learning to believe in sunspots a number of authors have shown that competitive economies may possess sunspot equilibria that is rational expectations equilibria in which purely extrinsic uncertainty affects equilibrium prices and allocations 2 such results demonstrate that it does not require a lack of faith in the rationality of market participants to believe that competitive markets may be subject to purely speculative fluctuations driven solely by expectations 3 the mere existence of sunspot equilibria as solutions to a system of marketclearing conditions however might not be judged sufficient to indicate that competitive markets with rational participants could ever be subject to speculative instability the sunspot equilibria represent states of affairs in which agents act differently in the case of different realizations of the sunspot variable and it is rational for each agent to do so but it might be thought unlikely that the beliefs of all the participants in the market could ever come to be coordinated so as to bring about an equilibrium of that kind it is rational to believe that sunspots convey information about future states of affairs once the economy is in a sunspot equilibrium but why would rational agents ever begin to believe in such a thing so as to create the conditions under which the belief is rational in order to address such a question one must go beyond the mere statement of the conditions for equilibrium and discussion of what states of affairs satisfy them one must specify an explicit dynamic process according to which the beliefs of agents adjust when out of equilibrium any exercise of this kind is necessarily unsatisfactory as there is no univocal meaning for the postulate of rational behavior outside of an equilibrium it may well be the case that

historical review of demand side management in china management content operation mode results assessment and relative incentives abstract traditional power load management in china is featured by power rationing without considering user demand however since the 1990s demand side management dsm has been introduced by local governments and enterprises in china to improve terminal power efficiency and optimize resources allocation and certain breakthrough have already been achieved demand response aims at improving the energy efficiency of end users and achieving emission reduction targets based on the development status of power industry and electricity market in china this paper firstly reviews the three key development stages of traditional dsm including management content operation mode and results assessment secondly this paper analyzes the demand side management aimed at energy conservation and emissions reduction selecting the core elements and key processes influencing terminal power efficiency of dsm development in addition dsm safeguard system and incentive mechanism including political economic technical and managerial measures are further discussed to achieve the aim of energy conservation and emission reduction finally this paper systematically analyzes related policies and regulations proposed by the government and put forward relative policy recommendations for dsm development in china

returns to regionalism the past decade has witnessed a renewed interest in regional trade agreements with many policymakers and academics seeming to believe that these provide more than the traditional gains from trade this article examines several possible benefits that regional trade agreements may confer on their partners including credibility signaling bargaining power insurance and coordination it assesses the necessary conditions for each possible channel to work gives stylized examples of specific types of policy where the benefit might be applicable examines cases where the explanation might be relevant and discusses their overall plausibility it concludes by examining the north american free trade agreement and the europe agreements

the prospective of coal power in china will it reach a plateau in the coming decade abstract coal power holds the king position in china s generation mix and has resulted in ever increasing ecological and environmental issues hence the development of the electric power sector is confronted with a series of new challenges china has recently adopted a new economic principle of the new economic normal which has a large effect on the projection electricity demand and power generation planning through 2020 this paper measures electricity demand based upon china s social and economic structure the 2020 roadmap presents china s developing targets for allocating energy resources to meet new demands and the 2030 roadmap is compiled based upon an ambitious expansion of clean energy sources results show that electricity demand is expected to reach 7500 twh in 2020 and 9730 twh in 2030 coal power is expected to reach its peak in 2020 at around 970 gw and will then enter a plateau even with a pathway of active electricity substitution in place

productivity growth of newly industrializing economies in heterogeneous capital goods markets the case of the korean machinery and equipment industry although many previous studies have investigated the economic growth of east asian countries from the perspective of productivity growth they have adopted a limited focus only on the national level or on the aggregated level and have overlooked the heterogeneity at the disaggregated level furthermore only a few studies have examined the sources of the remarkable growth and trade performance of the korean machinery and equipment industry despite its importance for sustainable growth of national economy therefore we investigated the total factor productivity growth tfpg of the korean machinery and equipment industry and its 12 sub sectors from 1970 to 2012 using the stochastic frontier production approach as a result we found that the industry has achieved labour input driven tfpg largely due to technical progress this is contrary to the previous result that east asia has expanded the production frontier by capital accumulation in contrast in some sub sectors scale effect and allocation effici

returns to regionalism an analysis of nontraditional gains from regional trade agreements the past decade has witnessed a renewed interest in regional trade agreements with many policymakers and academics seeming to believe that these provide more than the traditional gains from trade this article examines several possible benefits that regional trade agreements may confer on their partners including credibility signaling bargaining power insurance and coordination it assesses the necessary conditions for each possible channel to work gives stylized examples of specific types of policy where the benefit might be applicable examines cases where the explanation might be relevant and discusses their overall plausibility it concludes by examining the north american free trade agreement and the europe agreements

state business relations and economic growth in sub saharan africa abstract this paper contributes to the literature on the determinants of economic growth in sub saharan africa by examining the effect of effective state business relations on economic growth for a panel of 19 sub saharan african countries for the period 1970 2004 we propose a measure that we argue captures the various dimensions of effective state business relations in sub saharan africa we then estimate standard growth regressions using dynamic panel data methods with this measure along with the more conventionally used measures of institutional quality such as degree of executive constraints the rule of law the degree of corruption and the quality of the bureaucracy our results show that effective state business relations contribute significantly to economic growth countries which have shown improvements in state business relations have witnessed higher economic growth controlling for other determinants of economic growth and independent of other measures of institutional quality

the big push industrialization and international trade the role of exports abstract this paper analyzes the late industrializations of south korea and taiwan and how they can be produced by an export promotion policy the paper adopts an open economy version of the well known big push model thus it recovers neoclassical accounts of industrialization through exports complementing previous literature which tends to show the existence of the big push but is scarce on trade mechanisms to produce it the model fits well with some stylized facts of the industrializations in east and southeast asia i also apply it to a comparison of the education policies of east asia and latin america

cap and trade a sufficient or necessary condition for emission reduction influenced by the success of emission trading in the us for sulphur dioxide so 2 some economists have argued for an upstream economy wide cap and trade scheme as the primary tool for achieving the required reduction in greenhouse gas ghg emissions this paper addresses that argument and concludes that cap and trade will need to be accompanied by complementary regulatory measures while it is a necessary component in a climate mitigation programme it is unlikely to be sufficient by itself to accomplish the desired emission reductions the paper reviews the evidence on how so 2 emissions were reduced and the extent to which actual emission trading was responsible for the reduction as opposed to other innovations it also identifies differences between the past regulation of so 2 and other air pollutants and the challenges presented by the regulation of ghg emissions what actually happened in the us with so 2 emission trading deviated in several significant respects from what would be predicted based on the conventional theoretical analysis while there was a dramatic reduction in so 2 emissions it occurred because of several factors some of which are unlikely to apply for ghg emissions and others of which argue for an activist regulatory policy by the government as a complement to the functioning of an emissions market for ghgs copyright 2010 oxford university press

multiple equilibria coordination and transitional growth abstract we study a small open economy with two sectors and two factors of production in one of the sectors external economies of scale are generated through the industry level capital input this leads to a divergence between private and social production possibility frontiers as well as to multiple equilibria the equilibrium selection problem that arises is solved by agents who follow a simple trial and error learning rule the growth path of the economy as agents learn lies below the production possibility frontier and may display cyclical transitional dynamics we also show that coordination problems which may prevent the economy from attaining the good equilibrium may be alleviated by the temporary use of policy instruments that shape the allocation of resources

collective learning in global diffusion spreading quality standards in a developing country cluster this research analyzes how foreign organizational practices diffuse among indigenous enterprises in a developing economy it highlights the collective knowledge building process as central for understanding diffusion based on a longitudinal case study of a cluster of dairy producers in nicaragua a representative low income country it looks at cross border diffusion in conditions that differ significantly from advanced economies the current literature that highlights institutional pressures driving global spread of practices has limits for capturing a significant dynamic caused by increased integration of markets and production by focusing on production organization and practices in a late developing context this paper explains the intertwined process of spreading new standards and changing existing local practices by elaborating the relationship among building collective capabilities learning and standards diffusion this study enriches current views on institutional effects and adds to the practice based literature as well as to the work on developing economy firms in organizational research

clusters and comparative advantage implications for industrial policy abstract cases of industrial agglomeration or clusters arise in the presence of industry specific and local externalities also called marshallian externalities the standard argument is that such externalities may justify a policy of infant industry protection to allow and encourage clusters to emerge in this paper i explore this carefully and show that different policy implications emerge under a more realistic modeling of clusters in particular rather than distorting prices to promote clusters in advanced sectors that may exhibit strong clustering possibilities countries should focus instead on promoting clustering in current sectors which have revealed to have the strongest comparative advantage import substitution is not a proper way to achieve this

stages of diversification in africa abstract this paper investigates the relationship between manufacturing diversification and level of economic development for 29 african countries three diversification stages are identified considerable differences in diversification are found over the first stage at the low end of the per capita income scale diversification alone will not encourage development in poorer countries until obstacles such as weak institutions poor governance and a lack of infrastructure are addressed diversification slows down over the remaining stages as countries develop results show countries further along the african economic development path successfully diversified manufacturing

foreign direct investment in a two tier oligopoly coordination vertical integration and welfare we study foreign direct investment fdi by two independent investors entrants into a two tiered oligopolistic industry an fdi subsidy at a single stage of production can be sufficient to resolve the coordination problem facing investors thereby inducing entry at both stages however due to linkage offsetting fdi at both stages may yield lower domestic welfare than fdi at a single stage vertical integration not only solves the coordination problem it also eliminates double marginalization but since the integrated multinational does not sell the intermediate to local firms its entry generates no vertical linkages and can yield lower welfare than fdi by independent firms in this article we study foreign direct investment fdi via direct entry into a two tiered vertically related industry and derive the welfare effects of such fdi from the host country s perspective given the complementarity of production in vertically related industries it stands to reason that decisions regarding fdi into such industries are likely to be interdependent f or example fdi by an intermediate good supplier can enhance the fdi incentive of a final good producer by ensuring steady local supply of the intermediate helping lower its local price due to increased competition in the intermediate market or providing a higher quality version of the intermediate relative to local suppliers similarly an upstream intermediate good producer may find it more attractive to undertake fdi into a country if prior or simultaneous fdi into the downstream sector increases derived demand for the intermediate good thus fdi into one typeofproductionactivitymayinduceadditionalfdiintorelatedupstreamand ordownstream activities casual observation suggests that the aspects of fdi we model in this article are highly relevant in the real world for example the investment of japanese automakers in southeast asian countries in the 1970s and 1980s was accompanied by investment by producers of auto parts and subsystems 2 more generally fdi flows occur in virtually all interrelated sectors of the world economy including resource sectors manufacturing distribution and services in our two tiered oligopoly model two foreign investors one that produces an intermediate good and another that produces a final good decide independently whether or not to enter a host country fdi by either firm incurs a fixed cost and potentially generates technological

the paradoxes of the successful state abstract three issues are discussed in this paper first i argue that it is impossible to understand the east asian growth miracle without appreciating the importtant role that government policy played in stimulating private investment second i will summarize some of my work on the determinants of policy effectiveness based on a cross country comparison of export subsidy regimes and show that the usual rules of thumb on what makes for good policy uniformity transparency non selectivity etc are quite useless in predicting which policy regimes perform better in practice third i will provide some evidence that the government s social insurance role creates a complementarity between states and markets these three sets of ideas yield a more balanced and nuanced view of the role of the state in economic development than has recently become commonplace

opening up international trade with eastern europe trade with eastern europe carl b hamilton and l alan winters previous economic policy in the soviet union and eastern europe sought to restrict international trade with market economies hence liberalization and reform should now lead to a huge increase in such trade this will have a major impact both on the reforming economies and on their new trade partners first we develop an empirical model of trade flows between existing market economies and use this to forecast long run trade flows as the former soviet union and eastern europe are reabsorbed into the world economy second we provide a more detailed analysis of one key sector agricultural trade we compare and contrast three regime changes reform in the east admission of the east to the ec cap and worldwide success on agricultural liberalization in the gatt third we adduce evidence of high quality human capital in eastern europe and argue that this will tend to confer a comparative advantage in quite sophisticated products we conclude by stressing that since trade cannot be permanently and profoundly unbalanced western market economies can enjoy potential gains from trade only if they allow market access to emergent producers from the former soviet union and eastern europe

market stimulating technology policies in developing countries a framework with examples from east asia abstract this paper proposes an analytical framework for technology development based upon evolutionary approaches and drawing upon asian development strategies the analysis rests on the concept of market stimulating technology policies comprising a broad array of policies to promote industrial and technological development some market and others government determined these policies may be functional horizontal or vertical and can be analyzed at three levels national strategic and specific the paper suggests that strategic choices are involved at all stages that cannot be resolved entirely by recourse to free markets

drifting together or falling apart the empirics of regional economic growth in post unification germany the objective of this article is to address the question of convergence across german districts in the first decade after german unification by drawing out and emphasizing some stylized facts of regional per capita income dynamics we achieve this by employing nonparametric techniques which focus on the evolution of the entire cross sectional income distribution in particular we follow a distributional approach to convergence based on kernel density estimation and implement a number of tests to establish the statistical significance of our findings this article finds that the relative income distribution appears to be stratifying into a trimodal bimodal distribution

the determinants of cross border equity flows abstract we explore a new panel data set on bilateral gross cross border equity flows between 14 countries 1989 1996 we show that a gravity model explains international transactions in financial assets at least as well as goods trade transactions gross transaction flows depend on market size in source and destination country as well as trading costs in which both information and the transaction technology play a role distance proxies some information costs and other variables explicitly represent information transmission an information asymmetry between domestic and foreign investors and the efficiency of transactions the geography of information is the main determinant of the pattern of international transactions while there is weak support in our data for the diversification motive once we control for the informational friction we broaden the scope of our results by presenting some evidence linking the results on equity transactions to equity holdings

industrial policy in an imperfect world theoretical analyses of industrial policy normally restrict the range of possible outcomes by abstracting from either market or government failures this paper thus studies industrial policy and its effectiveness in a model that includes both market and government imperfections we introduce a public agency responsible for industrial policy into the model of hausmann and rodrik 2003 and assume that this agency has limited information and is partly politically motivated we further extend the model to allow the public agency to communicate with entrepreneurs and the entrepreneurs to engage in rent seeking we find that industrial policies are ineffective if the public agency is poorly informed but that they are not necessarily ineffective if the public agency is highly politically motivated given a highly politically motivated public agency industrial policies are effective if and only if the institutional setting ensures that such policies are modest e g by restricting the public agency s budget moreover our model helps us to understand why the same industrial policies that have failed elsewhere have been relatively successful in south korea and taiwan

empirics of hills plateaus mountains and plains a markov switching approach to growth abstract most economic growth research has been aimed at explaining cross country differences in average growth rates however it is well known that growth experiences differ over time within a country almost as much as they differ among countries this paper builds on pritchett s 2000 pritchett lant understanding patterns of economic growth searching for hills among plateaus mountains and plains world bank economic review may 2000 14 2 221 250 observation that the growth process can be thought of as transitions between different growth regimes and proposes a framework for systematic analysis of such regimes and the dynamics of the transitions i estimate a markov switching regression to characterize four distinct growth regimes and transitions between them the results show that countries switch among regimes of stable growth miracle catch up stagnation and crisis with the transition probabilities determined by the quality of institutions better institutions appear to improve long run growth by making episodes of fast growth more persistent low average growth rates in countries with weak institutions are a result of these countries spending more time in stagnation regimes rather then being incapable of fast growth at all weak institutions do not rule out growth takeoffs but limit their sustainability the approach directs attention to shifts in growth performance and highlights the fact that identical average growth rates can mask very distinct growth paths

coordinating development can income based incentive schemes eliminate pareto inferior equilibria individuals inability to coordinate investment may significantly constrain economic development in this paper we study a simple investment game characterized by multiple equilibria and ask whether an income based incentive scheme can uniquely implement the high investment outcome a general property of this game is the presence of a crossover investment point at which an individual s incomes from investment and noninvestment are equal we show that arbitrarily small errors in the government s knowledge of this crossover point can prevent unique implementation of the high investment outcome we conclude that informational requirements are likely to severely limit a government s ability to use income based incentive schemes as a coordination device

coal power overcapacity and investment bubble in china during 2015 2020 abstract electricity consumption growth in china has experienced radical adjustment from high speed to medium speed with the advent of new economy normal however the investment enthusiasm on coal power remains unabated and leads to continuous operation efficiency deterioration in recent years in this paper we quantify the rational capacity and potential investment of coal power in china during the 13th fyp period 2016 2020 by employing power planning model and fully considering the power sector s contribution in the 15 non fossil primary energy supply target by 2020 we estimate that the reasonable capacity addition space of coal power ranges between 50 gw and 100 gw depending on the expected range of demand growth we find that if all the coal power projects submitted for environmental impact assessment eia approval were put into operation in 2020 capacity excess would reach 200 gw such huge overcapacity will bring forth disastrous consequences including enormous investment waste poor economic performance of generators and more importantly delay of low carbon energy transition finally policy recommendations are proposed to address this issue

platform selection in the lab abstract emerging literature explores experimental platform selection games these games converge rapidly on the superior platform under a wide range of conditions we replicate the remarkable results of hossain and morgan 2009 in which such a game tips almost perfectly to the superior platform next we show that platform coordination fails when seemingly innocent increases in out of equilibrium payoffs are introduced the inflated payoffs keep the best reply structure unchanged and do not influence players security levels our design allows control for the explanatory force of risk dominance we find that equilibrium selection theory is unable to account for coordination failure while observed behavior is consistent with non rational learning furthermore and contrary to the literature we find that efficiency suffers when an inferior platform is granted initial monopoly

coordination failures and government policy evidence from emerging countries rodrik jie 1996 argues for coordinated government policy when emerging countries are stuck in a low wage equilibrium because of a coordination failure because the return to intermediate output is markedly below that realised when a minimum threshold number of varieties must produced in concert the expectation of too few varieties is sufficient to discourage entry and keep a high tech sector from succeeding here we search for evidence consist with such threshold models on cross country data first production data is used to ask i whether evidence of coordination failures among intermediate good producers is associated with a low wage equilibrium and ii whether government policy can succeed in moving an emerging country from a low to high wage equilibrium second financial data is used to ask whether there is evidence that government coordination can replace missing private markets in emerging economies and whether a moderate degree of financial repression can help rather than hinder growth

learning and price volatility in duopoly models of resource depletion the aim of this paper is to provide a theoretical model that can account for price fluctuations in depletable resource markets we do so by introducing learning into a hotelling style duopoly model of optimal resource depletion before the depletable resource becomes scarce the self confirming equilibrium of the model mirrors noncooperative rational expectations equilibrium in that supply is high and price is low although learning does induce occasional upward price spikes that are followed by a long period of falling price once the depletable resource becomes scarce the dynamics of the market change significantly with the self confirming equilibrium mirroring the cooperative rather than noncooperative rational expectations equilibrium supply is low and price is high price spikes still occur but against a background of increasing prices when scarcity is sufficient then the market is permanently in a self confirming equilibrium that is equivalent to cooperative rational expectations equilibrium

bounded rationality expectations and child labour this paper develops a model with overlapping generations where the household s optimal fertility child labour and education decisions depend on the parents expectations or beliefs about the return to education it is shown that there exists a range of parental income where the fertility rate is high and children participate in the labour market and receive an incomplete education if a parent believes the return to education is low the act of participating in the labour market reduces the child s ability to accumulate human capital thus the action of sending a child into the labour market is sufficient to ensure that the parents initially pessimistic expectations are fulfilled it is then shown that a one time policy intervention such as banning child labour and mandatory education can be enough to move a country from the positive child labour equilibrium to an equilibrium with no child labour rationalite limitee anticipations et travail des enfants ce memoire developpe un modele de chevauchement des generations ou la fecondite optimale du menage le travail des enfants et les decisions a propos de l education dependent des anticipations des parents ou de qu ils croient etre le rendement sur l education on montre qu il existe un eventail de revenus des parents pour lequel le taux de fecondite est eleve et les enfants participent au marche du travail et recoivent une education incomplete si un parent croit que le rendement sur l investissement en education est faible le fait d entrer sur le marche du travail reduit la capacite de l enfant a accumuler du capital humain et donc le fait de l envoyer sur le marche du travail est suffisant pour s assurer que les anticipations pessimistes du parent se realisent on montre qu une intervention ponctuelle de politique publique a un moment donne comme bannir le travail des enfants ou imposer l education obligatoire peut suffire pour deplacer un pays d un equilibre avec travail des enfants vers un equilibre sans travail des enfants

should i stay or should i go bandwagons in the lab abstract we experimentally investigate the impact of strategic uncertainty and complementarity on leader and follower behavior using the model of farrell and saloner 1985 at the core of the model are endogenous timing irreversible actions and private valuations we find that strategic complementarity strongly determines follower behavior once a subject decides to abandon the status quo the probability that other players jump on the bandwagon increases sharply however there is a reluctance to lead when leading is a conditional best response we explain this deviation from the neo classical equilibrium by injecting some noise in the equilibrium concept we also find that cheap talk improves efficiency

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

transitional dynamics in two sector models of endogenous growth the steady state and transitional dynamics of two sector models of endogenous growth are analyzed in this paper we describe necessary conditions for endogenous growth the conditions allow us to reduce the dynamics of the solution to a system with one state like and two control like variables we analyze the determinants of the long run growth rate we use the time elimination method to analyze the transitional dynamics of the models we find that there are transitions in real time if the point in time production possibility frontier is strictly concave which occurs for example if the two production functions are different or if there are decreasing point in time returns in any of the sectors we also show that if the models have a transition in real time the models are globally saddle path stable we find that the wealth or consumption smoothing effect tends to dominate the substitution or real wage effect so that the transition from relatively low levels of physical capital is carried over through high work effort rather than high savings we develop some empirical implications we show that the models predict conditional convergence in that in a cross section the growth rate is predicted to be negatively related to initial income but only after some measure of human capital is held constant thus the models are consistent with existing empirical cross country evidence authors

coordination failures and government policy a model with applications to east asia and eastern europe abstract poor countries must specialize in standardized labor intensive commodities middle income countries may have a richer menu of options if their labor force is reasonably well educated and skilled the multiplicity of equilibria is due to a coordination problem inherent in activities that require specialized inputs if no intermediate inputs are presently produced there may be little incentive for any single firm to do so on its own the economy may get stuck in a low wage low tech equilibrium an investment subsidy or a minimum wage policy can enhance welfare by moving the economy to a superior equilibrium

cumulative effects of labor market distortions in a developing country abstract this paper considers a small open economy with an input output industrial structure that creates vertical linkages and multiple equilibria an imperfect labor market is introduced by assuming unionized labor it is shown that a deregulation of the labor market may trigger a large discontinuous expansion of industrial output as reduced wage costs start a circular cumulative process in which expansions of the up and downstream industries promote each other centralization of collective bargaining may however also be conducive to industrialization

industrial policy and the creation of new industries evidence from brazil s bioethanol industry industrial policy programs are frequently used by governments to stimulate economic activity in particular sectors of the economy this study explores how an industrial policy program can affect the creation and evolution of an industry and ultimately the long term performance of firms we examine the history of the brazilian bioethanol industry focusing on the industrial policy program implemented by the brazilian government in the 1970s to develop the industry we put together a novel data set containing detailed information about the history of bioethanol producers our findings show that plants founded during the industrial policy program tend to be in the long run more productive than those founded before the program was in place based on additional analyses and complementary fieldwork we infer that the wave of acquisitions that occurred after the end of the industrial policy program had an important effect on the performance of the plants founded when the program was in place industrial policy especially in conjunction with a competitive post industrial policy business landscape can succeed in nurturing competitive firms

managing electric power system transition in china abstract this research studies the low carbon transition of the electric power sector in china using a multi level perspective mlp of niches socio technical regime and landscape as well as literature on innovation systems three lines of thought on transition process are integrated in the paper to probe the possible transition pathways in china a mlp analysis is presented to understand the current niches regime and landscape of china s power sector a brief analysis on the future macroscopic socio economic transition in the process of industrialization urbanization and modernization of chinese society and its implication on power landscape are depicted to prove the urgency and magnitude of transition in china and why systematic transition management is needed five transition pathways namely reproduction transformation substitution reconfiguration de alignment re alignment and reconfiguration with their possible technology options are presented the paper goes further to propose an interactive framework for managing the transition to a low carbon energy system in china representative technology options are appraised by employing innovation theory to indicate the logic of policymaking within the framework institutional gaps in realizing the transition are also addressed the work presented in the paper will be useful in informing policy makers and other stakeholders and may provide references for power sector transition management in other countries

an institutional approach to cross national distance cross national distance is a key concept in the field of management previous research has conceptualized and measured cross national differences mostly in terms of dyadic cultural distance and has used the euclidean approach to measuring it in contrast our goal is to disaggregate the construct of distance by proposing a set of multidimensional measures including economic financial political administrative cultural demographic knowledge and global connectedness as well as geographic distance we ground our analysis and choice of empirical dimensions on institutional theories of national business governance and innovation systems in order to overcome the methodological limitations of the euclidean approach we calculate dyadic distances using the mahalanobis method which is scale invariant and takes into consideration the variance covariance matrix we empirically analyze four different foreign expansion choices of us companies to illustrate the importance of disaggregating the distance construct and the usefulness of our distance calculations which we make freely available to managers and scholars

waves of international banking integration a tale of regional differences abstract we propose an original measure of international banking integration based on gravity equations and a spline function on a panel of 14 countries and their 186 partners between 1999 and 2012 contrary to the conventional wisdom we uncover that 1 the international banking integration outside the euro area has been tenaciously increasing since 1999 and has even strengthened after the crisis 2 in contrast the international banking integration of the euro area has been cyclical since 1999 with a peak in 2006 and a complete reversal since then 3 this decline is not a correction of previous overshooting but a marked disintegration 4 outside the euro area the level of income does not affect the shape of banking integration

foreign direct investment inflows and the industrialization of african countries summary this paper examines the relationship between inward foreign direct investment fdi and the industrialization process in africa it uses panel data from 49 countries over the period of 1980 2009 the results indicate that fdi did not have a significant impact on the industrialization of these countries while other variables such as the size of the market the financial sector and international trade were important this study concludes that the role of fdi in the transformation agenda which is currently being discussed in africa should be carefully analyzed to maximize the impact of these capital inflows

industrial targeting experimentation and long run specialization abstract this paper emphasizes the experimental nature of industrial targeting policies under uncertainty in a small open economy a government promotes entry of new firms in selected industries and updates its beliefs about the country s comparative advantage in a bayesian way this selective targeting policy is analyzed in the framework of a special type of statistical decision problem known as the multi armed bandit the paper analyzes how the costs and benefits of learning about a country s comparative advantage depend on the characteristics of the targeted industries the framework suggests that even an optimally designed industrial targeting policy may eventually steer the country away from specializing according to its true comparative advantage

the purchasing power parity debate originally propounded by the 16th century scholars of the university of salamanca the concept of purchasing power parity ppp was revived in the interwar period in the context of the debate concerning the appropriate level at which to re establish international exchange rate parities broadly accepted as a long run equilibrium condition in the post war period it first was advocated as a short run equilibrium by many international economists in the first few years following the breakdown of the bretton woods system in the early 1970s and then increasingly came under attack on both theoretical and empirical grounds from the late 1970s to the mid 1990s accordingly over the last three decades a large literature has built up that examines how much the data deviated from theory and the fruits of this research have provided a deeper understanding of how well ppp applies in both the short run and the long run since the mid 1990s larger datasets and nonlinear econometric methods in particular have improved estimation as deviations narrowed between real exchange rates and ppp so did the gap narrow between theory and data and some degree of confidence in long run ppp began to emerge again in this respect the idea of long run ppp now enjoys perhaps its strongest support in more than 30 years a distinct reversion in economic thought

trade policy cumulative causation and industrial development abstract this paper considers the effects of trade policy in industries which are imperfectly competitive and in which there is an input output structure creating vertical linkages between firms two models are presented one based on cournot oligopoly and the other on dixit stiglitz product differentiation in both models it may be the case that trade liberalisation triggers a dramatic expansion of output and possibly also a reduction in imports this arises as import liberalisation lowers costs in downstream industries expanding their output and triggering a big push of industrialisation

study on china s low carbon development in an economy energy electricity environment framework abstract emissions mitigation is a major challenge for china s sustainable development we summarize china s successful experiences on energy efficiency in past 30 years as the contributions of energy usage management and integrated resource strategic planning which are essential for low carbon economy in an economy energy electricity environment e4 framework the paper studies the low carbon development of china and gives an outlook of china s economy growth energy electricity demand renewable power generation and energy conservation and emissions mitigation until 2030 a business as usual scenario is projected as baseline for comparison while low carbon energy and electricity development path is studied it is defined as low carbon energy electricity when an economy body manages to realize its potential economic growth fueled by less energy electricity consumption which can be characterized by indexes of energy electricity intensity and emissions per unit of energy consumption electricity generation results show that with eum china could save energy by 4 38 billion ton oil equivalences toes and reduce co2 emission by 16 55 billion tons with irsp china could save energy by 1 5 btoes and reduce co2 emission by 5 7 btons during 2010 2030 to realize the massive potential china has to reshape its economic structure and rely much on technology innovation in the future

knowledge transfer from international joint ventures to local suppliers in a developing economy using in depth data from 155 pakistani auto components suppliers we study the role of socialization in knowledge transfer from international joint venture assemblers we find that whereas formal socialization mechanisms enhance the comprehension and speed of knowledge transfer to local suppliers informal socialization mechanisms enhance comprehension but not speed building on structural contingency theory we find that having a mechanistic organizational structure among knowledge recipients is an antecedent to formal socialization leading to improved knowledge transfer

reforms and confidence abstract we examine the choice of economic reforms when policymakers have present biased preferences and can choose to discard information maintain confidence to mitigate distortions from excess discounting the decisions of policymakers and firms are shown to be interdependent confident policymakers carry out welfare improving reforms more often which increases the probability that firms will invest in restructuring while policymakers in different countries can be equally irrational the consequences of bounded rationality are less severe in economies with beneficial initial conditions we also examine how present biased preferences influence the choice between big bang versus gradualist reform strategies our findings help explain differences in economic reform success in various countries

temporary protection and technology adoption evidence from the napoleonic blockade this paper uses a natural experiment to assess whether temporary protection from trade with industrial leaders can foster development of infant industries in follower countries using a new dataset compiled from primary sources i find that in the short run regions departements in the french empire which became better protected from trade with the british for exogenous reasons during the napoleonic wars 1803 15 increased capacity in a new technology mechanised cotton spinning to a larger extent than regions which remained more exposed to trade temporary protection had long term effects in particular by exploiting the fact that the post war location of the cotton industry was determined to a large extent by the historical accident of the wars i first show that the location of cotton spinning within france was persistent and firms located in regions with higher post war spinning capacity were more productive 30 years later second i find that after the restoration of peace exports of cotton goods from france increased substantially consistent with evolving comparative advantage in cottons third i show that as late as 1850 france and belgium both part of the french empire prior to 1815 had larger cotton spinning industries than other continental european countries which were not protected from british trade during the wars this suggests that adoption of the new technology was far from inevitable

integrated resource strategic planning in china abstract many governments around the world are focusing on emissions reduction through energy efficiency improvements particularly on the demand side although integrated resource planning irp which considers both supply side and demand side options had been a useful tool in the planning process for the power industry its effectiveness has been challenged recently with the restructuring of the power sector that has occurred in china and elsewhere around the world the paper proposes integrated resource strategic planning irsp as an alternative to irp in a deregulated power sector irsp takes the resource planning process one step further to the national level in this paper the authors demonstrate the tremendous potential for efficiency improvements on both the supply and demand sides of the power sector in china with irsp the results show that between 2009 and 2020 the potential for electricity savings will reach about 1228 5 twh and the potential reduction in carbon dioxide co 2 emissions will be about 1020 5 million tons another important finding of this study is that the current market based pricing system in china should be improved to provide sufficient incentives for pursuing energy savings on the demand side