integrated inventory models considering the two level trade credit policy and a price negotiation scheme abstract this paper develops the integrated inventory models with permissible delay in payment in which customers demand is sensitive to the buyer s price the models consider the two level trade credit policy in the vendor buyer and buyer customer relationships in supply chain management a simple recursive solution procedure is proposed for the integrated models to determine the buyer s optimal pricing and production order strategy although the total profit from the buyer and vendor increases together the buyer s share lessens to compensate the buyer s loss due to the cooperative relationship a negotiation system is presented in order to allocate the profit increase to the vendor and buyer to determine the pricing and production order strategy a numerical example and sensitivity analysis are provided to illustrate the proposed model the results indicate that the total profit from the buyer and vendor together can increase although a price discount is given to the buyer in the proposed models

credit financing in economic ordering policies of deteriorating items this paper presents the economic ordering policies of deteriorating items in the presence of trade credit using a discounted cash flows dcf approach a dcf approach permits a proper recognition of the financial implication of the opportunity cost and out of pocket costs in inventory analysis it also permits an explicit recognition of the exact timing of cash flows associated with an inventory system a comprehensive sensitivity analysis has also been done

a review of trade credit literature opportunities for research in operations abstract trade credit arises when a buyer delays payment for purchased goods or services its nature has predominantly been an area of inquiry for researchers from the disciplines of finance marketing and economics but it has received relatively little attention in other domains in our article we provide an integrative review of the existing literature and discuss conflicting study outcomes we organize the relevant literature into seven areas of inquiry and analyze four in detail trade credit motives order quantity decisions credit term decisions and settlement period decisions additionally we derive a detailed agenda for future research in these areas

fiscal policy cycles and public expenditure in developing countries the paper studies empirically the fiscal policy instruments by which governments try to influence election outcomes in 24 developing countries for the 1973 1992 period the study finds that the main vehicle for expansionary fiscal policies around elections is increasing public expenditure rather than lowering taxes and public investment cycles seem particularly prominent institutional mechanisms which constrain discretionary expenditure policies and which strengthen fiscal control are therefore worthwhile considering to prevent opportunistic policy making around elections

an incentive compatible solution for trade credit term incorporating default risk abstract this paper studies the optimal trade credit term decision in an extended economic ordering quantity eoq framework that incorporates a default risk component a principal agent bilevel programming model with costs minimization objectives is set up to derive the incentive compatible credit term the supplier determines the credit term as the leader in the first level programming by balancing her his financing capacity with the retailer s default risk order behavior and cost shifting at the second level the retailer makes decisions on ordering and payment time by reacting on the term offered by the supplier a first order condition solution procedure is derived for the bilevel programming when credit term is confined within the practically feasible interval two key results are obtained the condition to derive incentive compatible credit term and an equation system to derive threshold default risk criterion filtering retailers suitable for credit granting numerical experiments show that the capital cost of the supplier is the most important factor determining the credit term default risk acts like a filtering criterion for selecting retailers suitable for credit granting empirical evidence supporting our theoretical considerations is obtained by estimating three panel econometric models using a dataset from china s listed companies

the dynamics of leverage in a demand driven model with heterogeneous firms abstract this paper introduces heterogeneous microeconomic behavior into a demand driven macroeconomic model in order to study the joint dynamics of leverage and capital accumulation by identifying the links between firm level variables and aggregate quantities the paper contributes toward a reformulation of the minskyan formal analysis that explicitly considers the role of microeconomic factors in generating macroeconomic instability the aggregation of heterogeneous agents is not only performed numerically as in traditional agent based models but also by means of an innovative analytical methodology originally developed in statistical mechanics and recently imported into macroeconomics the distinctive feature is in that the joint analysis of the numerical and analytical solutions of the model sheds light on the effects of financial fragility at the firm level on the dynamics of the macroeconomy in particular the analysis of steady state and stability properties of the system provide additional insights on the role of behavioral and size heterogeneity of firms for the stocks of aggregate debt and capital

cash flow investment and keynes minsky cycles this paper analyzes a dynamic model with 1 an investment function that emphasizes cash flow 2 a keynesian macroeconomic framework that determines cash flow endogenously 3 a dynamic labor market model that drives wage and price adjustments and 4 boundedly rational expectations simulations from the calibrated model generate endogenous cycles with characteristics described in hyman minsky s research the cycle arises from the link between investment interest rates debt service and cash flow the amplitude and frequency of the cycle are related to the importance of cash flow for investment the dynamics of inflation and the distribution of income

analysis of global bifurcations in a market share attraction model in this paper we demonstrate how the global dynamics of an economic model can be analyzed in particular as an application we consider a market share attraction model widely used in the analysis of interbrand competition in marketing theory we analyze the local and global dynamic properties of the resulting two dimensional noninvertible dynamical system in discrete time the main result of this paper is given by the study of some global bifurcations that change the structure of the attractors and their basins these bifurcations are investigated by the use of critical curves a powerful tool for the analysis of the global properties of noninvertible two dimensional maps 2000 elsevier science b v all rights reserved jel classixcation e32 m30

a theory of political cycles abstract we study how the proximity of elections affects policy choices in a model in which policymakers want to improve their reputation to increase their reelection chances policymakers equilibrium decisions depend on both their reputation and the proximity of the next election typically incentives to influence election results are stronger closer to the election for a given reputation level as argued in the political cycles literature and these political cycles are less important when the policymaker s reputation is better our analysis sheds light on other agency relationships in which part of the compensation is decided upon infrequently

the new keynesian economics preface 1 from keynesian to new keynesian economics 2 keynesian microfoundations in historical perspectives part i real rigidities 3 the labour market and real wage rigiditry 4 credit rationing and imperfect capital markets 5 real rigidities in the goods market part ii nominal rigidities introduction 6 rational models of irrational behaviour 7 price setting with adjustment cost 8 real and nominal price rigidity further issues part iii coordination failures and hysteresis 9 coordination failures 10 hysteresis conclusions

a near rational model of the business cycle with wage and price inertia this paper presents a model in which insignificantly suboptimal behavior causes aggregate demand shocks to have significant real effects the individual loss to agents with inertial price wage behavior is second order in terms of the parameter describing the shock while the effect on real economic variables is first order thus significant changes in business activity can be generated by anticipated money supply changes provided that some agents are willing to engage in nonmaximizing behavior which results in small losses

investment confidence corporate debt and income fluctuations in this paper we present a macroeconomic model with new keynesian features which endogenously generates dynamic paths of income and the stock of corporate debt of a cyclic and chaotic nature from the market clearing condition on goods and money markets we derive the dynamic paths of income and corporate debt whose stability properties depend upon the propensity to invest out of the flow of internally generated funds which in turn is a positive function of income if it is relatively low the dynamic paths on income and corporate debt converge to their steady state long run values when the propensity to invest is neither too low nor too high the system can exhibit either bounded cycles or chaotic dynamics finally if it exceeds a critical upper value an explosive growth of debt occurs and a financial crisis is likely to ensue

war politics an economic rational voter framework the frequency of foreign conflict initiations in the united states is found to be significantly greater following the onset of recessions during a president s first term than in other periods the authors develop an economic theory of the political use of wars which links the election cycle war decisions and economic performance consistent with the observed relationships among these events an incumbent leader with an unfavorable economic performance record may initiate a war to force the learning of his war leadership abilities and thus salvage with some probability his reelection this obtains despite voter rationality and informational symmetry copyright 1995 by american economic association

optimal price discounting and lot sizing policies for perishable items in a supply chain under advance payment scheme and two echelon trade credits abstract many researchers have assumed that a retailer announces price discount to motivate market sales when he has competition in markets unanticipated surplus in inventory or change in the production run of a product but in real life situations there are retailers who announce price discount offer under advance payment ap scheme prior to the selling period due to the advancement of internet and on line money transactions the ap scheme is common and useful to decrease the estimation error in demand and to increase the market sales when the items are arrived to the inventory the priority will be given to the customers who use ap scheme this paper considers a supply chain where the supplier provides the retailer a full trade credit period for payments whereas the retailer offers the partial trade credit to his customers i intend to develop an economic order quantity eoq based model with perishable items in order to investigate the retailer s inventory system as a cost minimization problem under ap scheme and two echelon trade credit option mathematical theorems are developed to determine optimal price discounting and lot sizing policies and a lot of managerial phenomena are obtained through numerical examples

optimal ordering policies when the supplier provides a progressive interest scheme abstract in fact most credit card issuers or home equity banks frequently offer cardholders or customers a teaser interest rate say i 1 which is significantly lower than the regular interest rate of i 2 with i 2 i 1 for only 6 months or a year say m 2 to lure new customers from their competitors consequently the customer faces a progressive interest charge from the bank if the customer pays the outstanding balance by the grace period say m 1 which is generally 25 days then the bank does not charge any interest if the outstanding amount is paid after m 1 but by m 2 with m 2 m 1 then the bank charges the customer the teaser interest rate of i 1 on the unpaid balance if the customer pays the outstanding amount after m 2 then the bank charges the regular interest rate of i 2 in this paper we first establish an appropriate eoq model for a retailer when the bank or the supplier offers a progressive interest charge and then provide an easy to use closed form solution to the problem

endogenous elections electoral budget cycles and canadian provincial governments the existence of manipulative electoral budget cycles and opportunistic election setting is examined in the framework of a parliamentary democracy empirical tests are conducted using a pooled time series cross section data set derived from canadian provincial governments over the 1962 1992 period evidence in support of the electoral budget cycle hypothesis but not the opportunistic election timing hypothesis is obtained

a fuzzy genetic algorithm with varying population size to solve an inventory model with credit linked promotional demand in an imprecise planning horizon abstract a genetic algorithm ga with varying population size is developed where crossover probability is a function of parents age type young middle aged old etc and is obtained using a fuzzy rule base and possibility theory it is an improved ga where a subset of better children is included with the parent population for next generation and size of this subset is a percentage of the size of its parent set this ga is used to make managerial decision for an inventory model of a newly launched product it is assumed that lifetime of the product is finite and imprecise fuzzy in nature here wholesaler producer offers a delay period of payment to its retailers to capture the market due to this facility retailer also offers a fixed credit period to its customers for some cycles to boost the demand during these cycles demand of the item increases with time at a decreasing rate depending upon the duration of customers credit period models are formulated for both the crisp and fuzzy inventory parameters to maximize the present value of total possible profit from the whole planning horizon under inflation and time value of money fuzzy models are transferred to deterministic ones following possibility necessity measure on fuzzy goal and necessity measure on imprecise constraints finally optimal decision is made using above mentioned ga performance of the proposed ga on the model with respect to some other gas are compared

optimal pricing and ordering policy under permissible delay in payments abstract many researchers have assumed that the selling price is the same as the purchase cost and developed various eoq models for a retailer when the supplier offers a permissible delay in payments in this paper we complement the shortcoming of their models by considering the difference between the selling price and the purchase cost we then develop an algorithm for a retailer to determine its optimal price and lot size simultaneously when the supplier offers a permissible delay in payments our theoretical result contradicts to their conclusion that the economic replenishment interval and order quantity generally increases marginally under the permissible delay in payments

corporate performance and managerial remuneration an empirical analysis abstract economic theories of efficient compensation predict a positive relationship between executive pay and corporate performance and yet efforts to document this relationship have been largely unsuccessful in this paper we argue that previous cross sectional studies have omitted important variables which seriously bias their results using data that focus on individual executives over time we find that executive compensation is strongly positively related to corporate performance as measured by shareholder return and growth in firm sales the results are robust to the stock market performance measure utilized

optimal manufacturer s replenishment policies in the epq model under two levels of trade credit policy abstract in 2007 huang proposed the optimal retailer s replenishment decisions in the epq model under two levels of trade credit policy in which the supplier offers the retailer a permissible delay period m and the retailer in turn provides its customer a permissible delay period n with n

stackelberg solution in a vendor buyer supply chain model with permissible delay in payments abstract in practice vendors or sellers often offer their buyers a fixed credit period to settle the account the benefits of trade credit are not only to attract new buyers but also to avoid lasting price competition on the other hand the policy of granting a permissible delay adds not only an additional cost but also an additional dimension of default risk to vendors in this paper we will incorporate the fact that granting a permissible delay has a positive impact on demand but negative impacts on both costs and default risks to establish vendor buyer supply chain models then we will derive the necessary and sufficient conditions to obtain the optimal solution for both the vendor and the buyer under non cooperative stackelberg equilibrium finally we will use two numerical examples to show that 1 granting a permissible delay may significantly improve profits for both the vendor and the buyer 2 the sensitivity analysis on the optimal solution with respect to each parameter and 3 the comparisons between nash and stackelberg solutions

what is new keynesian economics this research was supported by the national science foundation i am grateful to george williams for help with the data and to steven allen laurence ball olivier j blanchard timothy bresnahan charles calomiris dennis carlton robert chirinko russell cooper stanley fischer herschel grossman r glenn hubbard david laidler john leahy assar lindbeck n gregory mankiw david romer julio rotemberg dennis snower john taylor andrew weiss and two anonymous referees for comments on one or more earlier drafts i am also indebted to michael parkin and edmund s phelps for helping to establish the etymology of the phrase new keynesian

ergodic fluctuations in deterministic economic models abstract nonperiodic business fluctuations are shown to exist with positive measure generically and to behave like stationary stochastic processes in the standard dynamic macro model the implication is that so called chaotic fluctuations are probable for random initial conditions in a large class of recursive economies

small menu costs and large business cycles a macroeconomic model of monopoly i introduction the conflict between modern neoclassical and traditional keynesian theories of the business cycle centers upon the pricing mechanism in neoclassical models prices are fully flexible they represent the continuous optimization of economic agents and the continuous intersection of supply and demand in keynesian models prices are often assumed to be sticky they do not necessarily equilibrate all markets at all times one of the reasons for the resurgence of the equilibrium approach to macroeconomics has been the absence of a theoretical underpinning for this keynesian price stickiness this note shows that sticky prices can be both privately efficient and socially inefficient the business cycle results from the suboptimal adjustment of prices in response to a demand shock to the extent that policy can stabilize aggregate demand it can mitigate the social loss due to this suboptimal adjustment in some keynesian models prices are simply exogenously fixed 2 in others agents must set their prices in advance of the transaction date the act of altering a posted price is certainly costly these costs include such items as printing new catalogs and informing salesmen of the new price yet these menu costs are small and therefore generally perceived as providing only a weak foundation for these fixed price models however this inference is flawed small menu costs can cause large welfare losses the claim that price adjustment costs are small does not rebut the claim that they are central to understanding economic fluctuations

an integrated vendor buyer inventory model with order processing cost reduction and permissible delay in payments trade credit plays an important role in financing for many businesses and industries for the buyers purchased inventory can be considered to be financed in whole or in part with permissible delay in payments during the purchasing process on the other hand both the vendor and buyer take part in order processing cost reduction by applying information technologies such as edi electronic data interchange the order processing cost can also be reduced by adding certain capital investments and this will affect the lot size decisions this article develops an integrated inventory model to determine the optimal inventory policy under conditions of order processing cost reduction and permissible delay in payments and shows that the total annual variable cost function possesses some kinds of convexities a solution procedure is provided to determine the optimal order policy finally a numerical example is presented to illustrate the solution procedure

sustainable trade credit and replenishment decisions with credit linked demand under carbon emission constraints abstract in this paper we consider issues of sustainability in the context of joint trade credit and inventory management in which the demand depends on the length of the credit period offered by the retailer to its customers we quantify the impacts of the credit period and environmental regulations on the inventory model starting with some mild assumptions we first analyze the model with generalized demand and default risk rates under the carbon cap and trade policy and then we make some extensions to the model with the carbon offset policy we further analytically examine the effects of carbon emission parameters on the retailer s trade credit and replenishment strategies finally a couple of numerical examples and sensitivity analysis are given to illustrate the features of the proposed model which is followed by concluding remarks

equilibrium selection in a nonlinear duopoly game with adaptive expectations abstract we analyze a nonlinear discrete time cournot duopoly game where players have adaptive expectations the evolution of expected outputs over time is generated by the iteration of a noninvertible two dimensional map the long run behavior is characterized by multistability that is the presence of coexisting stable consistent beliefs which correspond to nash equilibria in the quantity space hence a problem of equilibrium selection arises and the long run outcome strongly depends on the choice of the players initial beliefs we analyze the basins of attraction and their qualitative changes as the model parameters vary we illustrate that the basins might be nonconnected sets and reveal the mechanism which is responsible for this often neglected kind of complexity the analysis of the global bifurcations which cause qualitative changes in the topological structure of the basins is carried out by the method of critical curves

retailer s optimal replenishment decisions with credit linked demand under permissible delay in payments abstract usually it is assumed that the supplier would offer a fixed credit period to the retailer but the retailer in turn would not offer any credit period to its customers which is unrealistic because in real practice retailer might offer a credit period to its customers in order to stimulate his own demand moreover it is observed that credit period offered by the retailer to its customers has a positive impact on demand of an item but the impact of credit period on demand has received a very little attention by the researchers to incorporate this phenomenon we assume that demand is linked to credit period offered by the retailer to the customers this paper incorporates the concept of credit linked demand and develops a new inventory model under two levels of trade credit policy to reflect the real life situations an easy to use algorithm is developed to determine the optimal credit as well as replenishment policy jointly for the retailer finally numerical example is presented to illustrate the theoretical results followed by the sensitivity of various parameters on the optimal solution

real business cycles in this paper we demonstrate how certain very ordinary economic principles lead maximizing individuals to choose consumption production plans that display many of the characteristics commonly associated with business cycles our explanation is entirely consistent with i rational expectations ii complete current information iii stable preferences iv no technological change v no long lived commodities vi no frictions or adjustment costs vii no government viii no money and ix no serial dependence in the stochastic elements of the environment we also provide a completely worked out example of the type of artificial economy we have in mind the time series properties of the example exhibit some major features of observed business cycles although this type of model may not be capable of explaining all of the regularities in actual business cycles we believe that it provides a useful well defined benchmark for assessing the relative importance of factors e g monetary disturbances