low inflation the behavior of financial markets and institutions this paper provides a broad overview of the potential impact of low inflation deflation on u s financial markets and institutions it is argued that the contemporary experience of japan and the historical experience of the united states in the 1920s and 1930s offer only limited insights into the potential impact of low inflation deflation on today s u s financial system a number of potential implications are discussed including a decline in secondary market trading and a trend towards reintermediation in addition low inflation deflation is likely to have a material effect on bank duration and convexity exposures

was debt deflation operative during the great depression i introduction important questions remain regarding the transmission mechanism that linked falling prices and falling output during the great depression despite recent analysis suggesting that the worldwide deflation was initiated and propagated internationally by negative impulses associated with the interwar gold standard 1 a key issue is whether the deflation during the early 1930s was unanticipated prior to the onset of the depression if it was at least largely unanticipated then when combined with rapidly rising nominal debt issuance bernanke s 1983 credit view explanation and extension of fisher s 1933 original debt deflation hypothesis helps explain the persistent monetary nonneutralities present during the depression these nonmonetary financial theories hold that events in the financial markets other than shocks to the money supply can account for the paths of output and prices without invoking irrational behavior on the part of agents in his debt deflation hypothesis fisher asserted that nominal overindebtedness and deflation are the dominant forces that account for great depressions specifically he argued that given nominally denominated debt contracts a protracted fall in prices and nominal incomes substantially increased real debt burdens led to debtor insolvency and lowered aggregate demand in a continuing spiral this fall in demand contributed to a further decline in the price level and thus further increases in the real burden of debt bernanke 1983 provided additional details to help explain fisher s debt deflation hypothesis he argued that in normal circumstances an initial decline in prices merely reallocates wealth from debtors to creditors such as banks usually such wealth redistribution has no first order impact on the economy however in the face of large shocks deflation in the prices of assets forfeited to banks by debtor bankruptcies leads to a decline in the nominal value of assets on bank balance sheets for a given value of bank liabilities also denominated in nominal terms this deterioration in bank assets threatens insolvency as banks reallocate assets away from loans to safer government securities some borrowers particularly small ones are unable to obtain funds often at any price furthermore if bank portfolio reallocation is long lived the shortage of credit for these borrowers helps explain the persistence of the downturn as the disappearance of bank financing forces lower expenditure plans aggregate demand declines which again contributes to the downward deflationary spiral 2 analyses such as cecchetti 1992 which carefully demonstrate that the deflation was anticipated at short horizons once it started do not bear directly on our discussion 3 instead to show that debt deflation was an important part of the contraction of the early 1930s it is important to document the accumulation of substantial medium and long term debt prior to 1929 in addition the finding that deflation could have been anticipated at horizons of 3 6 months does suggest that simple debt deflation theories for the propagation of the great depression must rely on the failure of agents to anticipate deflation several years in advance not several quarters in advance cecchetti 1992 note 26 we will argue that debt deflation was operative both because of a rise in nominally denominated debt and because the deflation in the early 1930s was unanticipated when this debt was being incurred we demonstrate three facts consistent with this statement of the debt deflation credit view explanation of the depression first we document that private medium and long term nominal debt during the 1920s exhibited a combination of a high initial value relative to income and a rapid growth rate that is unparalleled in a consistent data set covering more than half a century 4 second following the seminal work of evans and wachtel 1993 estimation results from a markov switching model of the price process during the entire interwar period suggest that the debt issued during the decade preceding the downturn occurred in a stable price regime and that the probability of remaining in this stable price regime was 0

the fisher hypothesis and the forecastability and persistence of inflation abstract for the period 1860 to 1939 the simple correlation of the u s commercial paper rate with the contemporaneous inflation rate is 0 17 the corresponding correlation for the period 1950 to 1979 is 0 71 this paper attributes this apparent change in the fisher relation to differences in the stochastic process of inflation rather than a change in any structural relationship between interest rates and expected inflation contrary to recent claims in the literature there is little evidence of inflation non neutrality in data from the pre world war i period

nonmonetary effects of the financial crisis in propagation of the great depression this paper examines the effects of the financial crisis of the 1930s onthe path of aggregate output during that period our approach is complementary to that of friedman and schwartz who emphasized the monetary impact of the bank failures we focus on non monetary primarily credit related aspects of the financial sector output link and consider the problems of debtors as well as those of the banking system we argue that the financial disruptions of 1930 33 reduced the efficiency of the credit allocation process and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand evidence suggests that effects of this type can help explain the unusual length and depth of the great depression this abstract was borrowed from another version of this item

economics of scale versus technological change an aggregate product function for switzerland in estimating a production function for an economy constant returns to scale has been a traditionally maintained hypothesis in modelling switzerland s gross output as a function of labor capital and imports a general functional form is selected which displays increasing returns to scale and is not hicks neutral it is a technology which is labor saving import saving and capital using this paper also quantifies the mismeasurements associated with using a constant returns to scale model to estimate such variables as own elasticities of demand elasticities of substitution impacts on factor income and rate of technical progress

estimation of scale economies underlying growth and productivity the empirical implications of data aggregation estimation of scale economies underlying growth and productivity patterns is typically based on aggregated data raising questions about the potential for aggregation biases this paper provides empirical evidence on the existence and patterns of such biases we use a cost based model to estimate short long run and internal external scale effects for u s manufacturing data at different aggregation levels our results suggest that aggregation biases in such a model are not substantive also internal scale economies seem more appropriately represented by the aggregate data whereas more disaggregated data appears preferable for estimation of external or spillover effects that occur between industries or sectors

was there a peso problem in the u s term structure of interest rates 1979 1982 during the period following october 1979 through 1982 the u s federal reserve allowed interest rates to fluctuate widely in contrast to its previous policy of targeting these rates in the 1970s the policy was abandoned in 1982 in favor of an operating procedure that reduced the variation in interest rates this paper implements an estimation method to identify from the term structure of eurodollar returns the market s beliefs that the federal reserve may revert to interest rate targeting the model is not rejected and gives plausible estimates of the probability of a switch in monetary regimes copyright 1991 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

internationalization and specialization in the european automotive components sector implications for the hollowing out thesis sadler d 1999 internationalization and specialization in the european automotive components sector implications for the hollowing out thesis reg studies 33 109 119 this paper explores two questions the geographical conditions associated with an altered relationship between automobile assembly and component firms in europe and the ways in which automotive component firms have restructured their operations on a global basis the first section reviews the interplay between positional balance and spatial reorganization highlighting the significance of the strategies of leading component manufacturers these strategies are reviewed in depth in a subsequent section which pays particular attention to processes of internationalization and specialization a further exploratory section asks whether in the light of these trends a process of hollowing out might be taking place within the european automobile industry it is concluded that important issues to be addressed include the balance between invest

was the deflation during the great depression anticipated evidence from the commodity futures market futures prices were well above spot prices for most commodities during most of the great depression evidently the spectacular declines in agricultural prices caught many people by surprise based on the historical correlations between commodity prices and consumer prices commodity markets anticipated stable consumer prices during the first year of the great depression the dramatic drop in nominal treasury bill yields thus should be read as a drop in ex ante real rates later in the great depression markets anticipated deflation but not as severe as actually occurred copyright 1992 by american economic association

upgrading primary production a global commodity chain approach abstract global commodity chain gcc analysis has been concerned mainly with examining power relations in global manufacturing industries although it has been preoccupied increasingly by the question of how developing country dc producers can upgrade this paper extends gcc analysis to traditional primary commodities where international traders exercise the driving role and suggests a new agenda for their upgrading in dcs based upon public action

were price changes during the great depression anticipated abstract this paper reassesses whether the large swings in prices during the 1930 s were anticipated we argue that uncertainty about monetary fiscal and exchange rate policies induced systematic differences between the rate of price change expected by economic agents at the time and the time series forecasts of inflation our analysis of nominal interest rates and ex post inflation strongly supports this view in fact our results suggest that the deflation of the early depression years and the inflation that followed were both largely unanticipated

globalisation and unequalisation what can be learned from value chain analysis although many have gained from the process of globalisation there remains a stubbornly large number of people living in absolute poverty and a rise in inequality within and between countries the issue is thus not whether to participate in the global economy but how to do so in a manner which provides for sustainable and equitable income growth this study shows how value chain analysis can be used to chart the growing disjuncture between global economic activity and global income distribution and to provide causal explanations for this outcome in so doing value chain analysis provides valuable insights into policy formulation and implementation

openness and wage inequality in developing countries the latin american challenge to east asian conventional wisdom the experience of east asia in the 1960s and 1970s supports the theory that greater openness to trade tends to narrow the wage gap between skilled and unskilled workers in developing countries in latin america since the mid 1980s however increased openness has widened wage differentials this conflict of evidence is probably not the result of differences between east asia and latin america instead the conflict is probably the result of differences between the 1960s and the 1980s specifically the entry of china into the world market and perhaps the advent of new technology biased against unskilled workers

trust in buyer supplier relations the case of the turkish automotive industry while the topic of interorganisational trust is gaining attention in academic literature research on developing countries remains sparse with the premise that certain contextual elements may be more relevant for developing countries we expand on existing models by testing the effect of initial support use of just in time delivery and informal commitment to predict the trust that turkish automotive suppliers have towards their buyers the results support the predictions that soft technologies and informal commitment increase trust

trade and industrial policy on an uneven playing field the case of the deciduous fruit canning industry in south africa the deciduous fruit canning industry dfci is a resource and labor intensive industry with a high trade ratio it offers the prospect of being a significant source of employment and export earnings for a number of southern hemisphere countries which enjoy a considerable comparative advantage market distortions severely constrain this outcome however most importantly a combination of protection and subsidies in the industrially advanced countries in addition as in other sectors globalization is increasingly associated with processes in which value added activities are located in the major markets of the industrialized countries this paper examines the dfci in south africa and explores the consequences of market distortions and the shifting location of profitable activities for both industrial and trade policy in that country

financial factors in the great depression eginning with irving fisher 1933 and john maynard keynes 1931 b 1963 macroeconomists have argued that financial markets were important sources and propagators of decline during the great depression turning points during the depression often coincided with or were preceded by dramatic events in financial markets stock market collapse waves of bankruptcy and bank failure and contractions in the money stock but the mechanism through which financial factors contributed to the depression has been a source of controversy as has been the relative importance of financial factors in explaining the origins and persistence of the depression this essay reviews the literature on the role of financial factors in the depression and draws some lessons that have more general relevance for the study of the depression and for macroeconomics i argue that much of the recent progress that has been made in understanding some of the most important and puzzling aspects of financial real links in the depression followed a paradigm shift in economics a central neglected theoretical piece of the story for financial factors was the allocative effects of imperfections in capital markets which can imply links between disruptions in financial markets and subsequent economic activity also the increasing emphasis on learning and path dependence in economics has helped to explain why financial shocks during the 1930s were so severe and why policy makers failed to prevent the depression

capital intensity in south african manufacturing and unemployment 1972 1990 this paper explores the changing structure of investment and employment in south africa s manufacturing sector during 1972 1990 it considers the hypotheses that poor employment performance and high levels of capital intensity have arisen as a consequence of the overexpansion of capital intensive sectors and distorted factor prices in the main these hypotheses are rejected instead it is argued that poor employment performance arises largely from political factors which have dulled the private sector s investment in labor intensive sectors have stifled the development of the informal sector have held back productivity growth in manufacturing and have reduce the inflow of foreign direct investment although the paper is not primarily focused on the emerging policy agenda in the postapartheid era the data contained in this analysis would not appear to support the beliefs either that wages should be reduced or that the state should refrain from actively affecting allocative decisions

sustainable supply chain management a case study of british aerospace bae systems sustainability is viewed as possessing environmental economic and social dimensions the sustainability approaches adopted by individual businesses and the supply chains to which they belong must include these facets these three components of sustainability are collectively termed the triple bottom line or 3bl the idea of a triple bottom line which originated in the 1990s implies attending to the traditional financial aspects of an organisation as well as to the social and environmental criteria the economic aspect of the 3bl refers to profit making and attaining and sustaining competitive advantage through sustainability the environmental dimension involves factors relating to climate change global warming air land and water pollution or preservation and ozone layer depletion the social aspect involves health and safety issues community well being employment opportunities charities cultural sensitivities and requirements and organisational behaviour as global warming climate change and depletion of resources are on a rise alongside greater demand for improvement in business processes economic standards and technology it has become necessary to sustain processes along the value chain in order to contribute to sustainability this paper examines the drivers of sustainability and related key features based on extant literature and a case study an overview is given of the british aerospace bae systems sustainability initiatives and activities on the basis of the bae systems case study two resultant frameworks emerge that display the interdependence of the triple bottom line and the essential elements required for a sustainable supply chain

could stable money have averted the great contraction i introduction although over fifty years have elapsed since the onset of the great contraction controversy still swirls about the factors responsible for its depth and long duration a basic issue is the hypothesis due to friedman and schwartz 1963 that the great contraction would have been attenuated had the federal reserve not allowed the money stock to decline although the validity of the hypothesis has been a subject of much debate there is little empirical evidence directly addressing it a direct test of the friedman and schwartz hypothesis requires simulating the behavior of output under a counterfactual policy of stable money that approach was adopted by warburton 1966 friedman 1960 and modigliani 1969 none of whom constructed a model of the economy on the basis of which to conduct his test recently mccallum 1990 has used simulations from a macro model to show that his base rule with feedback would have avoided the severe decline in nominal income that occurred between 1929 and 1933 1 the extent to which his rule would have improved the behavior of nominal income depends on the value of the feedback coefficient mccallum s simulations however do not address the issue considered here of how a stable money rule would have performed in this paper we present simulations that focus on the stable money counterfactual our model is based on mccallum s but we use a more general framework than his that a estimates separate relations for output and the price level and b places no prior restrictions on the feedback from output and the price level to money our stable money counterfactual does not change the long term rate of money growth from that actually experienced and thus involves only short run changes in the behavior of the money supply we assume that dynamics embedded in the output and price relation are not especially sensitive to this type of policy change we simulate two variants of milton friedman s 1960 constant money growth rule the first a strong form of the rule assumes that the fed could quickly offset changes in the money multiplier by changes in high powered money and thus keep the money stock on the constant growth rate path in each quarter the second a weaker form of the rule assumes that the money multiplier is observed with a one quarter lag and the fed can only set the expected rate of growth of money conditional on last period information equal to the constant rate our basic simulation is derived from a model estimated for the 1921 1 1941 4 interwar period the results of this simulation buttress the views of friedman and schwartz had a constant money growth rule with an annual rate equal to the average 1921 41 rate of 2 95 percent been followed throughout the interwar period the great contraction would have been avoided real output would have declined from 1929 3 to 1933 1 but the order of magnitude of the cumulative change 11 1 to 21 6 percent and the annual rate of change 3 3 to 6 6 percent when the actual cumulative change was 36 2 percent and the annual rate of change was 12 1 percent would have been comparable to other recessions in the nineteenth and twentieth centuries in the basic simulation we assume that the output and price relations remained stable over the entire interwar period the extraordinary economic conditions of the great contraction could have arguably shifted the output and price relations thus we also present an alternative simulation that uses estimates of these relations based on the 1920s data this simulation shows that a constant money growth rule with an annual rate equal to the 1921 29 average of 3 29 percent would have prevented even a mild recession during the great contraction period section ii contains a brief survey of the continuing debate over the cause and propagation mechanism of the great contraction and its implications for the stable money hypothesis

energy performance contract models for the diffusion of green manufacturing technologies in china a stakeholder analysis from smes perspective abstract small and medium sized enterprises smes are significant to china s emission reduction programme this research aims to improve our understanding of the challenge of diffusing green manufacturing technologies among smes in china specifically this study examines the chinese government s effort to facilitate reduction of energy consumption among smes through energy performance contracts epcs to incentivize domestic manufacturers to adopt energy efficient measures eems in order to reduce demand for energy and corresponding drop in emissions the data is gathered from relevant epc stakeholders in the national motor upgrading demonstration project and its implementation in dongguan city which is based on 30 in depth interviews and 6 focus group discussions using stakeholder analysis this study finds that guaranteed energy savings model is the favorite model in implementation given the gained benefits outweigh committed resources and the control capability overrides possible risks among the two core stakeholders the outcomes of this study may allow the government to have a clear understanding of stakeholder perception of the different epc models used in china so the design and deployment of these mechanisms can be improved

trade policy reform and the competitive response in kwazulu natal province south africa like many other formerly protected economies the liberalization of the external trade regime has placed new competitive pressures on south african enterprises detailed research in over 130 enterprises in the kwazulu natal kzn province of south africa shows the extent to which firms have been able to respond to these new competitive pressures and particularly on their ability to hear and to meet more demanding customers requirements inevitably the response has been varied but there are reasons to be concerned that the pace of adjustment has been suboptimal this reflects imperfections in information markets the challenges poses by the need for new social relations in production and the limited implementation of new supply sided policies designed to compensate firms for the reduction in protective barriers

the latte revolution regulation markets and consumption in the global coffee chain abstract coffee is a truly global commodity and a major foreign exchange earner in many developing countries the global coffee chain has changed dramatically as a result of deregulation new consumption patterns and evolving corporate strategies from a balanced contest between producing and consuming countries within the politics of international coffee agreements power relations shifted to the advantage of transnational corporations a relatively stable institutional environment where proportions of generated income were fairly distributed between producing and consuming countries turned into one that is more informal unstable and unequal through the lenses of global commodity chain analysis this paper examines how these transformations affect developing countries and what policy instruments are available to address the emerging imbalances

the spectre of deflation a review of empirical evidence what explains the widespread fear of deflation this article reviews the history of thought economic history and empirical evidence on deflation with a view to answering this question it also outlines informally the main effects of deflation in applied monetary models the main finding is that for both historical and contemporary deflations there are many open empirical questions that could be answered using the tools economists use to study inflation and monetary policy more generally qu est ce qui explique la peur tres repandue de la deflation ce memoire fait un tour d horizon de l histoire de la pensee economique de l histoire economique et des resultats empiriques quant aux effets de la deflation en vue de repondre a cette question on fait aussi echo informellement aux effets principaux de la deflation dans les modeles monetaires appliques ce qui ressort principalement de ce travail est que tant pour les deflations dans l histoire que dans le monde contemporain il y a bien des questions empiriques encore irresolues auxquelles on pourrait donner une reponse en utilisant l outillage mental que les economistes utilisent pour etudier l inflation et la politique monetaire plus generalement sp c tre n thing that is thought to be seen but has no material existence haunting presentiment of ruin war madness etc

governance of global value chains in response to food safety and certification standards the case of shrimp from vietnam summary we use global value chain gvc theory to understand governance of vietnam s shrimp farming industry we describe this gvc as buyer driven with important food safety standards imposed by governments of importing countries and new certification systems promoted by nongovernmental organizations ngos governance relations are clear between governments in importing countries and vietnam and between importers and ngos governance relations become more fragmented further down the chain where large numbers of small scale producers and traders operate this fragmentation may adversely affect access to the most lucrative markets and have the unanticipated effect of marginalizing small scale farmers and traders

hyperinflation the exchange rate and endogenous money post world war i germany revisited abstract we re examine the interaction of domestic and external factors in the german hyperinflation by extending frenkel s monetary model of the exchange rate to incorporate 1 endogeneity of the money supply with respect to government debt expected inflation and money wages 2 the direct impact of exchange rate depreciation on the domestic price level and 3 endogenous wage determination four equation estimates support each extension of the monetary model it appears that government deficit finance the collapse of the exchange rate and the monetary transmission of the wage price spiral were all crucial contributors to the price explosion

do stationary risk premia explain it all evidence from the term structure abstract predictable variations in excess returns have often been attributed to the presence of time varying risk premia in this paper we use an insight based upon new techniques from time series analysis to test whether stationary risk premia can alone explain the behavior of excess returns to long bonds relative to rolling over short rates surprisingly we reject this hypothesis using u s t bill returns we then show that either permanent shocks to the risk premia and or rationally anticipated shifts in the interest rate process could produce anomalous results

designing and implementing open book accounting in buyer supplier dyads a framework for supplier selection and motivation abstract though open book accounting oba is a well known practice in supply chain management the lack of guidelines to support managers to implement it effectively has been highlighted in the literature this paper discusses a methodology to support the selection of suppliers with whom to successfully cooperate in oba projects and the identification for each buyer supplier dyad of appropriate incentives to enable cost data disclosure the methodology has been developed using empirical findings from an action research the authors have conducted in close collaboration with an italian manufacturer of modular kitchens and 19 of its suppliers it emerges that the sourcing strategy and the nature of cost data disclosed should drive the buyer s decisions on how to use disclosed account data and how to select the most appropriate set of incentives to encourage suppliers participation in particular the sourcing strategy mainly affects the supplier s reaction to incentives and the uses of cost data shared while the nature of open books agreements primarily influences the buyer s attitude to commit resources to specific suppliers and therefore to activate the more costly incentives these findings have interesting implications for the identification of the suppliers with whom to collaborate in open books programs for the selection of incentives to mitigate suppliers natural reluctance to disclose cost data and for restrictions in the use of disclosed data to ensure that they are not abused within and outside the relation

changing beliefs and systematic rational forecast errors with evidence from foreign exchange this paper addresses a new interpretation to the appearance in the early 1980s of systematic errors in forecasting the dollar exchange rate following a change in the process of a fundamental variable market participants revise their beliefs about the process using bayes rule since the market does not immediately recognize the change forecast errors are on average wrong during a period when the market is rationally learning for conservative parameter values the learning behavior of the dollar exchange rate in the early 1980s appears consistent with about half of the dollar s underprediction implied by the forward market copyright 1989 by american economic association

interpreting the movements in short term interest rates this article uses modern asset pricing theory to examine the behavior of short term nominal interest rates over the past twenty five years the analysis investigates whether variation in the stochastic behavior of consumption growth and inflation can explain movements in the rate of interest the model estimated allows for taste shocks to utility the authors results reveal that much of the month to month movement in nominal interest rates reflects changes in the real rate and the risk premia in addition to inflationary expectations copyright 1992 by university of chicago press

collective efficiency growth path for small scale industry this study is concerned with the growth of small local industry in developing countries and explores one particular route for understanding and fostering such growth it focuses on the clustering of firms and the competitive advantage which they derive from local external economies and joint action captured in the concept of collective efficiency following a conceptual discussion the article explores the economic and institutional conditions which enhance or hinder collective efficiency this includes a case study which suggests that responding to opportunity and crisis requires shifting from mere reliance on external economies to joint action and from ascribed to earned trust

south african manufacturing industries catching up or falling behind this article argues that intra industry trade with developed countries is an important source of technology transfer south africa has an industrial structure that is suited to such trade but high costs and weak social capacity to assimilate new technology therefore reintegration into the world economy is likely to reinforce dependence on resource intensive industries in the short run this need not adversely affect economic growth but unless the quality and quantity of education and training are improved the prospects for rebuilding the technological capacity and catch up with oecd countries are bleak

who anticipated the great depression gustav cassel versus keynes and hayek on the interwar gold standard the intellectual response to the great depression is often portrayed as a battle between the ideas of friedrich hayek and john maynard keynes yet both the austrian and the keynesian interpretations of the depression were incomplete austrians could explain how a country might get into a depression bust following a credit fueled investment boom but not how to get out of one liquidation keynesians could explain how a country might get out of a depression government spending on public works but not how it got into one animal spirits by contrast the monetary approach of gustav cassel has been ignored as early as 1920 cassel warned that mismanagement of the gold standard could lead to a severe depression cassel not only explained how this could occur but his explanation anticipates the way that scholars today describe how the great depression actually occurred unlike keynes or hayek cassel analyzed both how a country could get into a depression deflation due to tight monetary policies and how it could get out of one monetary expansion

energy performance of dwelling stock in iceland system dynamics approach abstract despite the significant energy use in dwellings buildings have the highest energy savings potential among all sectors one of the main analytical challenges is how to capture the impact from inertia driven by the current dwelling stock thus a dwelling stock model was established to study the impacts of physical processes e g aging as well as the effect of social processes e g household energy conservation behaviors on energy demand for space heating in the icelandic dwelling stock the model is initialized in the year 2000 and then calibrated with datasets on the icelandic dwelling stock and hot water consumption for residential space heating analysis of the base scenario confirms that the improvement in the average energy intensity of total dwelling stock with regular turnover of the dwelling stock is insignificant and gradual which relates to the inertia of the existing stock the comparison of the results from two policy scenarios with the base case illustrates that the aggressive demolition is more effective compared to the aggressive construction in reducing the total energy demand for space heating the results of this analysis can support policy makers by providing insights regarding the potential impact of building energy efficiency policies ensuring an effective policy package

forecasting the depression harvard versus yale was the depression forecastable after the crash how long should it have taken contempo rary forecasters to realize how severe the downturn was going to be these questions are addressed by studying the predictions of the harv ard economic service and yale s irving fisher during 1929 and the ear ly 1930s the data assembled by the harvard and yale forecasters tog ether with modern historical data are subjected to statistical analy sis to learn whether their verbal pronouncements were consistent with the data both the harvard and yale forecasters were systematically too optimistic yet nothing in the data suggests that the optimism w as unwarranted copyright 1988 by american economic association

securing access to lower cost talent globally the dynamics of active embedding and field structuration manning s sydow j and windeler a securing access to lower cost talent globally the dynamics of active embedding and field structuration regional studies this article examines how multinational corporations shape institutional conditions in emerging economies to secure access to high skilled yet lower cost science and engineering talent two in depth case studies of engineering offshoring projects of german automotive suppliers in romania and china illustrate how multinational corporations engage in active embedding by aligning local institutional conditions with global offshoring strategies and operational needs multinational corporations thereby contribute to the structuration of field relations and practices of sourcing knowledge intensive work from globally dispersed locations the findings stress the importance of institutional processes across geographic boundaries that regulate and are shaped by multinational corporation activities manning s sydow j and windeler a

interwar inflation unexpected inflation and output growth interwar macroeconomic history is a natural place to look for evidence on the correlation between output growth and inflation or unexpected inflation we apply time series methods to measure unexpected inflation for more than 20 countries using both retail and wholesale prices there is a significant positive correlation between output growth and inflation for the entire period there is little evidence that this correlation is caused by an underlying role for unexpected inflation for wholesale price inflation in particular the output declines associated with deflations were larger than the output increases associated with inflations of the same scale

procedures and criteria to develop and evaluate household sustainable consumption indicators abstract communication about very complex problems like household sustainable consumption in simple terms is still a major challenge despite the diversity of tools to measure household consumption clearer indicators are needed to more effectively communicate with the general public the main objective of this research was to develop an approach to define the main procedures and criteria to built household sustainable consumption assessment tools based on indicator sets a review of available household sustainable consumption assessment metrics and related initiatives was conducted this included a comparative analysis of the different approaches the review revealed that the majority of these initiatives are focused upon specific domains e g energy or waste but none used an integrated approach in the sustainable consumption domains furthermore it was found that few methods used indicators to measure and assess household sustainable consumption principal components and a checklist of key good practice factors that a household sustainable consumption indicator system should include were developed due to the need to communicate effectively to engage stakeholders and to address the complexity involved in the measurement and assessment of household sustainable consumption the proposed integrated approach was designed to evaluate household sustainable consumption

china s carbon emissions from urban and rural households during 1992 2007 in china rapid economic growth has stimulated fast urban expansion and rural household income and consumption expenditure in current paper an input output method is used to determine the impact of china s increased urban and rural household consumption on carbon emissions the results shows that the direct and indirect co 2 emission from household consumption accounted for more than 40 of total carbon emissions from primary energy utilization in china in 1992 2007 the population increase expansion of urbanization and the increase of household consumption per capita all contribute to an increase of indirect carbon emissions while carbon intensity decline mitigates the growth of carbon emissions therefore at the domestic level household consumption is of great significance for co 2 emission which could be mitigated through changing the composition of goods and services consumed by households and switching to consumption pattern of less carbon intensive products the government must consider the substantial contribution of household consumption to carbon emissions when china is encouraging consumption in order to address the current global financial crisis c 2011 elsevier ltd all rights reserved

learning from global buyers an increasing number of developing countries engage in contract manufacturing for a decreasing number of global buyers this constellation characterises many labour intensive export sectors the positioning of developing country enterprises in such buyer driven chains is central to research concerned with identifying the winners and losers from globalisation this study contributes to this debate by seeking answers to two questions first what can researchers learn from global buyers about the relative strengths and weaknesses of developing country producers second what can these producers learn from global buyers and what circumstances facilitate or constrain such learning

risk assessment and profit sharing in business networks abstract nowadays network is the preferred governance form to conduct economic transactions network solution allows to reach flexibility maintaining cost and quality level since network concept refers to a great variety of organizational hybrids it is possible to choose the one that fits better market requirements the new trends in inter organization relationships push towards network solutions companies are interested in relationships with partners and customers to overcome resource dependence to enter too risky market or simply differentiate their business portfolio the proposed research focuses on the network concept aiming at highlighting threats and opportunities to investigate the double nature of the risk concept network structures offer flexibility and higher profit as a consequence and business risk sharing opportunity these two aspects profit and risk are strictly related and have to be considered together to depict a complete scenario this implies that risk assessment and management in network environment cannot neglect profit sharing or in other words that profit sharing mechanisms should use risk as driver in this context our research proposes a methodology to measure risk taking into account network peculiarities risk estimation is a basic step to evaluate the opportunity cost of capital needed to compute the network net present value npv that is assumed as base in the profit sharing process the profit sharing process has been tackled using the shapley value approach that is inspired to the fairness principle while the opportunity cost of capital is assessed using the capital asset pricing model capm

prices during the great depression was the deflation of 1930 1932 really unanticipated this paper examines inflationary expectations in order to investigate whether the deflation of 1930 32 could have been anticipated the major conclusion is that beginning in late 1930 and possibly as early as late 1929 deflation could have been anticipated at horizons of three six months this implies in turn that short run ex ante real interest rates were very high during the initial phases of the great depression these results provide further support for the proposition that monetary contraction was the driving force behind the economic decline copyright 1992 by american economic association

financial panics the seasonality of the nominal interest rate and the founding of the fed after the founding of the fed in 1914 the frequency of financial panics and the size of the seasonal movements in nominal interest ratesboth declined substantially this paper establishes that the fed by carrying out the seasonal open market policy that eliminated the seasonal in nominal interest rates caused the decrease in the frequency of panics since seasonal movements are anticipated and financial panics are probably real events the results show that an anticipated monetary policy had real effects on the economy copyright 1986 by american economic association

globalization and the death of the local firm the automobile components sector in south africa barnes j and kaplinsky r 2000 globalization and the death of the local firm the automobile components sector in south africa reg studies 34 797 812 as in the case of many developing countries south african industry is facing a new competitive environment as trade barriers fall this involves both the need to enter external markets and to cope with new entrants in the domestic market in the case of the south african automobile assembly industry responding to this new global environment has increasingly meant that domestic subsidiaries are being integrated into the global strategic operations of their parent companies this is increasingly leading them to the foreign sourcing of components in part because of perverse and unintended consequences of the motor industry development plan where local production of components is involved there is decreasing space for locally owned component suppliers and almost no space for component suppliers using local technology south african component supplie

quantifying value chain analysis in the context of livestock systems in developing countries the analysis of value chains has augmented our knowledge on the complexities inter linkages distributional benefits and institutional arrangements of production and marketing channels in developing countries however the analysis remains relatively qualitative and case specific with limited ability to rank or assess the impact of alternative interventions or to analyze sufficiently the complex market dynamics and feedbacks present in livestock systems this paper offers theoretical and applied insights on ways to improve the analytical rigor of the value chain methodology that combines both qualitative and quantitative approaches

production and costs in the south african motor vehicle industry this study investigates the existence of economies of scale in the south african motor vehicle industry as well as the substitution possibilities between input pairs and the direct and cross price elasticities of demand for the various inputs because of data limitations a translog cost function was estimated for only a three input model corresponding to a homogeneous production function involving capital labour and intermediate goods the issue of the existence of economies of scale in the south african motor vehicle industry is a particularly important one because south africa once again is a member of gatt and a full participant in the international trade arena the null hypothesis of constant returns to scale was rejected at the 0 5 level of significance thus the results of this model are certainly consistent with economies of scale in the south african motor vehicle industry the estimated direct price elasticities were consistent with the hypothesis that during the past two decades capital wa

spurred to upgrade a review of triggers and consequences of industrial upgrading in the global value chain literature summary the global value chains gvc literature intervenes in today s challenging development context by focusing on the means by which developing country industries can upgrade their market positions and outcomes for workers yet while this literature has produced hundreds of rich empirical case studies there has to date been no attempt to systematically analyze this case literature for lessons regarding the antecedents and consequences of the key outcome of upgrading this paper undertakes a systematic analysis of a representative sample of 45 case studies of primary product and light manufacturing industries in developing countries these studies were coded for factors involved in initiating and sustaining upgrading processes the results of upgrading and the role of local institutions in these processes we find that contrary to the major assumptions of the literature advanced country buyers are not the main force in the initiation of industrial upgrading rather in most cases developing country firms initiate upgrades when pushed by shocks of market vulnerability usually produced by state policies that force them to seek to change their status quo operations once initiated upgrading processes can produce a wide spectrum of results from little to no advancement in market position treadmilling to vaulting to the forefront of a global industry leaps forward on the basis of the sources of learning present in the local institutional environment such as state agencies and business associations we also identify conditions under which state participation in upgrading processes can lead to increased local institutional capacity together these findings suggest a framework for upgrading that we refer to as an induced search model this model has important implications for future research on the dynamics of industrial upgrading in developing countries techniques of state intervention and processes of mutually supportive learning between actors in the public and private sector

monetary factors in the great depression this paper examines the role of monetary policy in the early stages of the great depression and considers the mechanism whereby this policy may have affected real activity i conclude that the depression was preceded by a dramatic shift towards a highly contractionary monetary policy the economic impact of this policy seems unlikely to have come through the conventional keynesian channels of a shortage of liquidity and high ex ante real interest rates but instead may have operated through unanticipated deflation and after 1930 through the disruption of financial intermediation as a consequence of the banking panics

an examination of the asymmetric effects of money supply shocks in the pre world war i and interwar periods we test whether monetary shocks had asymmetric output effects before world war ii ball and mankiw 1994 show that expectations of persistent inflation under fiat money can explain why negative monetary shocks had larger effects than positive shocks after world war ii consistent with this explanation we find such asymmetry in the interwar period following the abandonment of the gold standard and before it when agents arguably anticipated this development we find no monetary asymmetry before world war i which is consistent with ball and mankiw 1994 because under a credible gold standard agents do not expect persistent inflation jel e31 es2

estimating an hedonic translog cost function for the home health care industry medicare home health care plays an important role in providing cost effective care for the chronically ill and elderly long seen as a cost effective substitute for nursing home care home care has become even more important with expenditures increasing by 31 4 from 1990 to 1996 the purpose of this paper is to provide a short run cost analysis of a sample of home health care providers to gain insight into the efficient provision of home health care services this paper is a significant improvement over previous studies in that it uses a nationwide database to more accurately represent the multiproduct nature of the industry and uses an hedonic translog cost estimation with desirable economic properties

complementarities between jit purchasing practices an economic analysis based on transaction costs the objective of this paper is to analyse the complementarities and interrelationships between the different jit purchasing practices which have extended in industrial markets in recent years the incorporation of trust as an explicative element in a framework based on transaction costs economics leads us to propose that the success of logistics related jit purchasing practices which fundamentally transform the physical exchange process depends on the implementation of additional practices which transform the way of governing and controlling the relationships and which support and rely on a co operation climate empirical tests carried out over a sample of 148 spanish auto components suppliers confirm this reasoning

the case of the negative nominal interest rates new estimates of the term structure of interest rates during the great depression throughout the 1930s and early 1940s u s treasury bonds and notes appeared to have negative nominal yields as they approached maturity but negative nominal interest rates are impossible in a world in which one can always hold cash the resolution to this puzzle is that treasury securities in addition to making coupon payments gave the owner the right to buy a new security on a future date this paper describes the institutional environment that led to the apparent negative nominal interest rates develops a method for valuing the exchange privilege and computes accurate measures of the yield to the coupon bearing component of these composite bond options these corrected bond and not yields are then used to calculate new estimates of the term structure of interest rates from 1929 to 1949

uncertainty irreversibility durable consumption and the great depression what was the role of uncertainty in the great depression this paper uses a calibrated general equilibrium model to show that in response to an increase in uncertainty agents increase expenditure on irreversible durable goods and reduce investment in irreversible physical capital these relative movements occur because durable goods provide a store of utility and are less irreversible than physical capital these substitutions are unclear at the start of the great depression but are clearly visible at the deep end of it in 1932 when the volatility of stock returns is consistently high coefficients on the variance which is consistent with the uncertainty hypothesis both the theoretical hypothesis and its empirical tests are of a partial equilibrium nature yet the great depression was a general equilibrium event this paper puts the uncertainty argument explicitly in a general equilibrium model with consumer durables and capital goods both subject to irreversibility constraints i associate income uncertainty with the stochastic process driving output fluctuations and an increase in uncertainty is modelled as a mean preserving spread on the distribution of this shock the general equilibrium setup also incorporates a specific notion of irreversibility namely that goods are irreversible if there are no buyers when one wants to sell the test of the uncertainty hypothesis in general equilibrium is a simulation of a calibrated version of the model what makes the reaction to a mean preserving spread nontrivial is the clash of the theoretical predictions of precautionary savings and irreversible investment in a general equilibrium context savings should increase and investment should fall to complicate matters durable goods have components of both consumption and investment so what was the role of uncertainty in the great depression in this setup a calibrated model provides a simple answer higher uncertainty makes agents cut capital investment and increase expenditure on durables there are two reasons for this the first is that durables are the least irreversible of the two assets in the model and the second is that durable goods act as a store of utility and thus as insurance the view of the uncertainty hypothesis that a cut in expenditure on durable goods is a key response to high uncertainty is not supported by a standard general equilibrium model there may however be some truth in itfbut for the wrong reasons and at the wrong time it is not a fall in durable expenditure per se but rather an increase relative to

supply chain management a strategic issue in engineer to order manufacturing abstract the characteristics of engineer to order eto companies are described in terms of their markets products and the internal processes of their organisation these are set in the context of current trends in supply chain management the business processes associated with the procurement and marketing functions and the interactions with other processes are analysed these are compared for a number of different types of eto company the variety of work in eto projects the customised complex products and the underlying uncertainties of markets all indicate that procurement and marketing need to be integrated with other processes particularly tendering and design these characteristics put constraints on the application of established supply chain management methods it is argued that a strategic view of supply chain management in which procurement makes a greater contribution in the tendering and early product development activities has the potential to improve performance