiveness r d activity relative to competitors affects on the one hand relative cost competitiveness and on the other hand the producer s position in the quality spectrum of products offered on international markets one of the interesting insights gained from the study is that effectiveness of r d effort can differ much across different economies it is conjectured that a country s position in an international catching up process may be partly responsible for such differences as well as labour market dynamics which link increased labour costs to cost and quality improvements

thirlwall law and balance of payments constrained growth further comment on the debate this paper reviews the debate that has occurred in applied economics over thirlwall s law mccombie 1989 mcgregor and swales 1985 1986 thirlwall 1986 the empired evidence concering the validity of the law is re assessed using a variety of tests including that suggested by mccombie 1989 and the new data set provided by bairam 1988 the law is overwhelmingly rejected by the evidence contrary to the conclusions of mccombie and bairam the rationale for the assumption of constant relative prices which is required to derive thirlwall s law is reconsidered the original law of one price rationale renders the approach incoherent the more recent rationale of sticky oligopolistic price improves the internal consistency of the model but necessitates consideration of non price competition however neither the theory underlying thirlwall s law nor empirical tests of the law property account for this in principle the law cannot be employed to distinguish between demanding constrained and supply co

the transformation of competitive advantage in east asia an analysis of technological and trade specialisation summary in recent years there has been considerable interest in the relationship between a country s export competitiveness and the role played by technology in strengthening and maintaining competitive advantage a central feature of recent empirical work mainly focused on the oecd countries has rested on examining patterns of export and technological specialization between economies and sectors this paper moves attention away from the advanced industrialized economies to examine the trends for trade and technological specialization among the east asian developing economies in particular two aspects of specialization are examined first to what extent have patterns of competitive advantage changed over time and second to measure the relationship between patterns of trade and technological specialization important differences are found in the patterns of specialization and in the relationship between them among the advanced east asian economies and those catching up

modelling the dynamics of market shares in a pooled data setting econometric and empirical issues the objective of this article is twofold first it is to study the applicability of the widely used autoregressive distributed lag model ardl in a pooled data setting second it is to analyse chile s market shares in the eu during the period 1988 to 2002 pointing to application problems that might jeopardize the model and searching for estimation methods that deal with the problem of inter temporal and cross sectional correlation of the disturbances to estimate the coefficients of the ardl model feasible generalized least squares fgls is utilized within the three stage least squares 3sls and the nonstandard generalized method of moments gmm frameworks a computation of errors is added to highlight the susceptibility of the model to problems related to the underlying model assumptions

industrial policy changes and firm level technological capability development evidence from northern brazil summary much has been written about the impacts of the policy changes of the 1990s on industrial performance particularly in latin america most of the studies are based on aggregated analyses that argue for or against such reforms in the policy regime this study offers an alternative view to this debate based on a longitudinal empirical scrutiny of technological capability development in 46 local and foreign firms from three sectors in northern brazil there were inter sector and inter firm variations in terms of the manner and rate of capability development for specific technical functions overall the patterns of firm level capability development exhibited a positive response to the structural reforms but such responses were not a mere consequence of trade openness a combination of government policy foreign competition and intra firm capability building efforts proved essential for speeding up capability development in some of the sampled firms thus policies for accelerating industrial technological capability development in a developing area such as the one examined here would involve not only macro level incentives and competition but very importantly measures that facilitate intra firm capability building efforts

measuring economic welfare new methods preface 1 an introduction to the money metric 2 the marginal utility of money as an integrating factor 3 calculation of the money metric 4 the approach of dupuit and marshall 5 the hicksian approach 6 approximations based on consumer surplus 7 a reconsideration of the theory of index numbers 8 the money metric as a basis for calculation of social welfare functions 9 measurement of the social costs of monopoly 10 a final comment and conclusion references index

the role of innovation in bilateral oecd trade performance this paper tests an empirical model of the determinants of bilateral oecd trade with particular emphasis on the role of innovation variation in the relationship across countries and sectors is analysed two innovation proxies and actual data on innovations are used a positive relationship is found between relative innovation and bilateral trade performance at an aggregate level and for a number of manufacturing sectors sectors are also categorized as either net users or producers of innovations differences in innovation appear to have more of an impact on trade performance for the net producers of innovations than the net users of innovations

dynamic logit with choice aversion we characterize a generalization of discounted logistic choice that incorporates a parameter to capture different views the agent might have about the costs and benefits of larger choice sets the discounted logit model used in the empirical literature is the special case that displays a preference for flexibility in the sense that the agent always prefers to add additional items to a menu other cases display varying levels of choice aversion where the agent prefers to remove items from a menu if their ex ante value is below a threshold we show that higher choice aversion as measured by dislike of bigger menus also corresponds to an increased preference for putting off decisions as late as possible

consumer s surplus without apology the purpose of this paper is to settle the controversy surrounding consumer s surplus and by so doing to validate its use as a tool of welfare economics i will show that observed consumer s surplus can be rigorously utilized to estimate the unobservable compensating and equivalent variations the correct theoretical measures of the welfare impact of changes in prices and income on an individual i derive precise upper and lower bounds on the percentage errors of approximating the compensating and equivalent variations with consumer s surplus these bounds can be explicitly calculated from observable demand data and it is clear that in most applications the error of approximation will be very small in fact the error will often be overshadowed by the errors involved in estimating the demand curve the results in no way depend upon arguments about the constancy of the marginal utility of income consequently this paper supplies specific empirical criteria which can replace the apologetic caveats frequently employed by those who presently apply consumer s surplus moreover the results imply that consumer s surplus is usually a very good approximation to the appropriate welfare measures to preview below i establish the validity of these rules of thumb for a

innovation and trade performance in the united kingdom a popular explanation for the u k s poor trade performance in the postwar period is that insufficient attention was paid to the quality of goods offered to consumers the authors explore the role of both price and quality factors in determining the net trade balances of a number of u k manufacturing and service industries particular attention is paid to the role of innovation used empirically as a proxy for product improvement the findings show considerable support for the view that an advanced industrial country like britain needs to continually upgrade its products to avoid erosion of its domestic and international market shares

european market integration through technology driven m as merger and acquisitions m as have been an important tool for reorganizing the european market since the establishment of european economic and monetary union this article suggests that european integration helped and encouraged european firms to source technology across national borders in europe establishing european innovative firms the figures confirm that once barriers impeding the free movement of capital goods and labour had fallen european firms used m as intensively to enter foreign european markets enhancing technology competencies is found to be one of the main motives for cross border acquisitions in the 1990s but is not a factor in domestic acquisitions over the same period

the consequences of mrs thatcher for u k manufacturing exports this article sets out to study whether the dramatic events that took place in the u k economy since 1979 can be shown to have had any effects on certain crucial parameters that determine the export performance of the u k manufacturing sector a number of export models are examined over the post 1979 period and all reveal a certain amount of systematic parameter variation in particular estimates of the world income elasticity of demand for u k manufacturing exports show an upward drift when this drift is explicitly modeled using a spline function approach to allow time varying parameters the data do not reject the hypothesis that this income elasticity has risen from its traditional postwar value of around 0 7 to around unity in 1986 this model is applied to explain export performance of both aggregate u k manufacturing as well as of individual manufacturing industries copyright 1989 by royal economic society

nonparametric welfare and demand analysis with unobserved individual heterogeneity abstract this paper combines revealed preference and nonparametric estimation techniques to obtain nonparametric bounds on the distribution of the money metric utility and demand functions over a population of heterogeneous households our approach is independent of any functional specification on the household utility functions our method applies the weak axiom of revealed preference to a population of heterogeneous households although this does not produce the sharpest bounds we show that it is computationally attractive and provides narrow bounds we demonstrate the usefulness of our results by applying it to the consumer expenditure survey a us cross sectional consumption data set jel codes d12 c14

international competitiveness in post keynesian growth theory controversies and empirical evidence a fundamental starting point for post keynesian theory concerning growth in open economies is succinctly expressed in the following statement by kaldor t he main autonomous factor governing both the level and the rate of growth of effective demand of an industrial country is the external demand for its exports and the main factor governing the latter is international competitiveness which in turn depends on the level of its industrial cost relatively to other industrial exporters kaldor 1971 p 7 italics added moreover thanks to increasing returns in manufacturing export expansion and international competitiveness would interact so as to create vicious or virtuous circles of cumulative causation a few years later kaldor having found a positive correlation between the time changes of the main industrial countries relative manufacturing export shares and that of their relative unit costs a correlation that became known as the kaldor paradox dismissed his original cumulative causation theory and adopted a version close to harrod s foreign trade multiplier the purpose of this paper is to reaffirm the kaldorian cumulative causation theory in its original version by providing a firmer analytical basis and showing that contrary to the kaldor paradox time changes in export performance must be explained by levels rather than by changes in unit costs

regional balance of payments problems an interpretation ho l s 1993 regional balance of payments problems an interpretation reg studies 27 457 466 this paper lays out a simple model and an accounting framework for analysing the relationship between different components of regional savings and investment between internal savings and external savings and between government sector savings and private sector savings in general stepping up investment to enhance regional growth must cause a deterioration of the regional trade balance in the short run even though the trade balance is likely to improve in the longer run analyses in recent years often ignore the effect of capital formation on trade as an example the german unification in requiring a rebuilding of capital stock suddenly rendered obsolete by a major change in relative factor prices requires a real appreciation of the dm and a deterioration of the german trade balance given nominal exchange rates this means higher german inflation than its trading partners on the other hand the pape

on the empirical content of quantal response equilibrium the quantal response equilibrium qre notion of mckelvey and palfrey 1995 has recently attracted considerable attention due largely to its widely documented ability to rationalize observed behavior in games played by experimental subjects we show that this ability to t the data as typically measured in this literature is uninformative without ap riori distributional assumptions a qre can match any distribution of behavior by each player in any normal form game we discuss approaches that might be taken to provide valid empirical evaluation of the qre and discuss its potential value as an approximating empirical structure

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

drivers of export demand a focus on the giips countries this study investigates the drivers of export demand in the peripheral economies of the euro area namely greece ireland italy portugal and spain giips for the period between 1980 and 2012 recently several authors have pointed out that changes in trade export shares are not associated with major terms of trade disturbances rather they are the result of other underlying factors commonly defined as non price competitiveness starting from this premise the study extends the traditional imperfect substitute trade model to include a measure of non price competitiveness real capital stock the latter is a measure of a country s total resource base and captures the presence of product differentiation and product innovation the results show a significant link between export demand and cumulative investments in the short term giips exports are dominated by the movements of worldwide real income while changes in price and non competitiveness take longer to affect export performance in the long run all three variables play a significant role in pushing exports

economic growth the harrod foreign trade multiplier and the hicks super multiplier as we saw in chapter 2 the post keynesian view of economic growth denies that the postwar economic performance of the majority of the advanced countries has been seriously constrained by the growth of factor supplies even during the long boom of 1950 73 when the growth of output of the advanced countries in aggregate was double that of the historic norm labour shortages were never a limiting factor there was either sufficient disguised unemployment in the non manufacturing sectors or enough immigration to satisfy the demand for labour kindleberger 1967 the rate of capital accumulation is never a long run constraint on economic growth as investment is as much a result of the expansion of output as its cause kaldor 1970 the evidence in support of these conditions has been summarised in chapter 2

distribution of power under stochastic social choice rules on etudie des regles de decision collective stochastique qui pour chaque ensemble realisable d alternatives et pour chaque profil de classements individuels specifient des probabilites de decision collective pour les alternatives realisables

measuring option prices from market behavior abstract option prices can be calculated from empirical demand models given knowledge of the utility theoretic structure implied by the demand specifications and the joint density of the random variables consumers face formulas for option price are given for three common weakly complementary demand specifications because it can be difficult to assess behavioral uncertainty and calculate option prices in practice knowledge of the sign of option value is important since it is a guide to the bias from ignoring this type of uncertainty the sign of option value is determined for sources of uncertainty that have proved elusive in previous treatments

the impact of technological innovation on international trade patterns the evidence reconsidered abstract this paper presents some new evidence in relation to the role of technical change in particular industrial innovation on the international competitiveness of the various oecd countries its originality consists primarily of a using a technology output indicator to measure technological performance b presenting and comparing various measures of trade and technological performance for each individual oecd country with the exception of iceland c analysing at a relatively high level of product industry disaggregation the relationship between export performance and technological performance at the same time the very limited scope of the paper has to be emphasized a the analysis is purely static all the evidence presented relates to one year 1977 b most of the results obtained are preliminary and should be further substantiated by more detailed empirical and theoretical research c as a consequence little attention has been paid to policy implications which it was felt could only be discussed properly in a later stage the paper consists of four sections a brief review of the state of the art section 1 a discussion on definitions of technology intensity section 2 the development of the best technology output indicator section 3 and the empirical analysis itself section 4 the following most important results emerge from these various sections a there are serious shortcomings in using average technology intensity as bench mark for classifying products or industries in technology intensive or nontechnology intensive categories b there is a substantial difference between technology intensity as measured on the basis of a technology input proxy rd c yet as between countries the most traditional output and input indicators the number of patents granted and the amount spent on rd d foreign patenting in particular foreign patenting in the united states figs 1 and 2 section 3 is a more reliable technology output proxy than domestic patenting e in terms of technological comparative advantage as opposed to technology intensity it is the small oecd countries as opposed to the large ones which seem to base their trade comparative advantage on technological comparative performance table 7 section 4 1 f at the individual industry level it is found that i for most technology intensive industries defined however in a less restrictive way than us r d intensities a close relation exists between technological performance and export performance and ii that as compared to other country specific resource variables technological performance is the most important trade explanatory variable its elasticity increasing with the technology intensity of industries tables 11 and 12 section 4 2 space constraints prevented us from presenting the data in relation to the inter industry and inter country analysis these can however be obtained from the author

the global financial crisis understanding the global trade downturn and recovery1 this paper aims to shed light on why the downturn in global trade during the intensification of the financial crisis in 2008q4 2009q1 was so severe and synchronised across the world and also examines the subsequent recovery in global trade during 2009q2 2010q1 the paper finds that a structural imports function which captures the different and time varying import intensities of the components of total final expenditure consumption investment government expenditure exports etc can explain the sharp decline in global imports of goods and services by contrast a specification based on aggregate total expenditure cannot fully capture the global trade downturn in particular panel estimates for a large number of oecd countries based on the individual components of expenditure suggest that the high import intensity of exports at the country level can explain a significant proportion of the decline in world imports during the crisis while declines in the highly import intensive expenditure category of investment also contributed to the remaining fall in global trade at the same time the high and rising import intensity of exports also reflects and captures the rapid growth in vertical specialisation suggesting that widespread global production chains may have amplified the downturn in world trade and partly explains its high degree of synchronisation across the globe in addition the estimates find that stockbuilding business confidence and credit conditions also played a role in the global trade downturn meanwhile the global trade recovery 2009q2 2010q1 can only be partially explained by differential elasticities for the components of demand although the results confirm that the upturn in oecd imports was also driven by strong export growth and the reactivation of global production chains as well as the recovery in stockbuilding and the fiscal stimulus this may be in part because of the many policy measures that were implemented to boost global trade at that time and which cannot be captured by the specification the paper is also a pseudo real time robustness test of the specification in that the first analysis of the global trade downturn is based on the data available at the time i e october 2009 vintage while an updated analysis of the global downturn as well as the trade upturn is based on a more recent dataset i e october 2010 vintage the results for the global downturn remain robust regardless of which vintage of the dataset is used

demand aggregation and the weak axiom of stochastic revealed preference abstract we address the problem of aggregating demand across a group of consumers who are identical in terms of wealth and face identical price vectors but vary in their chosen consumption bundles we show that when a stochastic demand function is constructed to aggregate a number of deterministic demand functions satisfaction of the weak axiom of stochastic revealed preference by this stochastic demand function is weaker than the restriction that every underlying deterministic demand function satisfy samuelson s weak axiom of revealed preference journal of economic literature classification number d11

structural changes cointegration and the empirics of thirlwall s law thirlwall s law establishes a relation between the long run growth rate the growth of exports and the long run income elasticity of imports the estimation of this parameter requires cointegration techniques which in turn require a large span of data thus exposing the estimates to risks of structural changes while this problem has been recognized in the literature the evidence produced is still partial being concerned with a very limited number of countries and in some respects unsatisfactory in this article we fill this gap by assessing thirlwall s empirical regularity on a sample of 22 organization for economic cooperation and development oecd countries using econometric techniques that allow for the presence of a shift of unknown date in the long run parameters the results are generally supportive of thirlwall s hypothesis and allow us to reconcile and qualify the evidence provided in the existing literature

random consumer demand i present a theory of random consumer demand the primitive is a collection of probability distributions on budgets axioms constrain these distributions including analogues of preference axioms such as transitivity monotonicity and convexity results establish a complete representation of theoretically consistent demand the theory s purpose is empirical application to this end the theory has desirable properties intrinsically stochastic econometricians can apply it without adding extrinsic randomness in the form of errors random demand is parsimoniously represented by a single function on the consumption set finally there exist practical methods for inference based on the theory described in a companion paper

thirlwall s law and balance of payments constrained growth a comment on the debate 1989 thirlwall s law and balance of payments constrained growth a comment on the debate applied economics vol 21 no 5 pp 611 629

sectoral patterns of technological activity and export market share dynamics this paper focuses on a selected number of oecd countries and manufacturing sectors and shows the importance of sectoral diversity in the innovative process and in the relation between technology and world market share dynamics the econometric exercise confirms the importance of technological variables in the relation with world market shares in two ways first they are in general statistically significant second the taxonomy of technological classes in terms of r d intensity seems to be meaningful in disentangling the role played by sectoral diversity in the relation between embodied and disembodied investment and competitiveness sectoral diversity emerges in the statistical significance of the coefficients and in the time lag structure moreover the values of estimated r d parameters are correlated with the sectoral r d intensity

thirlwall and balance of payments constrained growth this paper outlines the theory which thirlwall uses to determine the growth of domestic income and argues that crucial elements of this theory appear to be very weak the empirical evidence presented by thirlwall to support his argument for balance of payments constrained growth is considered