symposium on globalization in perspective an introduction the principle of comparative advantage is one of the crown jewels of the economics profession the idea that all nations gain from trade even when one of them may have an absolute cost advantage in producing everything is subtle in its logic yet powerful in its implications ever since 1817 when david ricardo worked out his example of trade between england and portugal in wine and cloth the principle has shaped the way that economists view the world and it serves as the basis for our profession s overwhelming support for free trade the success that economists have had in swaying minds over the desirability of open economic borders has waxed and waned over the centuries i don t know much about the tariff but i know this much abraham lincoln is supposed to have said when we buy manufactured goods abroad we get the goods and the foreigner gets the money when we buy the manufactured goods at home we get both the goods and the money to economists consternation political discourse about trade policy has not improved much since lincoln s time ask yourself how many members of congress today or for that matter how many of your faculty colleagues in other departments would recognize the fallacy in lincoln s statement and disagree with it

demand seasonality in retail inventory management abstract we investigate the value of accounting for demand seasonality in inventory control our problem is motivated by discussions with retailers who admitted to not taking perceived seasonality patterns into account in their replenishment systems we consider a single location single item periodic review lost sales inventory problem with seasonal demand in a retail environment customer demand has seasonality with a known season length the lead time is shorter than the review period and orders are placed as multiples of a fixed batch size the cost structure comprises of a fixed cost per order a cost per batch and a unit variable cost to model retail handling costs we consider four different settings which differ in the degree of demand seasonality that is incorporated in the model with or without within review period variations and with or without across review periods variations in each case we calculate the policy which minimizes the long run average cost and compute the optimality gaps of the policies which ignore part or all demand seasonality we find that not accounting for demand seasonality can lead to substantial optimality gaps yet incorporating only some form of demand seasonality does not always lead to cost savings we apply the problem to a real life setting using point of sales data from a european retailer we show that a simple distinction between weekday and weekend sales can lead to major cost reductions without greatly increasing the complexity of the retailer s automatic store ordering system our analysis provides valuable insights on the tradeoff between the complexity of the automatic store ordering system and the benefits of incorporating demand seasonality

on the structure of lost sales inventory models we provide a new approach to the structural analysis of the standard lost sales inventory system this approach is we think easier to work with than the original one we also derive new bounds on the optimal policy then we show that more variable demand leads to higher cost finally we extend the analysis to several important variations of the basic model

base stock policies for production inventory problems with uncertain capacity levels abstract in this paper we consider a single item stochastic demand production inventory problem where the maximum amount that can be produced or ordered in any given period is assumed to be uncertain inventory levels are reviewed periodically the system operates under a stationary modified base stock policy the intent of our paper is to present a procedure for computing the optimal base stocl level of this policy under expected average cost per period criterion this procedure would provide guidance as to the appropriate amount of capacity to store in the form of inventory in the face of stochastic demand and uncertain capacity in achieving this goal our main contribution is to establish the analogy between the class of base stock production inventory policies that operate under demand capacity uncertainty and the g g 1 queues and their associated random walks we also present example derivations for some important capacity distributions

inequality and the politics of social policy implementation gender age and chile s 2004 health reforms summary regarding scholarship on the political determinants of inequality little attention has been paid to policy implementation we examine the 2004 chilean health reforms that sought to regulate private insurers and measure their effects on gender and age inequality we find that reforms intended to decrease these inequalities largely failed analysis of this failure demonstrates the importance of the politics of implementation when reforms threaten profits private providers may act to undermine reforms in the implementation process given the widespread emergence of private providers in social policy systems understanding their stakes in implementation is key to more effective equality enhancing reforms

approximation algorithms for perishable inventory systems we develop the first approximation algorithms with worst case performance guarantees for periodic review perishable inventory systems with general product lifetime for both backlogging and lost sales models the demand process can be nonstationary and correlated over time capturing such features as demand seasonality and forecast updates the optimal control policy for such systems is notoriously complicated thus finding effective heuristic policies is of practical importance in this paper we construct a computationally efficient inventory control policy called the proportional balancing policy for systems with an arbitrarily correlated demand process and show that it has a worst case performance guarantee less than 3 in addition when the demands are independent and stochastically nondecreasing over time we propose another policy called the dual balancing policy which admits a worst case performance guarantee of 2 we demonstrate through an extensive numerical study that both policies perform consistently close to optimal

cross country evidence on the distributional impact of fiscal policy abstractthis article provides new evidence on the distributional effects of fiscal policy using data on a panel of oecd economies over the last four decades we study how four measures of income in

dependency revisited international markets business cycles and social spending in the developing world while increased exposure to the global economy is associated with increased welfare effort in the organization for economic cooperation and development oecd the opposite holds in the developing world these differences are typically explained with reference to domestic politics tradables unions and the like in the developing world are assumed to have less power or interests divergent to those in the oecd interests that militate against social spending i claim that such arguments can be complemented with a recognition that developed and developing nations have distinct patterns of integration into global markets while income shocks associated with international markets are quite modest in the oecd they are profound in developing nations in the oecd governments can respond to those shocks by borrowing on capital markets and spending countercyclically on social programs no such opportunity exists for most governments in the developing world most of which have limited access to capital markets in tough times more significant incentives to balance budgets and as a result cut social spending at the times it is most needed thus while internationally inspired volatility and income shocks seem not to threaten the underpinnings of the welfare state in rich nations it undercuts the capacity of governments in the developing world to smooth consumption and particularly consumption by the poor across the business cycle the author would like to thank steph haggard kristin bakke wongi choe tim jones and seminar participants at duke university penn state university washington university mit and the university of new mexico for their helpful comments nancy brune mark hallerberg and rolf strauch and nita rudra were very generous in providing their capital account oecd fiscal and potential labor power data respectively

a duration analysis of democratic transitions and authoritarian backslides recent theories of political development have emphasized redistributive demands as the main drivers of democratic transitions and consolidation the authors employ cox duration models to evaluate a number of economic institutionalist and sociological theories of regime transition using global data from 1970 to 1999 this study suggests that demands for redistribution are insufficient explanators of political transitions the authors find that transitions to democracy depend primarily on a high level of oppositionist social mobilization and secondarily favorable patterns of economic distribution on the other hand a high level of socioeconomic development is by far the best guarantor of democratic resiliency whereas mass political conflict endangers consolidation once democracy has been introduced the study also reveals that institutionalist factors are less influential than socioeconomic characteristics in explaining regime transitions this study highlights the contribution of social movement the

design for sustainability in companies strategies drivers and needs of turkey s best performing businesses abstract experts have been developing design for sustainability tools and methods for several decades but their practical application remains challenging and varies in different contexts the limited literature on design for sustainability in turkey reflects the inadequacy of legislation market demand and companies practices nonetheless one can find good examples of design for sustainability in the country this study investigates the best performing companies in turkey s sustainability field through a survey that addresses the barriers they face the benefits they achieve their further needs for achieving sustainability and the scope of and drivers for the practices findings indicate that among the design for sustainability strategies the sample companies are more active in producing and manufacturing and packaging they are driven to boost brand value and reputation but not to increase exports inadequate market demand and legislation are by far the biggest barriers companies needs to carry out sustainability activities are high but mostly with regards to research development recent results differ somewhat from the earlier findings in turkey and to a greater extent from previous studies in europe in turkey design for sustainability is still comprehended as an issue of production needing the attention and expertise of designers it can generate benefits even when its practice is limited promoting design for sustainability within the industry by providing good examples can increase its impact this study builds a background for future research on design for sustainability and for spreading its use by companies universities intermediaries and policy makers the results might be applicable to other contexts experiencing similar setbacks on sustainability as the turkish industry

whose greed whose grievance and whose opportunity effects of foreign direct investments fdi on internal conflict abstract this paper investigates the influence of foreign direct investments on the probability of civil conflict onset contributing to the debate on globalization and civil conflict i relax the common assumption that all forms of globalization are equivalent in their effects on civil conflict i also incorporate the cross sectoral heterogeneity of investments in existing arguments about the socioeconomic externalities of foreign direct investments as determinants of conflict with long time horizons and managerial control of their foreign affiliates foreign direct investors are strategic players aiming to maximize profits and uniquely able to alter their environment through socio political channels this distinguishes fdi from trade and foreign portfolio investments through a combination of political agency and socio economic influences on grievance and greed among domestic groups some types of fdi are likely to alleviate the risk of civil conflict service sector fdi while others exacerbate it primary sector fdi analyses using a new data set of sector specific fdi stock 1980 2013 lend empirical support to the argument showing that economic globalization can have simultaneous positive and negative externalities these findings are informative for the current dialogue on the role of global markets in sustainable development

democracy economic development and income inequality most cross national tests of inverse association between democracy and inequality have operationalized the concept of democracy by measuring its level at a single point in time more compelling theoretical arguments can be made for causal relationships that operate over time between 1 a country s years of democratic experience and income inequality and 2 income inequality and the stability of democracy continuous and qualitative measures of years of democratic experience are estimated to have a significant negative impact on income inequality independent of economic development and other control variables for a sample of 55 countries a very strong inverse correlation is also observed between income inequality and regime stability for a sample of 33 democracies this association holds independent of economic development which is found to have no direct effect on democratic stability after controlling for income inequality

dependency disarticulation and denominator effects another look at foreign capital penetration less developed countries desparately need capital to develop but countries dependent on foreign capital face slower economic growth higher income inequality and possibly impaired domestic capital formation these conclusions emerge from a reassessment of glenn firebaugh s broad critique of capital dependency research which exposed an important error in earlier studies the solution charts new theoreticall ground by factoring dependency effects into the differential productivity of foreign and domestic investment and the negative externalities from foreign capital penetration the revised formulation is applied to cross national analyses of economic growth decapitalization and income inequality the findings consistently support capital dependency theory

the effect of trade openness on women s welfare and work life summary this study of 134 countries analyzes whether women are generally the losers or winners of globalization the results show that economic integration does not directly improve women s life expectancies women s access to primary and secondary education may improve slightly although women s welfare does not seem to improve more than that of men on the other hand economic integration does influence women s professional lives in developing countries trade openness increases female labor force participation in industrialized states it decreases the share of working women trade openness in developed countries increases the number of women employed in the service sector while in developing states it increases the number of women working in industrial jobs and in agriculture

foreign direct investment and income inequality further evidence abstract this paper examines the relationship between foreign direct investment fdi and income inequality special attention has been paid to data comparability and model specification by comparing models with and without geographical dummies this study shows that the statistically significant correlation between fdi and income inequality widely obtained in earlier studies might capture more of the geographical difference in inequality than the deleterious influence of fdi and to the extent that fdi does give rise to more unequal income distribution in the host less developed countries ldcs only east southeast asia ldcs appear to have been harmed by the inflow of fdi during the 1970s it should be noted however that the second result refers only to the marginal impact not the total impact apart from fdi our empirical evidence suggests that the level of economic development the direct role of government and to a smaller degree the significance of the agriculture sector in an ldc are crucial determinants of income inequality

capacitated multi item inventory systems with random and seasonally fluctuating demands implications for postponement strategies we address multi item inventory systems with random and seasonally fluctuating and possibly correlated demands the items are produced in two stages each with its own lead time in the first stage a common intermediate product is manufactured the production volumes in the first stage are bounded by given capacity limits we develop an accurate lower bound and close to optimal heuristic strategies of simple structure the gap between them evaluated in an extensive numerical study is on average only 0 45 we use the model to investigate the benefits of various delayed product differentiation postponement strategies as well as other strategic questions including i the benefits of flexible versus dedicated production facilities ii the trade off between capacity and inventory investments and iii the trade off between capacity investments and service levels

does economic globalisation affect income inequality a meta analysis a large volume of econometric literature has studied the impact of economic globalisation on income inequality around the world however reported econometric estimates vary substantially which makes it difficult to draw valid conclusions this paper presents a quantitative summary and analysis of existing estimates regarding the globalisation inequality relationship we use a new data set consisting of 1 254 observations from 123 primary studies by applying meta analysis and meta regression methods we obtain several main findings first globalisation has a small to moderate inequality increasing effect second while the effect of trade globalisation is small financial globalisation shows a more sizeable and significantly stronger inequality increasing impact third we find an average inequality increasing impact of globalisation in both advanced and developing countries fourth education and technology moderate the impact of globalisation on income inequality

new ways of looking at old issues inequality and growth abstract the paper uses new cross country data on income and asset land distribution to show that i there is a strong negative relationship between initial inequality in the asset distribution and long term growth ii inequality reduces income growth for the poor but not for the rich and iii available longitudinal data provide little support for the kuznets hypothesis policies that increase aggregate investment and facilitate acquisition of assets by the poor might thus be doubly beneficial for growth and poverty reduction

economic statism private capital and the dilemmas of accumulation in nigeria abstract nigeria s persistent economic stagnation is attributable to a mutually reinforcing political dynamic comprising a weak developmental state and pervasive rent seeking within the private sector this syndrome was a source of nigeria s initial economic crisis in the early 1980s and it continues to impede structural adjustment initiatives economic policy reform has been compromised by state strategies designed to preserve the gains of elite rentier groups while private entrepreneurs have responded to policy change by seeking new rental havens in finance and other nontradable sectors in consequence structural adjustment has failed to elicit a supply response or to generate significant political support for a more propitious enabling environment nigeria s experience reinforces the perception that changes in nominal incentives must be accompanied by broader institutional transformation if economic reform is to be effective

institutionalizing sustainability an empirical study of corporate registration and commitment to the united nations global compact guidelines abstract drawing upon institutional and stakeholder theories we explore the causal mechanisms of institutionalization and their influence on sustainable development initiatives to test our arguments we study the registration patterns of 394 large corporations from 12 western european and latin american countries into the united nations global compact results indicate that the normative and mimetic mechanisms of institutionalization i e academe and peer influence are better indicators of sustainable development initiatives than the coercive one i e government regulation the implications of these findings are consequential if sd practices continue as an ethical choice and not a mandated obligation for corporate decision makers

wages and foreign ownership a comparative study of mexico venezuela and the united states abstract this paper explores the relationship between wages and foreign investment in mexico venezuela and the united states despite very different economic conditions and levels of development we find one fact that is robust across all three countries higher levels of foreign investment are associated with higher wages however in mexico and venezuela foreign investment is associated with higher wages only for foreign owned firms there is no evidence of wage spillovers leading to higher wages for domestic firms the lack of spillovers in mexico and venezuela is consistent with significant wage differentials between foreign and domestic enterprises in the united states where the evidence suggests some wage spillovers from foreign to domestic enterprises wage differentials are smaller

intermediaries and innovation support in the design for sustainability field cases from the netherlands turkey and the united kingdom abstract companies face challenges and need support when applying specific knowledge to their innovation processes such as design for sustainability the providers of innovation support in innovation systems are intermediaries while the literature on intermediaries focuses on various roles and approaches the way in which intermediaries function in specific fields such as design for sustainability remains underexplored this paper investigates how intermediaries provide innovation support in the design for sustainability field today with a focus on the services and support they offer the approaches and drivers that shape them as well as the challenges of the intermediation process particularly concerning sustainability and design to do this 14 intermediaries from the netherlands the united kingdom and turkey were investigated through case studies the role of design in support processes especially during implementation the importance and types of collaborations among various actors of innovation systems and the emergence of a new type of intermediary that promises radical innovation in sustainability are among the findings in addition based on the empirical data we suggest a framework for describing the roles and attributes of a group of five intermediaries that meets the needs of all types of companies engaged in design for sustainability finally we offer suggestions for turkey on how to raise the capacity of its intermediaries operating in the design for sustainability field which might be applicable to other similar contexts as well this study contributes to the theory and practice of innovation support in the sustainability field from which all innovation system s actors especially intermediaries and governmental institutions might benefit in designing support programs

inequality corruption and the informal sector abstract the marginal impact of corruption on income inequality is shown to be a linear function of the size of the informal sector this implies that anti corruption policies alone are unlikely to reduce inequality in countries with a large informal sector

inventory control in a fluctuating demand environment we present an inventory model where the demand rate varies with an underlying state of the world variable this variable can represent economic fluctuations or stages in the product life cycle for example we derive some basic characteristics of optimal policies and develop algorithms for computing them in addition we show that certain monotonicity patterns in the problem data are reflected in the optimal policies

a new data set measuring income inequality this article presents a new data set on inequality in the distribution of income the authors explain the criteria they applied in selecting data on gini coefficients and on individual quintile groups income shares comparison of the new data set with existing compilations reveals that the data assembled here represent an improvement in quality and a significant expansion in coverage although differences in the definition of the underlying data might still affect inter temporal and international comparability based on this new data set the authors do not find a systematic link between growth and changes in aggregate inequality they do find a strong positive relationship between growth and reduction of poverty

the global impact of quotas on the fast track to increased female legislative representation quotas have become an important mechanism through which women today are entering legislatures worldwide this study shows that the introduction of quotas has helped overcome constraints on women s representation posed by economic underdevelopment cultural influences and even electoral systems this study also demonstrates that the introduction of quotas offers the most explanatory power for women s representation today together with electoral systems that allow for greater candidate turnover i e party list proportional representation systems the majority of studies explaining women s legislative representation prior to 2000 focused on electoral systems cultural considerations and the strength of leftist political parties since the mid 1990s however an increasing number of countries have introduced gender quotas which this article incorporates into older models in cross national multivariate analysis

a periodic review inventory model with demand influenced by promotion decisions in this paper we use a markov decision process mdp to model the joint inventorypromotion decision problem the state variable of the mdp represents the demand state brought about by changing environmental factors as well as promotion decisions the demand state in a period determines the distribution of the random demand in that period optimal inventory and promotion decision policies in the finite horizon problem are obtained via dynamic programming under certain conditions we show that there is a threshold inventory level p for each demand state such that if the threshold is exceeded then it is desirable to promote the product for the proportional ordering cost case the optimal inventory replenishment policy is a base stock type policy with the optimal base stock level dependent on the promotion decision

economic determinants of democracy the relationship between the level of economic development and the level of democracy found in most quantitative cross national research implies that the largest gains in democracy are experienced by countries at intermediate levels of development during the 1960s and 1970s however middle income countries were more likely to register declines in democracy than increases i explain this anomaly with the hypothesis that income inequality affects democracy and this effect often counteracts the positive influence of economic development because intermediate levels of economic development are associated with the highest levels of income inequality the independent negative effect of income inequality on change in level of democracy explains the declines in democracy in middle income countries cross national data from a sample of 58 countries support the hypothesis of a negative effect of income inequality on change in level of democracy from 1965 to 1980 this effect is robust when noneconomic determinants of democracy are taken into account and when sample size is increased

is corruption really bad for inequality evidence from latin america this article presents new evidence on the relationship between corruption and income inequality using a panel data methodology we find that lower corruption is associated with higher income inequality in latin america this result is in contrast to other empirical studies but it makes sense in latin america for a number of reasons the finding of an inverse relationship between inequality and corruption suggests that institutional reform policies by themselves may be misguided

design for postponement a comprehensive characterization of its benefits under unknown demand distributions recent papers have developed analytical models to explain and quantify the benefits of delayed differentiation and quick response programs these models assume that while demands in each period are random they are independent across time and their distribution is perfectly known i e sales forecasts do not need to be updated as time progresses in this paper we characterize these benefits in more general settings where parameters of the demand distributions fail to be known with accuracy or where consecutive demands are correlated here it is necessary to revise estimates of the parameters of the demand distributions on the basis of observed demand data we analyze these systems in a bayesian framework assuming that our initial information about the parameters of the demand distributions is characterized via prior distributions we also characterize the structure of close to optimal ordering rules in these systems for a variety of types of order cost functions

politics and inequality in latin america and the caribbean this article presents the first pooled time series analysis of the impact that politics and policy have on inequality in latin america and the caribbean the authors build on models consisting of sociological and economic variables adding the strength of the democratic tradition long term legislative partisan political power distribution and social spending to explain variation in inequality they analyze an unbalanced pooled time series data set for income distribution in 18 latin american and caribbean countries from 1970 to 2000 they show that the political variables add explanatory power a strong record of democracy and a left leaning legislative partisan balance are associated with lower levels of inequality as are social security and welfare spending under democratic regimes thus they replicate some and modify other well established findings from studies of organization for economic cooperation and development oecd countries in the very different context of latin america and the caribbean

comparative democracy the economic development thesis in comparative politics an established finding that economic development fosters democratic performance has recently come under challenge we counter this challenge with a dynamic pooled time series analysis of a major but neglected data set from 131 nations the final generalized least squares autoregressive moving averages estimates n 2 096 appear robust and indicate strong economic development effects dependent in part on the nation s position in the world system for the first time rather hard evidence is offered on the causal relationship between economics and democracy according to granger tests economic development causes democracy but democracy does not cause economic development overall the various tests would seem to advance sharply the modeling of democratic performance

reversal of fortunes democratic institutions and foreign direct investment inflows to developing countries does increased democracy promote or jeopardize foreign direct investment fdi inflows to less developed countries we argue that democratic institutions have conflicting effects on fdi inflows on the one hand democratic institutions hinder fdi inflows by limiting the oligopolistic or monopolistic behaviors of multinational enterprises facilitating indigenous businesses pursuit of protection from foreign capital and constraining host governments ability to offer generous financial and fiscal incentives to foreign investors on the other hand democratic institutions promote fdi inflows because they tend to ensure more credible property rights protection reducing risks and transaction costs for foreign investors hence the net effect of democracy on fdi inflows is contingent on the relative strength of these two competing forces our argument reconciles conflicting theoretical expectations in the existing literature empirical analyses of fifty three developing countries from 1982 to 1995 substantiate our claims we find that both property rights protection and democracy related property rights protection encourage fdi inflows after controlling for their positive effect through property rights protection democratic institutions reduce fdi inflows these results are robust against alternative model specifications statistical estimators and variable measurements

economic openness democracy and income inequality an empirical analysis scholars have studied effects of economic openness and democracy on national income inequality in two literatures in democracy studies scholars agree democracy reduces inequality but empirical evidence is ambiguous in globalization studies effects of economic openness on inequality are debated but have not been rigorously examined this article is the first systematic statistical study of the effects of both economic openness and democracy on income inequality these effects need to be studied together the authors measure national income inequality from a comprehensive gini coefficient data set economic openness is measured from trade flows foreign direct investment inflows and financial capital inflows the period studied is 1960 to 1996 the unit of analysis is a country decade and the sample includes 69 countries the authors find that democracy and trade reduce income inequality foreign direct investments increase income inequality and financial capital does not affect income inequality policy implications are discussed

does high income promote democracy the authors construct a statistical model with which to test whether the regularity that democracy is more commonly found among wealthy countries stems from a democratizing effect of high income or is due entirely to other factors such as the historical context various features of the institutional setting and simultaneity with the process of leadership change even after correcting for these many other influences the democratizing effect of income remains as a statistically significant factor promoting the emergence of democratic political institutions the authors go on to find that leaders risks of losing power rise during their time in office and that these risks are higher in more democratic countries the authors confirm the finding by burkhart and lewis beck that the democracy promoting effect of income is stronger among the european countries they suggest that high income has a more powerful democratizing effect among the southern european countries because it interacts with pressure from major trading partners to democratize this suggests a revaluation of policies designed to foster the replacement of authoritarian regimes by democratic ones through free trade

income inequality development and dependence a reconsideration we reconsider the role of foreign investment in income inequality in light of recent critiques that question the results of quantitative cross national research on foreign capital penetration we analyze an unbalanced cross national data set in which countries contribute different numbers of observations with a maximum of 88 countries and 488 observations dated from 1967 to 1994 random effects regression models that control for unmeasured country heterogeneity are used to investigate effects of foreign capital penetration on inequality measured as the gini coefficient against the background of an internal developmental model of inequality we adapt firebaugh s 1992 1996 critique of the literature on the effect of foreign investment on economic growth to the study of income inequality and find that the stock of foreign direct investment has an effect on inequality that is independent of the mechanisms identified by firebaugh we explore tsai s 1995 claim that the effect of foreign capital penetration is spurious and find that foreign stock has a significant positive effect on inequality net of region specific differences an alternative interpretation of the findings of the foreign investment inequality literature is discussed in light of the discovery of an inverted u shaped relationship between income inequality and foreign investment stock per capita we conclude that thinking on the relationship between income inequality and investment dependence should be revised in light of an investment development path relating the inflow and outflow of foreign capital to economic development

computing the optimal replenishment policy for inventory systems with random discount opportunities the paper considers the optimal control of a single item continuous review inventory system with random demand and discount opportunities items can always be purchased with the regular order setup and variable costs however when a discount opportunity occurs they can also be purchased with a different setup cost and a lower variable cost demands for individual items and discount opportunities occur according to independent poisson processes the paper proposes an algorithm to compute the parameters of the optimal replenishment policy which has been shown to be an r r d d policy wherer

trade institution quality and income inequality summary we examine the effect of trade on income inequality in small developing countries we use two well accepted trade cost variables for identification one is based on baltic dry index and another is commodities price index our main finding is that trade leads to a significant reduction increase in income inequality in autocracies democracies to explain such different effects we provide supporting evidence that autocracies export more primary commodities and may follow the stolper samuelson theorem in ho framework while democracies active in manufacturing outsourcing may follow feenstra and hanson 1996 task model

is there a trade off between income inequality and corruption evidence from latin america abstract in contrast to other research lower corruption is associated with higher income inequality this result is consistent with the idea that the corruption inequality relationship may be different where there is a large informal sector as in latin america

cash management in a randomly varying environment we study a cash management system in which the distribution of the cash flow xn in period n 1 2 depends on the state in of a randomly varying environment sufficient conditions are found for the optimality of a simple transfer rule generalizing and partially improving the well known results for the classical case with i i d cash flows these and further structural results obtained for the cash balance are shown to reduce the computational effort drastically in determining an optimal transfer rule in addition structural and computational results w r t the environment are derived finally some examples are given for economic and statistical environments and their interactions with the cash flow process

stopped myopic policies in some inventory models with generalized demand processes this paper considers single item inventory systems with immediate delivery and no economies of scale bounds are provided on the value loss relative to optimal cost for restricting attention to the class of inventory stocking policies that behave myopically up to a specified stopping time the stopping time may be random and may depend on demand histories as well as information exogenous to the firm the bounds are robust to the nature of the demand process faced after the stopping time so are applicable when the statistics of demand after the stopping time are unknown stopping times that are large with high probability imply that near term decisions are completely specified with high probability the general bounding results allow one to consider demand processes that may otherwise be analytically intractable it is shown that the class of demand models for which the assumption of additive i i d shocks is appropriate is the same class admitting effective myopic stocking policies the bounds also make rigorous the intuitive notion that myopic policies are least effective in systems with precipitous drops in demand coupled with an inability to recover cash invested in inventory the option of selling inventory at discount is a reality in many real systems and enhances the attractiveness of the myopic stocking policy in numerical examples the myopic policy is shown to be an effective competitor in a range of systems for which optimal policies are not known the results suggest that for systems with immediate delivery no economies of scale and no currently known optimal policy the myopic stocking rule is a reasonable default policy to adopt

analysis of an inventory system under backorder correlated deterministic demand and geometric supply process abstract in this article we propose a single item periodic review model that investigates the effects of changes in the demand process that occur after stockout realizations we investigate a system where the demands in successive periods are deterministic but affected by the backorder realizations in order to capture the effects of changes in the demand process we use a geometric type supply availability we analytically derive the necessary components for obtaining profit related performance measures and provide computational analysis

inventory control with information about supply conditions this paper presents an inventory control model which includes a markovian model of the supply system as that system evolves over time so do the replenishment leadtimes the optimal policy has the same structure as in standard models but its parameters change dynamically to reflect current supply conditions in this setting contrary to conventional wisdom a longer leadtime does not necessarily imply more inventory the leadtime is important but so is a concept we call order coverage

foreign direct investment and income inequality in mexico 1990 2000 in this article we explore the relationship between the investments of multinational corporations foreign direct investment and income inequality in mexico we argue that mexico s liberalization of foreign direct investment fdi inflows in the 1990s provides a natural experiment to test how fdi affects income inequality in a middle income country we use an instrumental variables approach as our identification strategy to mitigate problems of endogeneity and omitted variable bias in an empirical test of the determinants of changes in income inequality from 1990 to 2000 we find that increased fdi inflows are associated with a decrease in income inequality within mexico s thirty two states the authors would like to thank lawrence broz john freeman matt gabel geoff garrett quan li eddy malesky layna mosley katie ridgeway pablo pinto john stringer and andy sobel for comments and suggestions jacob gerber and mariana medina provided excellent research assistance thanks also to patricio aroca gonzalez for generously providing us with his data we acknowledge the financial support of the weidenbaum center on the economy government and public policy nate jensen s contribution to this article was written as a global fellow at ucla s international institute

batch quantities when forecasts are improving this paper considers the choice of initial batch quantities when demand forecasts are improving we assume that the standard deviation of the demand per period is decreasing exponentially and approaching a long run value a discrete time stochastic single level inventory model is considered there are traditional holding and backorder costs as well as an ordering cost the ordering periods must be determined in advance and we wish to determine a suitable schedule

distributive politics and economic growth a crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it in this paper we analyze the relationship between the two we focus on how an economy s initial configuration of resources shapes the political struggle for income and wealth distribution and how that in turn affects long run growth our main conclusion is that inequality is conducive to the adoption of growth retarding policies we derive this result from a simple political economy model of growth and present cross country evidence consistent with it the key feature of our model is that individuals differ in their relative factor endowments we distinguish between two types of factors an accumulated factor called capital and a nonaccumulated factor called labor growth is driven by the expansion of the capital stock which is in turn determined by individual saving decisions long run growth is endogenous as the aggregate production function is taken to be linearly homogeneous in capital and productive government services taken together the provision of government services is financed by a tax on capital because government services are productive a small tax on

political rights and income inequality a cross national test among contemporary nations the relationship between income equality and national wealth exhibits an inverted u shape low among the richest and poorest nations and high for nations with intermediate wealth to examine the reasons for this relationship i hypothesize that both political democracy and educational enrollment are related in a similar way to income inequality two data sets are used in this analysis modified version of muller s set of 62 nations circa 1965 1975 and hoover s data set multiple regression reveals that measures of political democracy and the educational enrollment levels have an inverted u relationship with income inequality national wealth gnp had no consistent direct effect on income inequality a satisfactory specification of national levels of income inequality must include the polynomial functions of political democracy and education

myopic policies for some inventory models with uncertain demand distributions the majority of papers on stochastic inventory theory make the assumption that the distribution of consumer demand in each time period is known with certainty while this assumption is unsupported in many applied contexts it is conventionally held that more realistic models are more difficult to solve and will not yield simple operational policies this paper shows that a simple inventory policy based upon a critical fractile can be optimal or near optimal in some inventory models with parameter adaptive demand processes in these some parameter of the demand distribution is not known with certainty and estimates of the parameter are updated in a statistical fashion as demand is observed through time examples include exponentially smoothed forecasts and bayesian updating of parameter estimates bounds on the value loss relative to optimal cost when using the critical fractile policy can be calculated directly from the problem data some numerical examples illustrate the technique

bullwhip effect measurement and its implications the bullwhip effect or demand information distortion has been a subject of both theoretical and empirical studies in the operations management literature in this paper we develop a simple set of formulas that describe the traditional bullwhip measure as a combined outcome of several important drivers such as finite capacity batch ordering and seasonality our modeling framework is descriptive in nature as it features certain plausible approximations that are commonly employed in practical inventory systems the results are nonetheless compelling and can be used to explain various conflicting observations in previous empirical studies building on the theoretical framework we discuss the managerial implications of the bullwhip measurement we show that the measurement can be completely noninformative about the underlying supply chain cost performance if it is not linked to the operational details such as decision intervals and leadtimes specifically we show that an aggregated measurement over relatively long time periods can mask the operational level bullwhip in addition we show that masking also exists under product or location aggregation in some illustrative cases

joint pricing procurement control under fluctuating raw material costs abstract we consider a firm that periodically procures raw material units stores them and processes them into finished products upon order arrivals the raw material cost evolves in a markovian fashion whereas the demand process is influenced by both the raw material cost and sales prices charged by the firm the firm controls both the raw material procurement activity and sales price in each period we show the optimality of base stock list price type of policies with the additional raw cost dependence under conditions that are verifiable when the firm engages in price competition with other firms tapping into the same raw material market and when the raw material cost process has time continuity and mean reversion tendencies we identify two monotone patterns in which policy parameters should follow as the raw material cost fluctuates cost increases are also shown to translate into price increases at low inventory levels in other circumstances however there does not appear to be a clear pattern as to how the firm should pass cost increases on to end customers our numerical evidence unequivocally supports the adaptation of procurement and pricing controls to changing raw material costs

a partially observed markov decision process for dynamic pricing in this paper we develop a stylized partially observed markov decision process pomdp framework to study a dynamic pricing problem faced by sellers of fashion like goods we consider a retailer that plans to sell a given stock of items during a finite sales season the objective of the retailer is to dynamically price the product in a way that maximizes expected revenues our model brings together various types of uncertainties about the demand some of which are resolvable through sales observations we develop a rigorous upper bound for the seller s optimal dynamic decision problem and use it to propose an active learning heuristic pricing policy we conduct a numerical study to test the performance of four different heuristic dynamic pricing policies in order to gain insight into several important managerial questions that arise in the context of revenue management

adaptive inventory control for nonstationary demand and partial information this paper examines several different policies for an inventory control problem in which the demand process is nonstationary and partially observed the probability distribution for the demand in each period is determined by the state of a markov chain the core process however the state of this core process is not directly observed only the actual demand is observed by the decision maker given this demand process the inventory control problem is a composite state partially observed markov decision process pomdp which is an appropriate model for a number of dynamic demand problems in practice managers often use certainty equivalent control cec policies to solve such a problem however this paper presents results that demonstrate that there are other practical control policies that almost always provide much better solutions for this problem than the cec policies commonly used in practice the computational results also indicate how specific problem characteristics influence the performance of each of the alternative policies

inventory management with random supply and imperfect information a hidden markov model in most of the papers on inventory models operating in a random environment the state of the environment in each period is assumed to be fully observed with perfect information however this assumption is not realistic in most real life situations and we provide a remedy in this paper by assuming that the environment is only partially observed with imperfect information we accomplish this by analyzing two formulations of single item models with periodic review and random supply in a random environment in the first one supply is random due to random capacity of production and random availability of transportation we show that state dependent base stock policy is optimal if the capacity and all costs are observed while demand and availability are unobserved in the second model we consider a model with random availability only with fixed ordering cost we show that state dependent s s policy is optimal if the availability process is observable