a new theoretical analysis of deindustrialisation the analysis of deindustrialisation has been led by heterodox economists especially those in the structuralist and kaldorian traditions based on a conception of sectoral specificity and the role of manufacturing in growth sectors are not the units of marxian economic analysis but thinking through the meaning of sectors in marxian terms allows for an analysis of the meaning and implications of a change in sectoral structure deindustrialisation is the sectoral shift that has been most prominent in recent decades and which is likely to have significant implications for the future of capitalism this article develops an original marxian theorisation of deindustrialisation this conceptualisation includes a distinction between two forms of deindustrialisation as well as taking into account changes in sectoral structure the proposed typology considers whether such changes are associated with a shift between those activities that produce surplus value and those that do not or only a shift in the composition of surplus value producing activities the distinction between different forms of deindustrialisation allows for an arguably richer analysis of this phenomenon than in more narrowly sector based approaches

sticky prices and monetary policy evidence from disaggregated us data this paper disentangles fluctuations in disaggregated prices due to macroeconomic and sectoral conditions using a factor augmented vector autoregression estimated on a large data set on the basis of this estimation we establish eight facts 1 macroeconomic shocks explain only about 15 of sectoral inflation fluctuations 2 the persistence of sectoral inflation is driven by macroeconomic factors 3 while disaggregated prices respond quickly to sector specific shocks their responses to aggregate shocks are small on impact and larger thereafter 4 most prices respond with a significant delay to identified monetary policy shocks and show little evidence of a price puzzle contrary to existing studies based on traditional vars 5 categories in which consumer prices fall the most following a monetary policy shock tend to be those in which quantities consumed fall the least 6 the observed dispersion in the reaction of producer prices is relatively well explained by the degree of market power 7 prices in sectors with volatile idiosyncratic shocks react rapidly to aggregate monetary policy shocks 8 the sector specific components of prices and quantities move in opposite directions

towards a capability theory of innovating firms implications for management and policy author s teece dj abstract the author 2017 business enterprises lie at the core of ecosystems that drive economic development and growth in market economies yet until recently mainstream economics has mostly treated firms like homogeneous black boxes run by opportunistic managers the field of strategic management has developed a more nuanced approach to the understanding of how firms are created organized and grow how they innovate and compete and how managers manage one of the leading paradigms in the field is the dynamic capabilities framework in this paper contrasts and complementarities are drawn between dynamic capabilities and economic theories of the firm including transaction cost economics and agency theory connections to the cambridge school are highlighted including the duality between keynes s animal spirits and the dynamic capabilities entrepreneurial owner manager leibenstein s x inefficiency is juxtaposed here with d ineffectiveness knowledge based theories of the firm consistent with cambridge conventions emerge intellectual exchange between strategic management and economics is encouraged to help improve the intuition behind models of firms and the economy

the political economics of austerity the 2007 8 financial crisis has reignited the debate about economic austerity with the aim of understanding why a government would pursue such a policy in the current context of persistent economic recession this article traces the social political and economic developments that have together shaped the evolution of ideas about austerity from the earliest theorizing by the classical political economists some three hundred years ago throughout the historical narrative important analytical themes revolve around the arguments used to justify austerity notably appeals to ethics and morality reinforced by misleading analogies drawn between government budgets and the accounts of firms and households these include concerns about inflation and the observed relationship between inflation and unemployment ricardian equivalence and non keynesian effects of austerity and the correlation between public debt levels and economic growth the class analytics of austerity who bears the burden of austerity and who benefits and the process by which alternative ideas penetrate the mainstream and reconstitute the conventional wisdom are also important analytical themes

home sourcing and closer value chains in mature economies the case of spanish manufacturing this paper offers a novel perspective on manufacturing home sourcing we present evidence that home sourcing occurs in the context of a new competitive environment where the relative importance of scale economies versus variety is altered and a recoupling of innovation and production within industrial ecosystems becomes desirable we look at the determinants of manufacturing home sourcing we find that r d intensive businesses with core non standardized products are more likely to switch sourcing of components to the home economy from abroad our findings provide evidence in favour of increasing trends towards closer value chains for knowledge intensive production suggesting that the possibilities for and potential impact of home sourcing have not been fully recognised as pathways to industrial and economic renewal in mature economies the implications for industrial policy are to focus on the resilience of existing national industrial ecosystems and their attractiveness and ability to integrate incoming business opportunities

learning from prices public communication and welfare we study the effect of releasing public information about productivity or monetary shocks using a micro founded macroeconomic model in which agents learn from the distribution of nominal prices while a public release has the direct beneficial effect of providing new information it also has the indirect adverse effect of reducing the informational efficiency of the price system we show that the negative indirect effect can dominate thus the public information release may increase uncertainty about the monetary shock and reduce welfare we find that the optimal communication policy is always to release either all or none of the information

earnings manipulation and the cost of capital the cost of capital the widespread use of accounting information by investors and financial analysts to help value stocks creates an incentive for managers to manipulate earnings in an attempt to influence short term stock price performance this paper examines the role of earnings management in affecting a firm s cost of capital using an agency model with multiple firms whose cash flows are correlated we demonstrate that the extent of earnings manipulation varies across the business cycle depending on a firm s earnings profile it can have stronger incentives to overstate its performance in good times or in bad times because of this dependence on the state of the economy earnings manipulation can influence a firm s cost of capital despite the forces of diversification

imperfect information multiple shocks and policy s signaling role abstract in multiple shock models when agents have imperfect information they attempt to infer a shock s type in addition to its size in this environment monetary policy plays an important signaling role this paper highlights this signaling role by showing that conclusions from imperfect information monetary models are sensitive to the number of shocks included with multiple shocks contractionary monetary policy can initially increase inflation and delay the eventual disinflation moreover multiple shocks can result in destabilizing price flexibility while optimal policy s response to one shock will depend on the existence of other shocks contrary to a typical linear quadratic framework

how do firms form their expectations new survey evidence author s coibion o gorodnichenko y kumar s abstract 2018 american economic association all rights reserved we survey new zealand firms and document novel facts about their macroeconomic beliefs there is widespread dispersion in beliefs about past and future macroeconomic conditions especially inflation this dispersion in beliefs is consistent with firms incentives to collect and process information using experimental methods we find that firms update their beliefs in a bayesian manner when presented with new information about the economy and that changes in their beliefs affect their decisions inflation is not generally perceived as being important to business decisions so firms devote few resources to collecting and processing information about inflation

a measurement approach to conservatism and earnings management this paper formalizes a two step representation of accounting measurement and uses it to formalize a general rationale for conservatism as a measurement principle a transaction s economic substance manifests itself in characteristics of the transaction and an accounting rule is a mapping from transaction characteristics to an accounting report managers who have stakes in the accounting report are able to influence transaction characteristics such earnings management is ex post rational for managers but ex ante inefficient to safeguard against such ex post opportunism the optimal ex ante accounting rule is conservative in the sense that it requires more verification of the transaction characteristics favorable to managers thus this rationale for conservatism is as general as the managers ability and incentive to inflate transaction characteristics by opening the black box of accounting measurement the two step representation also formalizes some classic accounting concepts such as relevance reliability verifiability verification and accounting motivated transactions

triggers of change structural trajectories and production dynamics the transformation of production structures has been at the centre of the historical dynamics of capitalist economies since the first industrial revolution the article concentrates on production processes as principal loci of structural economic dynamics along increasing and decreasing returns trajectories these trajectories are triggered by structural opportunities and constraints embedded in production systems and their historical realisation is subject to different institutional configurations production units at different levels of aggregation the approach envisioned suggests the possibility of governing economic dynamics by structural policies working on the technological and organisational conditions of production as well as on the configuration of production processes within production units capitalist economies have to rely on a mix of co ordination devices across different production units and aggregation levels for capturing structural opportunities and avoiding structural constraints

third world competition and de industrialisation in advanced countries rapid industrialization in the third world during the last three decades and the continuing fast expansion of the south s manufacturing exports to the advanced countries has raised the question whether these have or will in the future lead to deindustrialization in the north this paper provides a consistent conceptual framework for analyzing this issue which is then applied to the experience of the u k economy it is concluded that in the 1970s u k manufacturing trade with the south lead to an increase rather than a decline in output and employment however the paper also provides evidence that in the future this trade is likely to become a source of disequilibrium and may contribute to deindustrialization copyright 1989 by oxford university press

introduction the global financial crisis there cannot now be a shadow of a doubt that the flaw in his ideology admitted by alan greenspan in response to a question by henry a waxman chairman of the us house of representatives committee on oversight and government reform whether he felt that your ideology pushed you to make decisions that you wish you had not made is both significant and permanent the current financial and economic crisis that has forced the likes of greenspan to question the coherence of dominant conceptual frameworks is unprecedented in global reach and systemic gravity some basic figures speak for themselves according to mckinsey s mapping global financial markets october 2008 global financial assets rose from us 12 trillion in 1980 to us 196 trillion in 2007 the international monetary fund s global financial stability report imf 2009a estimate for the latter figure is considerably higher at us 241 trillion global cross border capital flows more than doubled between 2002 and 2007 with foreign investors holding one in four debt securities and one in five equities while in 2000 only 11 countries had financial assets of more than 350 of gross domestic product gdp 25 countries had deepened their financial markets to the same extent by 2007 as early as 1990 money managers had increased their control of us corporate equities from 8 in 1950 to 60 porter 1992 p 6 whalen 2002 p 402 similarly pension funds had extended their share of total business equities from less than 1 to just short of 39 and their fraction of corporate debt from 13 to 50 ghilarducci 1992 p 117 whalen 2002 p 402 in the period from 1986 to 2006 the us financial sector as a whole increased its share of corporate profits from 10 to 30 while its outstanding debts grew from 20 of gdp in 1980 to 116 in 2007 fed 2009 according to gillian tett from the financial times outstanding credit defaults swaps cds today amount to no less than us 60 trillion with the risk embodied after discounting mutually off setting contracts still as high as us 14 trillion tett 2009 p 264 as we know the curtains have now come down on this dance of the trillions palma 2009 the immediate hang over in the form of a pile of toxic debt is surreal not only in its

monetary policy for inattentive economies we offer a contribution to the analysis of optimal monetary policy we begin with a critical assessment of the existing literature arguing that most work is based on implausible models of inflation output dynamics we then suggest that this problem may be solved with some recent behavioral models which assume that price setters are slow to incorporate macroeconomic information into the prices they set a specific such model is developed and used to derive optimal policy in response to shocks to productivity and aggregate demand optimal policy is price level targeting base drift in the price level which is implicit in the inflation targeting regimes currently used in many central banks is not desirable in this model when shocks to desired markups are added optimal policy is flexible targeting of the price level that is the central bank should allow the price level to deviate from its target for a while in response to these supply shocks but it should eventually return the price level to its target path optimal policy can also be described as an elastic price standard the central bank allows the price level to deviate from its target when output is expected to deviate from its natural rate

exogenous information endogenous information and optimal monetary policy most of the analysis of optimal monetary policy is conducted with the calvo model this paper studies optimal monetary policy when the slow adjustment of the price level is due to imperfect information by decision makers in firms we consider two models a model with exogenous dispersed information and a rational inattention model in the model with exogenous dispersed information complete stabilization of the price level is optimal after aggregate productivity shocks but not after markup shocks by contrast in the rational inattention model complete stabilization of the price level is optimal both after aggregate productivity shocks and after markup shocks moreover in the model with exogenous dispersed information there is no value from commitment to a future monetary policy by contrast in the rational inattention model there is value from commitment to a future monetary policy because then the private sector can trust the central bank that not paying attention to certain variables is optimal

prospects for the eurozone for wim duisenberg the euro s perceived independence from the nation state was a path breaking achievement to be proud of and to cherish little more than a decade later and three years into the deepest economic crisis europe has known since the great depression duisenberg s elation rings strangely anachronistic since what the nationless euro seems to have achieved above all is to undermine whatever mutual confidence at the heart of our community there may have been at the start this special issue takes stock of the euro crisis so far it is concerned with the in depth analysis of its main causes policy proposals for a recovery from the crisis and reform strategies for the reconstruction of a more viable and egalitarian eurozone in the future this introduction provides an overview of both core features of the euro crisis and related debates as well as individual contributions to this special issue section 1 examines the origins of the euro crisis section 2 reviews key policy developments in the evolution of the crisis from its onset in may 2010 to the adoption of outright monetary transactions omts by the european central bank ecb in september 2012 and section 3 provides an overview of the contributions to the special issue

federal reserve information and the behavior of interest rates this paper tests for the existence of asymmetric information between the federal reserve and the public by examining federal reserve and commercial inflation forecasts it demonstrates that the federal reserve has considerable information about inflation beyond what is known to commercial forecasters it also shows that monetary policy actions provide signals of the federal reserve s information and that commercial forecasters modify their forecasts in response to those signals these findings may explain why long term interest rates typically rise in response to shifts to tighter monetary policy jel e52 e43 d82 asymmetric information between the federal reserve and the public is a phenomenon that is often posited but rarely tested numerous models of central bank behavior for example show that the existence of asymmetric information has important implications for the effectiveness of policy and the consequences of dynamic inconsistency yet there

informational feedback adverse selection and optimal disclosure policy faceless trading in a secondary stock market not only redistributes wealth among investors but also generates information that feeds back to real decisions using this observation we re evaluate the leveling the playing field rationale for disclosure to secondary stock markets by partially preempting traders information advantage established from information acquisition disclosure reduces private incentives to acquire information resulting in two opposite effects on firm value on one hand this narrows the information gap between informed and uninformed traders and improves liquidity of firm shares on the other hand this reduces the informational feedback from the stock market to real decisions this tradeoff determines the optimal disclosure policy the model explains why firm value can be higher in an environment that simultaneously promotes disclosure and private information production and why growth firms are endogenously more opaque than value firms

optimal impairment rules abstract we study the optimal accounting policy of a financially constrained firm that pledges assets to raise debt capital for financing a risky project the accounting system provides information about the value of the collateral absent accounting regulation the optimal accounting system is conditionally conservative it recognizes an impairment loss if the asset value is below a certain threshold but never reports unrealized gains we describe the optimal impairment rule and the optimal precision of the accounting information and we provide comparative static results that lead to testable predictions on the determinants of impairment rules

imperfect accounting and reporting bias errors and bias are both inherent features of accounting in theory while errors discourage bias by lowering the value relevance of accounting they can also facilitate bias by providing camouflage consistent with theory we find a hump shaped relation between a firm s propensity to engage in intentional misstatement and the prevalence of unintentional misstatements in the firm s industry for the whole economy and a majority of the industries the result is robust to using firms number of items in financial statements and exposure to complex accounting rules as alternative proxies for errors and to using the restatement amount in net income to quantify the magnitude of bias and errors to directly test for the two effects of errors we show that when errors are more prevalent the market reacts less to firms earnings surprises and bias is more difficult to detect our results highlight the imperfectness of accounting advance understanding of firms reporting incentives and shed light on accounting standard setting

can big bath and earnings smoothing co exist as equilibrium financial reporting strategies we study a model of financial reporting where investors infer the precision of reported earnings reporting a larger earnings surprise reduces the inferred earnings precision dampening the impact on firm value of reporting higher earnings and providing a natural demand for smoother earnings we show that for sufficiently bad news the manager under reports earnings by the maximum preferring to take a big bath in the current period in order to report higher future earnings if the news is good the manager smoothes earnings with the amount of smoothing depending on the level of cashflows observed he either over reports or partially under reports for slightly good news and gradually increases his under reporting as the news gets better until he is under reporting the maximum amount for sufficiently good news this result holds both when investors are naive and ignore management s ability to manipulate earnings or sophisticated and correctly infer management s disclosure strategy

multinational enterprises service outsourcing and regional structural change this paper offers a joint analysis of two phenomena characterizing most advanced economies in recent decades the rise of foreign ownership in manufacturing activities and the pervasiveness of the service economy the aim of the study is to examine the structural transformation of regional economic systems within the uk by focusing on the role played by foreign multinational enterprises mnes in manufacturing in facilitating the development of services from a conceptual perspective this research relies on different strands of literature on the impact of foreign direct investment fdi on recipient economies on outsourcing and regional structural transformation and on the identification of local multipliers the empirical analysis focuses on a specific demand side channel for structural change the forward linkage established by foreign manufacturing mnes with local service providers through outsourcing descriptive evidence shows that service outsourcing by foreign plants operating in manufacturing is pervasive compared to outsourcing by their domestic counterparts on this basic premise we estimate the multiplicative effects that foreign manufacturing activity has on the creation of service jobs in local labour markets in order to produce reliable estimates of a local multiplier the methodology adopts an instrumental variable approach our findings suggest that foreign presence in manufacturing can be a catalyst of regional structural change by stimulating the generation of new jobs in the tertiary sector via demand linkages

the cyclical behavior of marginal cost and price the author examines the cyclical behavior of price marginal cost margins for u s manufac turing after 1956 short run marginal cost is markedly procyclical this is primarily due to procyclical overtime payments incurred beca use employment is not perfectly flexible in most industries output price fails to respond to the cyclical movement in marginal cost so price marginal cost margins are markedly countercyclical the res ults contradict business cycle theories that explain low production i n a recession by a high real cost of producing they support theories that explain low production in a recession by the inability of firms to sell their output copyright 1987 by american economic association

ceo stock option awards and the timing of corporate voluntary disclosures abstract we investigate whether ceos manage the timing of their voluntary disclosures around stock option awards we conjecture that ceos manage investors expectations around award dates by delaying good news and rushing forward bad news for a sample of 2 039 ceo option awards by 572 firms with fixed award schedules we document changes in share prices and analyst earnings forecasts around option awards that are consistent with our conjecture we also provide more direct evidence based on management earnings forecasts issued prior to award dates our findings suggest that ceos make opportunistic voluntary disclosure decisions that maximize their stock option compensation

cross firm real earnings management cross firm real earnings management our analysis is rooted in the notion that stockholders can learn about the fundamental value of any firm from observing the earnings reports of its rivals we argue that such intra industry information transfers which have been broadly documented in the empirical literature may motivate managers to alter stockholders beliefs about the value of their firm not only by manipulating their own earnings report but also by influencing the earnings reports of rival firms managers obviously do not have access to the accounting system of peer firms but they can nevertheless influence the earnings reports of rival firms by distorting real transactions that relate to the product market competition we demonstrate such managerial behavior which we refer to as cross firm real earnings management and explore its potential consequences and interrelation with the practice of accounting based earnings management within an industry setting with imperfect non proprietary accounting information this article is protected by copyright all rights reserved

macroeconomic expectations of households and professional forecasters economists have long emphasized the importance of expectations in determining macroeconomic outcomes yet there has been almost no recent effort to model actual empirical expectations data instead m acroeconomists usually simply assume that expectations are rational this paper shows that while empirical household expectations are not rational in the usual sense expectational dynamics are well captured by a model in which households views derive from news reports of the views of professional forecasters which in turn may be rational the model s estimates imply that people only occasionally pay attention to news reports this inattention generates stickyness in aggregate expectations with important macroeconomic consequences

the signaling role of policy actions abstract in an economy affected by shocks that are imperfectly known the monetary instrument takes on a dual stabilizing role as a policy response that directly influences the economy and as a vehicle for information that reveals the central bank s assessment to firms because mark up shocks cannot be neutralized by monetary policy providing firms with more information about these shocks exacerbates their reaction and creates a larger distortion recognizing the signaling role of its instrument the central bank distorts its policy response in order to optimally shape firms beliefs while providing firms with more information is always detrimental to the output gap it has a more subtle effect on price dispersion depending on whether information is provided through the transparency channel or through the signaling channel although more transparency is always detrimental to welfare the information that is conveyed by the monetary instrument improves welfare when firms coordination is highly valuable

forcing firms to talk financial disclosure regulation and externalities we analyze a model of voluntary disclosure by firms and the desirability of disclosure regulation in our model disclosure is costly it has private and social value and its precision is endogenous we show that i a convexity in the value of disclosure can lead to a discontinuity in the disclosure policy ii the nash equilibrium of a voluntary disclosure game is often socially inefficient iii regulation that requires a minimal precision level sometimes but not always improves welfare iii the same is true for subsidies that change the perceived cost of disclosures and iv neither regulation method dominates the other article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

economic and social upgrading in global value chains and industrial clusters why governance matters the burgeoning literature on global value chains gvcs has recast our understanding of how industrial clusters are shaped by their ties to the international economy but within this context the role played by corporate social responsibility csr continues to evolve new research in the past decade allows us to better understand how csr is linked to industrial clusters and gvcs with geographic production and trade patterns in many industries becoming concentrated in the global south lead firms in gvcs have been under growing pressure to link economic and social upgrading in more integrated forms of csr this is leading to a confluence of private governance corporate codes of conduct and monitoring social governance civil society pressure on business from labor organizations and non governmental organizations and public governance government policies to support gains by labor groups and environmental activists this new form of synergistic governance is illustrated with evidence from recent studies of gvcs and industrial clusters as well as advances in theorizing about new patterns of governance in gvcs and clusters

the architecture and dynamics of industrial ecosystems diversification and innovative industrial renewal in emilia romagna the paper aims at advancing our understanding of the architecture and diversification dynamics of industrial ecosystems and identifying policies for the innovative industrial renewal of mature economies industrial ecosystems are here defined as multi tiered production systems involving heterogeneous agents operating in sectoral value chains and contributing to the capability domains of the ecosystem and its participants with closely complementary but dissimilar sets of resources and capabilities the geographical boundaries of the industrial ecosystem are shaped by the evolving interdependencies linking organisations within the ecosystem and by the new linkages consolidating beyond that thus the industrial ecosystem is a structured production space centred mainly on its productive organisations as well as other institutions intermediaries and demand side actors purposefully involved in co value creation processes along various types of diversification and innovative industrial renewal trajectories drawing on a five year research programme in the emilia romagna industrial ecosystem a number of case studies are introduced to highlight these trajectories and the underpinning structural learning dynamics the paper concludes by identifying a number of policy implications focusing on strategies for enhancing the structural readiness of the industrial ecosystem and promoting smart diversification and innovative industrial renewal policies jel classifications d20 o25 o30

setting the right prices for the wrong reasons we consider a model of nominal price adjustment with firm specific and aggregate shocks to economic fundamentals and incomplete dispersed information firms update their expectations about fundamentals based on their own cash flows revenues and wages we show that in a model with realistic levels of product level price dispersion the firms inference about aggregate shocks is very gradual yet in the aggregate prices adjust rapidly in response to aggregate nominal shocks when an aggregate shock occurs firms mistakenly attribute it to firm specific shocks but adjust prices nevertheless since the exact nature of the shock matters little for its optimal pricing decision

a positive theory of flexibility in accounting standards abstract we develop a positive theory of accounting standards when standards generate network externalities and differ in the amount of reporting discretion or flexibility they provide firms we evaluate expected value maximizing firms preferences between two standards regimes rigid and flexible as the number of firms subject to each standard varies as the organization of the securities market varies and as the mapping from the underlying economics of the firms transactions to the accounting reports produced under the two standards vary we also compare firms preferences between the two regimes to the preferences of profit maximizing traders in the firms securities

industrial districts district effect and firm size the italian evidence the paper analyses the transformations that occurred in the italian industrial districts ids by empirically estimating the role of the district effect on firm performance over recent decades given their ability to manage upper level and size related business practices medium sized firms emerge as local players best able to exploit their embeddedness in the districtual system and leverage districtual assets however these effects are only present in firms belonging to the industrial specialization of the district an additional result of the empirical analysis shows that the leading role of medium sized firms is critical in younger districts where medium sized firms lead the renewal of the id and its adaptation to the changes of the competitive environment as most italian ids are specialized in traditional sectors this evidence contributes to understanding the mechanisms connecting the competitiveness of the traditional industry and its localised organizational structure the paper also provides a discussion of the future of ids including the relevance of the evolutionary stage of the district on the performance of affiliated firms and their reproducibility over time

the organisational factor and the growth of firms the paper analyses the role played by the managerial factor in conditioning the rhythm and intensity of firms growth it argues that growth has to be intended as a measure of the capability of the firm to successfully cope with the problems arising from increasing complexity according to a penrosean perspective such a capability may be bounded at any given time by a lack of those internal managerial resources which provide the firm with a set of uniquely valuable services and which create a differential advantage over its competitors in a dynamic capabilities view such advantages need to be continuously modified through a process of search and selection this has assumed peculiar relevance in the face of the hyper competition regime characterising the more recent phase of industrial development asking firms executives to develop an increasing ability to find creative solutions to continuously moving targets therefore making the management function a key driver to change

optimal monetary policy when information is market generated endogenous i e market generated signals observed by firms have crucial implications for monetary policy when information is endogenous firms gather a demand signal from their market that is both real and nominal as a result the traditional surprise channel of monetary policy is absent instead monetary policy works through a signaling channel as it affects firms information through the demand signal the optimal policy is then the signaling policy i e the policy that maximizes the information content of the demand signal in our setup the signaling policy targets a positive correlation between money supply and prices which emphasizes the natural response of prices to real shocks on the contrary in the more traditional case of exogenous information optimal monetary policy would stabilize prices as it acts through the surprise channel we show that the signaling policy is optimal regardless of the amount of attention that firms pay to central bank communication

structural cycles and industrial policy alignment the private public nexus in the emilian packaging valley the article investigates changes in the interaction between business organisations local governments and public technology intermediaries resulting from business organisations shifts towards higher value product segment opportunities specifically we analyse how local governments can or not align their industrial policies to the industrial transformations both technological and organisational underpinning firms value creation capture dynamics the concept of structural cycle is introduced here to study the two interdependent processes of technology transition and organisational reconfiguration characterising those firms shifting towards higher value product segments this private public nexus is investigated in the emilian packaging valley context the mixed method study focuses on the case of ima spa its shifts from the food to the pharmaceutical value product segment of the packaging machine industry and its changing relationships with regional public policies and institutions a number of industrial policy implications for sustainable value creation dynamics in local production systems are finally derived

learning unlearning and forgetting processes in industrial districts this paper proposes a conceptual framework on knowledge accumulation and depletion in industrial districts ids the framework introduces three types of endogenous cognitive processes namely learning forgetting and unlearning affected by internal and external dynamics such processes determine the reconfiguration of the id cognitive structure based on the expansion and contraction of local knowledge we apply the framework to three empirical cases the stoke on trent ceramic id the prato textile id and the macerata fermo footwear ids the empirical analysis describes the reconfiguration of the id cognitive structure in relation to different cross boundary relations such as the introduction of a new policy technological change and internationalisation the results inform us that the contraction of some productive specialisations through forgetting may not be just the prelude of decline but rather a condition fostering the exploration of new learning opportunities within paths of manufacturing recovery

bias and the commitment to disclosure this paper studies the propensity of firms to commit to disclose information that is subsequently biased in the presence of other firms also issuing potentially biased information an important aspect of such an analysis is the fact that firms can choose whether to disclose or withhold information we show that allowing the number of disclosed reports to be endogenous introduces a countervailing force to some of the empirical predictions from the prior literature for example we find that as more firms issue reports or as the correlation across firms cash flows increases the firm biases its report less however when we treat firms disclosure choices as endogenous we show that the number of firms that commit to disclose decreases as the correlation across these cash flows increases and this in turn offsets the direct effect of the correlation on bias this paper was accepted by mary barth accounting

smart specialisation strategies and industrial modernisation in european regions theory and practice based on a seminal policy paper foray et al 2009 the smart specialisation strategies s3 approach was integrated into the reformed cohesion policy of the european union for 2014 20 this large scale european experience provides a unique case study of a new type of industrial policy particularly oriented towards the modernisation of industrial sectors in this paper we briefly review the fundamentals of the s3 approach we identify and discuss the main properties of s3 that make it particularly suited to the problem of sectoral modernisation in the context of a mature economy in the final part we describe the designing of this policy which represents a crucial point whilst the objective of modernising traditional sectors is not in itself anything new the way of proceeding within the s3 framework is relatively new and innovative

optimal monetary policy with uncertain fundamentals and dispersed information this paper studies optimal monetary policy in a model where aggregate fluctuations are driven by the private sector s uncertainty about the economy s fundamentals information on aggregate productivity is dispersed across agents and there are two aggregate shocks a standard productivity shock and a noise shock affecting public beliefs about aggregate productivity neither the central bank nor individual agents can distinguish the two shocks when they are realized despite the lack of superior information monetary policy can affect the economy s relative response to the two shocks as time passes better information on past fundamentals becomes available the central bank can then adopt a backward looking policy rule based on more precise information about past shocks by announcing its response to future information the central bank can influence the expected real interest rate faced by forward looking consumers with different beliefs and thus affect the equilibrium allocation if the announced future response is sufficiently aggressive the central bank can completely eliminate the effect of noise shocks however this policy is typically suboptimal as it leads to an excessively compressed distribution of relative prices the optimal monetary policy balances the benefits of aggregate stabilization with the costs in terms of cross sectional efficiency copyright wiley blackwell

capabilities and habitat in industrial renewal the case of uk textiles the paper develops an ecological approach to explore conditions for industrial renewal in the uk textiles and apparel sector and the possibilities for policy the authors argue that the material legacy of deindustrialisation conditions the opportunities for survivor firms and creates specific sub sectoral industrial ecologies literature from economics business studies development and ecological studies is used to outline a framework that allows different possible relations between firm capability and local habitat two subsectors carpets and apparel are used to explore the notion of interaction between firm capability and ecology though the context of deindustrialisation is similar in some respects the specific conditions provide quite distinctive opportunities for renewal in carpets relatively larger firms have more successfully co evolved with retailers through various kinds of mutuality in apparel a workshop sector of mainly small and micro firms frequently struggles with predatory behaviour by much larger retailers the implication of this analysis is that industrial policy needs to be grounded in analysis of the capabilities habitat interplay focusing on areas where conditions are favourable or can be improved through supporting firm capabilities and modifying supply chain behaviours the concepts and analysis are relevant for considering other industries and contexts where industrial renewal depends on producer firms and the ecology in which they operate