inflation persistence alternative interpretations and policy implications in this paper i consider the policy implications of two alternative structural interpretations of observed inflation persistence which correspond to two alternative specifications of the new keynesian phillips curve nkpc the first specification allows for some degree of intrinsic persistence by way of a lagged inflation term in the nkpc the second is a purely forward looking model in which expectations farther into the future matter and coefficients are time varying in this specification most of the observed inflation persistence is attributed to fluctuations in the underlying inflation trend which are a consequence of monetary policy rather than a structural feature of the economy with a simple quantitative exercise i illustrate the consequences of implementing monetary policy assuming a degree of intrinsic persistence that differs from the true one the results suggest that the costs of implementing a stabilization policy when the policymaker overestimates the degree of intrinsic persistence are potentially higher than the costs of ignoring actual structural persistence the result is more clear cut when the policymaker minimizes a welfare based loss function

the control of technology alliances an empirical analysis of the biotechnology industry we examine the determinants of control rights in biotechnology alliances through three case studies and a quantitative analysis aghion and tirole 1994 argue that control rights will be assigned so as to maximize the value of the final output as long as the r d firm has sufficient financial resources consistent with this framework the allocation of control rights to the r d firm increases with the firm s financial resources the empirical evidence regarding the relationship between control rights and the stage of the project at the time the alliance is signed is more ambiguous

heterogeneous response of disaggregate inflation to monetary policy regime change the role of price stickiness abstract this paper explores how a monetary regime change affects headline inflation via differential effects on various sectors in the economy using disaggregated cpi data for canada we find that the response to the adoption of inflation targeting it was quite heterogeneous across sectors while sticky price sectors experienced a notable change in inflation dynamics following it adoption little structural change was observed in flexible price sectors our analysis based on a common factor model suggests that the structural changes in the sticky price sectors are driven by a decline in their responses to common aggregate shocks including a monetary shock

structural breaks in the international dynamics of inflation abstract this paper proposes an iterative procedure to discriminate between structural breaks in the coefficients and the disturbance covariance matrix of a system of equations with recursive proc

information gathering through alliances abstract the effect of a firm s uncertainty regarding technological development on the formation of alliances is examined and it is shown that this uncertainty is positively related to the number of alliances however higher uncertainty also makes the firm less likely to ally with others if the collected information is redundant the higher the similarity between the technological regimes of potential alliance partners the lower the incentive to ally also direct ties are preferred to indirect ones if uncertainty is high since direct ties yield more accurate information than indirect ties

inflation dynamics and the output inflation trade off international panel data evidence we explore the impact of inflation and its variability on the output inflation trade off using a unified single step approach in a panel data context a limitation of earlier empirical approaches is that they focus on either cross country or country by country time series analyses this paper employs a dynamic heterogeneous panel data specification and uses an all encompassing estimation framework that accounts for parameter heterogeneity cross sectional dependence dynamics and non stationarity our sample covers 60 countries from 1970 to 2010 while inflation variability reduces the trade off for specific periods and country groups an unambiguous and more pronounced negative relation emerges between the inflation rate and the responsiveness of real output to nominal shocks the findings are in line with the new keynesian view of a negative association between the rate of inflation and the output inflation trade off as well as with the observed flattening of the phillips curve over the past decades

complementarity and external linkages the strategies of the large firms in biotechnology in biotechnology large firms enter into different kinds of linkages with universities and small medium sized research intensive firms we test the hypothesis that the strategies of external linkage of the large firms with other parties are complementary to one another we show that if any two strategies are complementary i e undertaking more of one strategy raises the marginal value of the other then they are positively correlated using data for a sample large us european and japanese chemical and pharmaceutical producers we find that the strategies above are positively correlated even after controlling for firm specific characteristics

heterogeneous dynamics aggregation and the persistence of economic shocks estimates of shock persistence based on disaggregate or on aggregate data are frequently very different this article takes a step toward reconciling this apparent disconnect between micro and macro based estimates of shock response it is shown that although the average of the individual impulse response functions irfs is identical to the aggregate irf averages of other popular persistence measures such as the sum of the autoregressive coefficients among others tend to be larger the higher the aggregation level the theoretical results are illustrated with two applications that use u s and european inflation data

schumpeterian innovation and entrepreneurs in capitalism a case study of the u s biotechnology industry abstract this paper uses the theoretical framework developed by joseph schumpeter to examine the first ten years of the u s biotechnology industry the role of the entrepreneur scientist inventor manager and capitalist are distinguished there is a discussion of the obstacles the small firms have had to overcome to create a new economic space in the marketplace it is argued that the earlier schumpeter of the theory of economic development and business cycles emphasizing the role of small firms more accurately describes the u s biotechnology industry in 1985 than schumpeter s later work capitalism socialism and democracy which postulated that the large established firms have preempted the role of small firms in innovation a discussion of the role of large established firms and the small entrepreneurial firms presents the tensions inherent in the cooperative arrangements between these two types of business enterprises the role of small biotechnology firms in reducing these innovations to practice and in their ability to continue to grow demonstrates that the independent entrepreneur recognized by the early schumpeter has been very active in the biotechnology industry

immigrant participation in the welfare system this paper presents a systematic analysis of immigrant participation in the us welfare system using the 1970 and 1980 us censuses in contrast to the previous studies the researchers focused on changes in welfare use across immigrant cohorts over time for a single immigrant cohort as it assimilates to the us furthermore it develops a theoretical model of the migration decision that explicitly incorporates the income insurance aspect of the us welfare system the analysis revealed that recent immigrant cohorts use the welfare system more intensively than earlier immigrant waves also the immigrant welfare participation was greater the longer an immigrant household had resided in the us and those characteristics of the immigrants country of origin were important determinants of welfare participation in addition the theoretical model of the migration decision which explicitly incorporated the presence of a welfare system in the destination country and this model could account for some of the ways in which source country characteristics were found to affect immigrant welfare participation

elusive persistence wage and price rigidities the new keynesian phillips curve and inflation dynamics abstract we review the main new keynesian inflation equations that have arisen as a result of aggregation from individual firms price rigidities we find that on the whole they cannot account for inflation persistence a key feature of the empirical dynamics of inflation and with important policy implications the only exceptions seem to be when indexation is allowed in price setting or when price stickiness is combined with wage rigidity and staggering

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

sectoral and aggregate inflation dynamics in the euro area this paper synthesises the implications of recent statistical evidence regarding inflation persistence in the euro area for aggregate data the degree of inflation persistence appears to be very high for sample periods spanning multiple decades but falls dramatically once we allow for time variation in the mean level of inflation furthermore the timing of these breaks in mean generally coincides with observed shifts in the monetary policy regime finally sectoral inflation series exhibit much less persistence than aggregate inflation mainly because of the influence of transitory sector specific shocks jel e31 c22 c43

the myth of the biotech revolution an assessment of technological clinical and organisational change abstract this paper argues that despite being widely promoted by academics and consultants the empirical evidence does not support the existence of a biotech revolution nor does the data support the widely held expectations that biotechnology is having a revolutionary impact on healthcare or economic development the revolutionary model is therefore a misleading basis for policy making as it over estimates the speed and extent of any changes in productivity or the quality of therapeutics instead the evidence suggests biotechnology is following a well established incremental pattern of technological change and creative accumulation that builds upon rather than disrupts previous drug development heuristics

immigrant assimilation and welfare participation do immigrants assimilate into or out of welfare this paper analyzes differences in welfare utilization between immigrants and natives in sweden using a large panel data set for the years 1990 to 1996 we find that immigrants use welfare to a greater extent than natives and that differences cannot be explained by observable characteristics welfare participation decreases with time spent in sweden refugees assimilate out of welfare at a faster rate than nonrefugee immigrants but neither group is predicted to reach parity with natives increases in unemployment and immigration as well as the change in the composition of immigrants contributed to the increase in welfare utilization in sweden

the dynamics of immigrant participation in entitlement programs evidence from canada 1993 2007 using uniquely rich canadian administrative data from the 1993 2007 period i find no evidence of rising employment insurance ei participation across recent immigrant cohorts and no evidence of rising ei participation with number of years spent in canada beyond the short period following entrance into the canadian labour market i also find little evidence of the rising immigrant participation in social assistance sa either across recent arrival cohorts or with years in canada the results do not appear to be seriously affected by emigration and attrition within each immigrant cohort while the immigrant participation in traditional welfare programs such as social assistance has generally declined from 1993 to 2007 i show that canada child tax benefit and other federal and provincial programs aimed at providing financial assistance to families with children have become a major source of transfer income to immigrant families a l aide de donnees administratives canadiennes particulierement riches pour la periode 1993 2007 on decouvre qu il n y a pas d evidence de participation plus elevee au programme d assurance emploi ae d une cohorte d immigrants recents a l autre dans le temps non plus que d evidence de participation accrue a l ae des immigrants recents avec le nombre d annees passees au canada si ce n est pour la courte periode qui suit l entree dans le marche du travail canadien on ne trouve que peu de support pour l hypothese de participation accrue a l assistance sociale as tant d une cohorte a la suivante qu avec le nombre d annees passees au canada ces resultats ne semblent pas affectes par l emigration ou l attrition a l interieur de chaque cohorte alors que la participation des immigrants aux programmes de bien etre traditionnels comme l assistance sociale ont generalement decline entre 1993 et 2007 on montre que la prestation fiscale canadienne pour enfants et autres programmes federaux et provinciaux visant a fournir de l assistance financiere aux familles avec enfants sont devenus une source majeure de revenus de transfert pour les familles d immigrants

intrinsic inflation persistence empirical evidence suggests that inflation determination is not purely forward looking but models of price setting have struggled to rationalize this finding without directly assuming backward looking pricing rules for firms this paper shows that intrinsic inflation persistence can be explained with no deviation from optimizing forward looking behaviour if prices that have remained fixed for longer are more likely to be changed than those set recently a relationship between the probability of price adjustment and the duration of a price spell is shown to imply a simple hybrid phillips curve including lagged and expected inflation which is estimated using macroeconomic data

decentralized income redistribution and immigration abstract we analyze the welfare and other effects of immigration on a system of jurisdictions with a common labor market mobile capital and redistributive tax transfer policies comparative statics analysis of a model of nash non cooperative equilibria in tax transfer policies shows that the welfare effect of immigration depends on whether immigrants are net fiscal contributors or burdens any one jurisdiction s redistribution and immigration policies generate fiscal externalities for others in the system which a central government can internalize by appropriate taxes and subsidies

international evidence on the new keynesian phillips curve using aggregate and disaggregate data we present a unique empirical analysis of the properties of the new keynesian phillips curve nkpc using an international data set of aggregate and disaggregate sectoral inflation our results from panel time series estimation clearly indicate that sectoral heterogeneity has important consequences for aggregate inflation behavior heterogeneity helps to explain the overestimation of inflation persistence and underestimation of the role of marginal costs in empirical investigations of the nkpc that use aggregate data we find that combining disaggregate information with heterogeneous consistent estimation techniques helps to reconcile to a large extent the nkpc with the data

complementarity status similarity and social capital as drivers of alliance formation using data on u s investment banking firms syndication in underwriting corporate stock offerings during the 1980s this study explores the factors that drive alliance formation between two specific firms we compare resource complementarity status similarity and social capital as a basis of alliance formation the findings indicate that the likelihood of investment banks alliance formation is positively related to the complementarity of their capabilities as well as their status similarity social capital arising from banks direct and indirect collaborative experiences also plays a very important role in alliance formation the number of deals given by a lead bank to a potential partner over the past three years has an inverted u shaped relationship to the probability that the lead bank will invite the potential partner to form an alliance our findings indicate that status similarity and social capital have a stronger effect on alliance formation in initial public offering deals than in secondary offering deals as the former are more uncertain than the latter using these findings we discuss the role of complementarity status similarity and social capital in alliance formation copyright 2000 john wiley sons ltd

new evidence on inflation persistence and price stickiness in the euro area implications for macro modeling this paper evaluates new evidence on price setting practices and inflation persistence in the euro area with respect to its implications for macro modeling it argues that several of the most commonly used assumptions in micro founded macro models are seriously challenged by the new findings jel e31 e52

network location and learning the influence of network resources and firm capabilities on alliance formation this paper presents a dynamic firm level study of the role of network resources in determining alliance formation such resources inhere not so much within the firm but reside in the interfirm networks in which firms are placed data from extensive fieldwork show that by influencing the extent to which firms have access to information about potential partners such resources are an important catalyst for new alliances especially because alliances entail considerable hazards this study also assesses the importance of firms capabilities with alliance formation and material resources as determinants of their alliance decisions i test this dynamic framework and its hypotheses about the role of time varying network resources and firm capabilities with comprehensive longitudinal multi industry data on the formation of strategic alliances by a panel of firms between 1970 and 1989 the results confirm field observations that accumulated network resources arising from firm participation in the network of accumulated prior alliances are influential in firms decisions to enter into new alliances this study highlights the importance of network resources that firms derive from their embeddedness in networks for explaining their strategic behavior copyright 1999 john wiley sons ltd

the contribution of university research to the technological innovation of the german economy societal auto dynamic and political guidance abstract in recent years a growing interest of firms in the transfer of technologically usable results from university research can be observed in the f r g in the first part of the paper a short account of available empirical evidence for this is given in the second part a general theoretical model is developed which tries to explain the intensification of transfer activities as the result of a specific auto dynamical causality connecting firms and universities in the third part the role of political guidance as a catalyzing force for this societal auto dynamic is discussed

buying big into biotech scale financing and the industrial dynamics of uk biotech 1980 2009 this article explores how the uk s biotech firms have evolved in response to their financial environment as investors expectations about the potential of biotech have changed funding options have opened up and closed down leading firms to develop new business models and routes of technology development after a favorable period new constraints on stock market funding have forced uk biotech firms to compress their life cycles constraining their ability to generate the late stage drug candidates sought by large pharmaceutical firms these changes are analyzed within a neo chandlerian framework in the context of a selection environment where rather than firms of varying inefficiencies being selected by an efficient market we find entrepreneurs submitting themselves to an inefficient investment selection process at the intersection of industries attempting to achieve their own scale economies the article highlights the importance of the scale of investment at the firm and industry level and suggests that decline in the size of the industry can have adverse consequences for investment and firm performance in this setting

national origin and immigrant welfare recipiency this paper explores national origin differences in the welfare recipiency of immigrants to the united states we develop an economic model of immigration which generates implications about how welfare utilization should vary according to characteristics of the country of origin the empirical analysis reveals that a few source country characteristics explain over two thirds of the variance of welfare recipiency rates across national origin groups and changes in the average source country characteristics of the foreign born population between 1970 and 1980 can account for most of the rise in immigrant welfare use that occurred over the decade

self selection and the earnings of immigrants this paper analyzes the way in which the earnings of the immigrant population may be expected to differ from the earnings of the native population because of the endogeneity of the decision to migrate the empirical study shows that differences in the u s earnings of immigrants with the same measured skills but from different home countries are attributable to variations in political and economic conditions in the countries of origin at the time of migration excerpt

venture capital high technology and regional development florida r l and kenney m 1988 venture capital high technology and regional development reg studies 22 33 48 this paper explores the role of venture capital in technological innovation and regional development both aggregate data and a unique firm level data base are employed to determine the location of major centres of venture capital flows of venture capital investments and patterns of investment syndication or coinvestment among venture capital firms three major centres of venture capital are identified california san francisco silicon valley new york and new england massachusetts connecticut as well as three minor venture capital centres illinois chicago texas and minnesota venture capital firms are found to cluster in areas with high concentrations of financial institutions and those with high concentrations of technology intensive enterprises venture capital firms which are based in financial centres are typically export oriented while those in technology centres tend t

venture capital and the birth of the local area networking industry abstract venture capital has played an important role in funding the development of a number of us high technology industries economists and business scholars utilizing models based in traditional economics have studied venture capital from the perspective of investment decision making these models provide significant insights and yet they do not explain the actual operation of venture capital this case study of the creation of lan industry utilizes a synthesis of the dominant design and social constructionist perspectives to create a more nuanced explanation of how the practice of venture capitalists operates to create firms and industries

when minority labor migrants meet the welfare state life cycle employment of minority labor migrants who entered norway in the early 1970s diverges from that of natives immigrant employment was nearly complete during early years but declined to 50 by the year 2000 compared to 87 for a native comparison group we find that immigrant employment is particularly sensitive to the business cycle and that economic downturns of the 1980s and 1990s accelerated their labor market exit we trace part of the decline to migrants being overrepresented in shrinking industries but we also identify welfare disincentives that contribute to poor life cycle employment performance of immigrants with many dependent family members

immigrants labour market performance and social insurance using longitudinal data from the date of arrival we study long term labour market and social insurance outcomes for all major immigrant cohorts to norway since 1970 immigrants from high income countries performed as natives while labour migrants from low income source countries had declining employment rates and increasing disability programme participation over the lifecycle refugees and family migrants assimilated during the initial period upon arrival but labour market convergence halted after a decade and was accompanied by rising social insurance rates for the children of labour migrants of the 1970s we uncover evidence of intergenerational assimilation in education earnings and fertility

has euro area inflation persistence changed over time this paper analyzes the stability over time of the econometric process for euro area inflation since 1970 focusing in particular on the behavior of the so called persistence parameter the sum of the coefficients on the lagged dependent variables perhaps surprisingly in light of the lucas critique our principal finding is that there appears to be relatively little instability in the parameters of the euro area inflation process full sample estimates of the persistence parameter are generally close to 1 and we fail to reject the hypothesis that this parameter has been stable over time we discuss how these results provide some indirect evidence against rational expectations models with strong forward looking elements such as the new keynesian phillips curve

price setting and inflation persistence did emu matter surprisingly it did not or at least not directly using micro data on consumer prices and sectoral inflation rates from 6 euro area countries spanning several years before and after the introduction of the euro we look at whether emu has altered the behaviour of retail price setting and or inflation dynamics we find no evidence that anything has changed around 1999 if anything persistence may have slightly increased at the end of 2001 and in the beginning of 2002 period surrounding the euro cash changeover retail price adjustment frequencies both up and down increased substantially while the magnitude of the price adjustment also both up and down was smaller than otherwise however both settled quickly back to the earlier patterns on the contrary we do find evidence of a decline in the persistence of the inflation process in the mid 1990s this could be due to a structural change in private inflationary expectations due at least in part to policies linked to the preparation of emu however this interpretation is weakened by the fact that a similar decline occurred also in the us

changes in the order of integration of us and uk inflation employing the modified tests of harvey leybourne and taylor harvey d i leybourne s j and taylor a m r 2006 modified tests for a change in persistence journal of econometrics 134 441 469 for a single change in persistence and repartitioning the sample when a break is found this paper shows that us and uk inflation changes from i 0 to i 1 in the early 1970s with a subsequent reversion to i 0 behaviour compatible with modern macroeconomic theories in the early 1980s

dual market structures and the likelihood of repeated ties evidence from pharmaceutical biotechnology this paper analyses the role of repeated ties in the high tech pharmaceutical biotechnology industry a sector that is characterized by a strong dual market structure our most important finding is that previous ties in pairs of large pharmaceutical companies and small biotechnology firms have a negative effect on their subsequent partnering an explanation for this result is found in the context of understanding the specifics of large small coalitions in a high tech dual market structure unlike what is known about repeated ties in many other industries this high tech dual market structure indicates that r d partnerships between a small number of very large companies and a large group of dependent small firms are not characterized by mutual dependence similarity or equality

the use of transfer payments by immigrants this paper uses data from the 1976 survey of income and education to compare the receipt of transfers by families headed by male and female immigrants and those headed by native born americans the average level of transfers is found to be considerably higher among families headed by immigrants but this is almost entirely the result of the higher average age of family members among the immigrant group a reflection of the large inflows of immigrants into the u s during the pre 1924 period when age and other factors are held constant immigrant families are found to be considerably less likely to rely on welfare than native families and their receipts from social insurance programs are found to be only slightly higher

what is the globalisation of inflation abstract this paper studies the globalisation of cpi inflation by analysing core energy and food components testing for structural breaks in the relationships between domestic inflation and a corresponding country specific foreign inflation series at the monthly frequency for oecd countries the iterative methodology employed separates coefficient and variance breaks while also taking account of outliers we find that the overall pattern of globalisation in aggregate inflation is largely driven by convergence of the mean levels of the core component from the early 1990s compatible with the introduction of inflation targeting in many countries of our sample there is less evidence of increased synchronisation of shortrun movements in core than aggregate inflation but an increased role for shortrun foreign energy inflation often contributes to the globalisation effect

a theory of the early growth of the firm economic enterprise consists in the matching of resources and opportunities to create value growth processes of the new enterprise are here explored in a systems model inspired by penrose a sequence of phases in the early life of the firm reflects growth processes and problems solutions giving rise to new problems firms must access mobilize and deploy resources before they can generate resources for growth subsequent phases in which growth reinforcement and growth reversal forces content are not universal but are set in motion in an important minority of firms the major job creators beyond the early phases critical problems facing the firm are more diverse the growth of the firm is related to the building of the competence needed to respond to changing industrial opportunities copyright 1998 by oxford university press

a political economic analysis of labor migration and income redistribution we present a two country political economic model of income redistribution with internationally mobile labor migration can be exogenous and or endogenous i e determined by labor income differentials political influence is determined by the size and homogeneity of the groups where the latter can be affected by immigration we show that immigration can increase the transfers to and the income of the mobile group we also investigate the possibility of migration regulation tax transfer policy competition and coordination and finally coordination of regulation policies it is shown that the selection of any of those regimes will depend on the particular distribution of political influence among the relevant social groups in the two countries