growth and inequality in the dual model of development the role of demand factors this paper relates growth and income distribution in the development of a dual economy its originality lies in the fact that the analysis of income inequality uses the whole lorenz curve instead of some summary measures and that the dual economy is represented through a fully specified general equilibrium model conditions for particular shifts in the lorenz curve are derived they mostly involve the income and price elasticities of demand faced by the traditional sector of the economy and suggest that an unambiguous drop in income inequality is somewhat unlikely at the dual stage of development

reducing the bullwhip effect looking through the appropriate lens demand amplification now frequently referred to as bullwhip is potentially a very costly phenomenon it can lead to stock outs large and expensive capacity utilisation swings lower quality products and considerable production transport on costs as deliveries are ramped up and down at the whim of the supply chain however the detection of bullwhip depends on which lens is used this in turn depends on the background and requirements of various players within the value stream to gain insight into this scenario we exploit a relatively simple replenishment model because new and novel analytic solutions have been derived for all important performance metrics comparison of the competing bullwhip measures is thereby greatly streamlined in the complex real world the likelihood is that supply chains will generate even greater inconsistency between alternative variance shock and filter lens viewpoints

human capital inequality and economic growth some new evidence this paper provides new measures of human capital inequality for a broad panel of countries taking attainment levels from barro and lee 2001 we compute gini coefficients and the distribution of education by quintiles for 108 countries over five year intervals from 1960 to 2000 using this new cross country data on human capital inequality two main conclusions are obtained first most countries in the world have tended to reduce the inequality in human capital distribution second human capital inequality measures provide more robust results than income inequality measures in the estimation of standard growth and investment equations

understanding long run african growth colonial institutions or colonial education abstract long term growth in developing countries has been explained in four frameworks extractive colonial institutions acemoglu et al 2001 colonial legal origin la porta et al 2004 geography gallup et al 1998 and colonial human capital glaeser et al 2004 in this paper we test the colonial human capital explanation for sub saharan africa controlling for legal origin and geography utilising data on colonial era education we find that instrumented human capital explains long term growth better and shows greater stability over time than instrumented measures for extractive institutions we suggest that the impact of the disease environment on african long term growth runs through a human capital channel rather than an extractive institutions channel the effect of education is robust to including variables capturing legal origin and geography which have additional explanatory power

output dynamics in real business cycles models the time series literature reports two stylized facts about output dynamics in the united states gnp growth is positively autocorrelated and gnp appears to have an important trend reverting component this paper investigates whether current real business cycle rbc models are consistent with these stylized facts many rbc models have weak internal propagation mechanisms and must rely on external sources of dynamics to replicate both facts models that incorporate labor adjustment costs are partially successful they endogenously generate positive autocorrelation in output growth but they need implausibly large transitory shocks to match the trend reverting component in output

structural change test in duration of bull and bear markets abstract we propose a recursive test to analyze structural changes in duration of bull and bear markets using the dow jones industrial average index we detected a single structural break in the bull market duration in april 1942

monetary policy effectiveness and stock market cycles in asean 5 this article examines the asymmetric effects of monetary policy on real output in bull and bear phases of stock market in five asean economies malaysia singapore indonesia the philippines and thailand using the recently developed pooled mean group pmg technique stock market cycles are identified by employing markov switching models and the rule based nonparametric approach estimating the models using monthly data from 1991 1 to 2011 12 the results show that monetary policy measured by short term interest rate has a negative and statistically significant long run effect on real output in bull and bear market periods while the effects are stronger in bear periods than bulls in the short run there is no statistically significant relationship between monetary policy and real output these results are consistent with finance constraints capital market imperfection models that predict that monetary policy is more effective during bear periods than bulls

public versus private investment in human capital endogenous growth and income inequality in this paper we present an overlapping generations model with heterogeneous agents in which human capital investment through formal schooling is the engine of growth we use simple functional forms for preferences technologies and income distribution to highlight the distinction between economies with public education and those with private education we find that income inequality declines more quickly under public education on the other hand private education yields greater per capita incomes unless the initial income inequality is sufficiently high we also find that societies will choose public education if a majority of agents have incomes below average

trend definition or holding strategy what determines the profitability of candlestick charting abstract we ask what determines the profitability of candlestick trading strategies is it the definition of trend and or the holding strategy that one uses in candlestick charting analysis to answer this we systematically consider three definitions of trend and four holding strategies applying candlestick trading strategies to the djia component data we find that regardless of which definition of trend is used eight three day reversal patterns with a caginalp laurent holding strategy are profitable when we set the transaction cost at 0 5 and after we account for data snooping bias while the patterns with a marshall young rose holding strategy are not profitable for sensitivity analysis we also find that our results are not qualitatively changed on a lower transaction cost of 0 1 or when we conduct the subsample analyses based on three equal periods and three distinct market conditions when considering a more volatile market evidence in favor of candlestick trading strategies is strengthened

on the impact of order volatility in the european automotive sector order volatility is an unfortunate fact of life facing most suppliers of both products and services in this paper we are concerned with establishing the magnitude of the problem faced by the european automotive sector the evidence has been acquired via the site based quick scan audit methodology qsam production scheduler strategy is thereby classified according to a new five set schema as observed via individual value stream volatilities system variables have then been codified and correlated with customer order volatility powerful statistically significant relationships emerge from this evidence this generally but not wholly supports intrinsic views on what constitutes good practice a specific interface between supplier and oem shows the existence of a positive loop that acts as a vicious circle to create unnecessary volatility in material flow

what happens during recessions crunches and busts we provide a comprehensive empirical characterization of the linkages between key macroeconomic and financial variables around business and financial cycles for 21 oecd countries over the period 1960 2007 in particular we analyse the implications of 122 recessions 113 28 credit contraction crunch episodes 114 28 episodes of house price declines busts 245 61 episodes of equity price declines busts and their various overlaps in these countries over the sample period our results indicate that the interactions between macroeconomic and financial variables can play a major role in determining the severity and duration of a recession specifically we find evidence that recessions associated with credit crunches and house price busts tend to be deeper and longer than other recessions stijn claessens m ayhan kose and marco e terrones

income distribution and macroeconomics this paper analyzes the role of wealth distribution in macroeconomics through investment in human capital it is shown that in the presence of credit markets imperfections and indivisibilities in investment in human capital the initial distribution of wealth affects aggregate output and investment both in the short and in the long run as there are multiple steady states this paper therefore provides an additional explanation for the persistent differences in per capita output across countries furthermore the paper shows that cross country differences in macroeconomic adjustment to aggregate shocks can be attributed among other factors to differences in wealth and income distribution across countries

the asymmetric effects of investor sentiment and monetary policy on stock prices we examine the impact of investor sentiment and monetary policy on the stock prices under different market states based on the markov switching vector autoregression ms var model the results show that the sentiment shocks more than monetary policy shocks lead to not only much larger fluctuations of stock prices but also much longer duration in the stock market downturn than in the stock market expansion which shows obvious asymmetric effect moreover the responses of stock prices to the sentiment shocks present an immediate effect while the responses of stock prices to the monetary policy shocks show one period lag effect

stock market reaction to fed funds rate surprises state dependence and the financial crisis this paper examines the response of us stock returns to federal funds rate ffr surprises between 1989 and 2012 focusing on the impact of the recent financial crisis we find that outside the crisis period stock prices increased as a response to unexpected ffr cuts state dependence is identified with stocks exhibiting larger increases when interest rate easing coincided with recessions bear markets and tightening credit conditions however an important structural shift occurred during the crisis changing the stocks response to ffr shocks and the nature of state dependence throughout the crisis period stocks did not react positively to unexpected ffr cuts which were interpreted as signals of worsening future economic conditions this triggered a rebalancing of investment portfolios away from falling equities and towards safe haven assets our results highlight the severity of the crisis and the ineffectiveness of conventional monetary policy close to the zero lower bound

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

energy contagion analysis a new perspective with application to a small petroleum economy abstract we put forward the novel concept of energy contagion i e a deepening of energy finance linkages under crisis conditions in energy markets further we show how to construct tests for energy contagion through correlation co skewness and co volatility channels the samples of our contagion measures are defined in terms of calm and crisis periods in the international crude oil market in particular we compare how these various co moments in the energy finance nexus change during 1 oil booms and slumps using semi parametric rule based algorithms 2 tranquil and turbulent oil price volatility episodes using a non hierarchical k means clustering algorithm energy contagion analysis is essential for financial stability analysis in economies where prosperity is linked to the prices of hard commodities our applications are performed on the oil exchange rate and oil stock market relationships of the small petroleum economy of trinidad and tobago the main results show a negative oil real effective exchange rate dependency a weak oil stock returns association and the existence of several energy contagion channels in both financial relationships which are sensitive to the contemporary global financial crash

education economic growth and measured income inequality in this paper education simultaneously affects growth and income inequality more education does not necessarily decrease inequality when the latter is assessed by the lorenz dominance criterion increases in education first increase and then decrease growth as well as income inequality when measured by the gini coefficient there is no clear functional relationship between growth and measured income inequality the model identifies regimes of this relationship which depend crucially on the production and schooling technology conventional growth regressions with human capital and inequality as regressors may miss the richness of the underlying nonlinearities but viewed as approximations may still provide important information on the nonlinear relationship between growth and education

are china s new energy stock prices driven by new energy policies abstract this paper studies the impact of china s new energy policies on expected changes and volatility in new energy stock prices considering different kinds of policies energy legislation binding targets for new energies economic incentives and technological research and development and several new energy indexes china s new energy sector and the solar wind nuclear and lithium battery subsectors we used a regression model with a garch specification and dummy variables to differentiate policy pre and post announcement effects on expected returns and volatility our evidence indicates that pre and post announcement energy legislation policies dampened price volatility in all subsector indexes and that economic incentives had a positive policy announcement effect on all subsector index prices other new energy policies had no significant impact on either the mean or the volatility of the new energy assets the potential implications for policy makers and investors are discussed

on measuring synchronization of bulls and bears the case of east asia abstract this paper implements estimation and testing procedures for comovements of stock market cycles or phases in asia we extend the harding and pagan harding d pagan a p 2006 synchronization of cycles journal of econometrics 132 1 59 79 test for strong multivariate nonsynchronization smns between business cycles to a test that allows for an imperfect degree of multivariate synchronization between stock market cycles moreover we propose a test for endogenously determining structural change in the bivariate and multivariate synchronization indices upon applying the technique to five asian stock markets we find a significant increase in the cross country comovements of asian bullish and bearish periods in 1997 a power study of the stability test suggests that the detected increase in comovement is more of a sudden nature i e contagion or asian flu instead of gradual i e financial integration it is furthermore argued that stock market cycles and their propensity toward increased synchronization contain useful information for both investors policy makers and financial regulators

information distortion in a supply chain the bullwhip effect this article originally appeared in management science april 1997 volume 43 number 4 pp 546 558 published by the institute of management sciences consider a series of companies in a supply chain each of whom orders from its immediate upstream member in this setting inbound orders from a downstream member serve as a valuable informational input to upstream production and inventory decisions this paper claims that the information transferred in the form of orders tends to be distorted and can misguide upstream members in their inventory and production decisions in particular the variance of orders may be larger than that of sales and distortion tends to increase as one moves upstream a phenomenon termed bullwhip effect this paper analyzes four sources of the bullwhip effect demand signal processing rationing game order batching and price variations actions that can be taken to mitigate the detrimental impact of this distortion are also discussed

income inequality education expenditures and growth abstract recent studies have reported a negative association between income inequality and economic growth if true what accounts for this finding what are possible transition mechanisms that might link the two this paper explores one such mechanism income inequality raises expenditures for public education as a fraction of gross domestic product gdp although public education expenditures are positively associated with future economic growth the contemporaneous effect upon growth is negative given this cost upon current growth these findings may help to explain the lack of a large positive effect from the growth of human capital upon economic growth as reported in the literature

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

dissecting the cycle a methodological investigation following burns and mitchell we define the cycle as a pattern in the level of aggregate economic activity an algorithm to locate turning points is developed as is a new measure of pro cyclicality a link between turning points and the moments of the series is established thereby providing the statistical foundation that burns and mitchell s work lacked using these tools we are able to dissect cycles in terms of the contributions made by trend growth volatility serial correlation and non linear effects we dissect several models and find little evidence that certain non linear effects are important to the nature of business cycles

policy theory and the cycle the paper sets out some simple statistical models and shows that they are capable of generating the ob served characteristics of classical cycles in three countries australia the united kingdom and the united states both analytical and simulation work is used for this purpose these models emphasize the fact that to generate a realistic business cycle requires some deterministic trend growth near unit root behaviour in the deterministically detrended data and innovations of a certain magnitude with this information we examine some popular models of the cycle asking how they produce these features and then explore the implications of the analysis for economic policy

candlestick technical trading strategies can they create value for investors abstract we conduct the first robust study of the oldest known form of technical analysis candlestick charting candlestick technical analysis is a short term timing technique that generates signals based on the relationship between open high low and close prices using an extension of the bootstrap methodology which allows for the generation of random open high low and close prices we find that candlestick trading strategies do not have value for dow jones industrial average djia stocks this is further evidence that this market is informationally efficient

transfer function analysis of forecasting induced bullwhip in supply chains the present paper analyses the bullwhip problem generated by exponential smoothing algorithms in both stand alone passing on orders mode and within inventory controlled feedback systems results are predicted from transfer function analysis and then confirmed by simulation via the bullwhip explorer supply chain software a novel feature of the paper is the introduction of the matched filter concept into the exponential smoothing algorithm this adjusts the value of the smoothing constant depending on whether the constant linear or quadratic forecasting model is used it is shown that matching the filter via noise bandwidth equalises the output variance when the demand is a random signal hence some of the unwanted effects of using the linear and quadratic forecasting models are attenuated however there is little benefit obtained by using sophisticated forecasting methods within inventory controlled feedback systems as their tracking ability is reduced

inventories and the three phases of the business cycle this article demonstrates that recessions typically are followed by high growth recovery phases that push output back to its prerecession level thus postwar fluctuations in real output in the united states have consisted of three sequential phases rather than two contractions high growth recoveries and moderate growth periods following recoveries data from before world war ii also exhibit this pattern for the postwar period the three phase pattern is shown to reflect swings in inventory investment and suggests that output fluctuations have an important transitory component the evidence in this article supports delong and summers s output gaps view and friedman s plucking model view of fluctuations

stock market cycles financial liberalization and volatility in this paper we analyze the cycles of the stock markets in four latin american and two asian countries and we compare their characteristics we divide our sample in two subperiods in order to account for differences induced by the financial liberalization processes of the early 1990s we find that cycles in emerging countries tend to have shorter duration and larger amplitude and volatility than in developed countries however after financial liberalization latin american stock markets have behaved more similarly to stock markets in developed countries whereas asian countries have become more dissimilar concordance of cycles across markets has increased significantly over time especially for latin american countries after liberalization

chinese stock market cyclical regimes 1991 2006 abstract chinese bull and bear market regimes are objectively identified and their statistical properties outlined chinese market cycles are extremely pronounced but have moderated as the market matures ex ante trading rule tests indicate the usefulness of regime identification for chinese investors

can a real business cycle model pass the watson test abstract watson 1993 measures of fit for calibrated models journal of political economy 101 6 1011 1041 proposes a procedure for evaluating the fit of a dynamic equilibrium business cycle model under watson s criterion the standard real business cycle rbc model fails dramatically in reconciling the dynamics of the model with the data this inability to account for the dynamics of us aggregate data remains a major challenge to rbc theory this paper demonstrates that reasonable modifications can bring rbc theory into closer conformity with the data the empirical results indicate that when habit formation on leisure choice and employment externality are incorporated into the analysis the striking spectral density differentials documented by watson virtually vanish at business cycle frequencies

equity and efficiency in human capital investment the local connection a general model of community formation and human capital accumulation with social spillovers and decentralized school funding is used to analyse the causes of economic segregation and its consequences for equity and efficiency significant polarization arises from minor differences in endowments preferences or access to capital markets this makes income inequality more persistent across generations but the same need not be true for wealth equilibrium stratification tends to be excessive resulting in low aggregate surplus whether state equalization of school resources can remedy these problems hinges on how purchased social and family inputs interact in education and in mobility decisions

the extension and exploitation of the inventory and order based production control system archetype from 1982 to 2015 in 1994 through classic control theory john naim and towill developed the automatic pipeline inventory and order based production control system apiobpcs which extended the original iobpcs archetype developed by towill in 1982 well recognised as a base framework for a production planning and control system due to the prevalence of the two original models in the last three decades in the academic and industrial communities this paper aims to systematically review how the iobpcs archetypes have been adopted exploited and adapted to study the dynamics of individual production planning and control systems and whole supply chains using various databases such as scopus web of science google scholar 111 papers we found that the iobpcs archetypes have been studied regarding the a modification of four inherent policies related to forecasting inventory lead time and pipeline to create a family of models b adoption of the iobpcs family to reduce supply chain dynamics and in particular bullwhip c extension of the iobpcs family to represent different supply chain scenarios such as order book based production control and closed loop processes simulation is the most popular method adopted by researchers and the number of works based on discrete time based methods is greater than those utilising continuous time approaches most studies are conceptual with limited practical applications described future research needs to focus on cost flexibility and sustainability in the context of supply chain dynamics and although there are a few existing studies more analytical approaches are required to gain robust insights into the influence of nonlinear elements on supply chain behaviour also empirical exploitation of the existing models is recommended

demand fluctuation and chaotic behaviour by interaction between customers and suppliers this paper presents an investigation on simulation of interaction between customers and suppliers in a three tier supply chain system in the simulation customers respond to the price discount offer made by the supplier and the supplier makes adjusts the price according to stock held the simulation shows that the behaviour of such interaction exhibits deterministic chaos it is found that the attractors of the model move with the environment and the initial states thus the bifurcating points in such a system are unable to provide a guideline in system design to avoid chaos

an econometric analysis of some models for constructed binary time series macroeconometric and financial researchers often use binary data constructed in a way that creates serial dependence we show that this dependence can be allowed for if the binary states are treated as markov processes in addition the methods of construction ensure that certain sequences are never observed in the constructed data together these features make it difficult to utilize static and dynamic probit models we develop modeling methods that respect the markov process nature of constructed binary data and explicitly deals with censoring constraints an application is provided that investigates the relation between the business cycle and the yield spread

a simple framework for analysing bull and bear markets bull and bear markets are a common way of describing cycles in equity prices to fully describe such cycles one would need to know the data generating process dgp for equity prices we begin with a definition of bull and bear markets and use an algorithm based on it to sort a given time series of equity prices into periods that can be designated as bull and bear markets the rule to do this is then studied analytically and it is shown that bull and bear market characteristics depend upon the dgp for capital gains by simulation methods we examine a number of dgps that are known to fit the data quite well random walks garch models and models with duration dependence we find that a pure random walk provides as good an explanation of bull and bear markets as the more complex statistical models in the final section of the paper we look at some asset pricing models that appear in the literature from the viewpoint of their success in producing bull and bear markets which resemble those in the data copyright 2002 john wiley sons ltd

financing higher education and majority voting abstract this paper examines the state funding of higher education treated as an investment good generating an externality under majority voting the model considers a single cohort over two periods individuals maximise net lifetime income subject to the government s budget constraint with a proportional tax cyclical voting does not occur despite double peaked preferences comparative static results are obtained a fall in non education expenditure leads to a fall in the choice of grant and a positive externality is a necessary though not sufficient condition for ensuring majority support for some positive level of the grant

intraday patterns and trading strategies in the spanish stock market different rating and investment companies have recently pointed out spain s brightening growth outlook which has energized the spanish stock market by anticipating greater interest in the behaviour of the spanish stock market we show that the best trading strategy is that in which the investor enters long or short after the opening of the new york stock exchange nyse till the end of the trading day at 17 30 this strategy should be complemented with that of entering long or short from the opening of the trading day till the closing price before the opening of the nyse in no coincidence phases

income inequality human capital accumulation and economic performance we show that greater income equality implies higher human capital accumulation and economic performance in an overlapping generations model with heterogeneity in income and talent given liquidity constraints and declining marginal utility individuals with a given level of talent receive education if their initial income is higher than a threshold level and the threshold is lower for more talented individuals assuming the more talented create more human capital when educated greater initial income equality for one generation then imply not only higher aggregate human capital accumulated by that generation but an improvement in all subsequent generations initial income distributions

do real business cycle models really exhibit business cycle behavior abstract previous research indicates that real business cycle models are capable of reproducing important features of u s business cycle behavior here i employ classical methods of business cycle analysis to determine how well the cyclical properties of simulated data from a representative real business cycle model match up with postwar u s business cycle characteristics while the simulated model reproduces qualitative features consistent with observed business cycle experience quantitative goodness of fit tests show that for many sectors of the economy the cyclical characteristics of the simulated data deviate significantly from u s business cycle experience

evidence of the duration dependence from the stock markets in the pacific rim economies this article investigates the duration dependent feature of five pacific rim economies the duration dependent markov switching model is employed to achieve this objective the savage dickey density ratio is also computed in support of the duration dependent markov switching model the possible bull and bear market dates for each stock market are also identified by the posterior probability from the empirical model it is unambiguous that japan south korea and hong kong are all characterized by duration dependence in a bear market but no duration dependence in a bull market in the case of taiwan and singapore the duration dependence feature holds for both the bear and bull markets

measuring inequality change in an economy with income growth abstract this paper analyzes how to measure changes in inequality in an economy with income growth the discussion distinguishes three stylized kinds of economic growth 1 1 high income sector enrichment 2 2 low income sector enrichment 3 3 high income sector enlargement in which the high income sector expands and absorbs persons from the low income sector th e two enrichment types pose no problem for assessing inequality change in the course of economic growth for high income sector enrichment growth inequality might reasonably be said to increase whereas for low income sector enrichment inequality might be said to decrease these adjustments are non controversial and non problematical where problems arise is in the case of high income sector enlargement growth in that case the two alternative approaches have been shown in this paper to yield markedly results 1 1 the traditional inequality indices generate an inverted u pattern of inequality that is inequality rises in the early stages of high income sector enlargement growth and falls thereafter 2 2 the new approach suggested here based on axioms of gap inequality and numerical inequality generates a u pattern of inequality that is inequality falls in the early stages of high income sector enlargement growth and rises thereafter the discrepancy between the familiar indices and the alternative approach based on axioms of gap inequality and numerical inequality bears further scrutiny two courses of action are possible one might try to axiomatize inequality in ways that generate an inverted u pattern in high income sector enlargement growth thereby rationalizing the continued use of the usual inequality indices with the inverted u property alternatively one might retain the axioms proposed here embed them into a more formal structure and construct a family of inequality indices consistent with them others might wish to pursue the first course i am at work on the second

does monetary policy have asymmetric effects on stock returns this paper investigates whether monetary policy has asymmetric effects on stock returns using markov switching models different measures of a monetary policy stance are adopted empirical evidence from monthly returns on the standard poor s 500 price index suggests that monetary policy has larger effects on stock returns in bear markets furthermore it is shown that a contractionary monetary policy leads to a higher probability of switching to the bear market regime

subsidies for higher education who should pay the resource costs of higher education this paper investigates a simple model of the general equilibrium of the labor market with three skill levels those in the population with the lower level of intelligence and or sophistication can only become low skilled workers but the brighter segment of the population can become either high or medium skilled workers given the tax structure the welfare of each group is maximized by a unique subsidy rate on the cost of training high skilled workers under several circumstances the lower iq group wants a higher subsidy rate than will the group that benefits directly from the training

business cycle durations and postwar stabilization of the u s economy average postwar expansions are twice as long as prewar expansions and contractions are one half as long this paper investigates three possible explanations the first explanation is that shocks to the economy have been smaller in the postwar period the second explanation is that the composition of output has shifted from very cyclical sectors to less cyclical sectors the third explanation is that the apparent stabilization is largely spurious and is caused by differences in the way that prewar and postwar business cycle reference dates were chosen by the national bureau of economic research the evidence presented in this paper favors this third explanation copyright 1994 by american economic association

on bullwhip in supply chains historical review present practice and expected future impact abstract demand amplification or bullwhip as it is now called is not a new phenomenon since evidence of its existence has been recorded at least as far back as the start of the 20th century and is well known to economists yet industry worldwide still has to cope with bullwhip measured not just in terms of the 2 1 amplification which is frequently quoted but sometimes it is as high as 20 1 from end to end in the supply chain this can be very costly in terms of capacity on costs and stock out costs on the upswing and stockholding and obsolescence costs on the downswing in this paper we have identified 10 published causes of bullwhip all of which are capable of elimination by re engineering the supply chain we offer evidence on the present health of a family of supply chains and pinpoint much good practice this is in anticipation that such excellence will become normative in the near future as the learning experience gathers momentum and provided that human factors are properly addressed

factor shares and savings in endogenous growth in models of steady investment driven growth an individual s propensity to save depends on how much of his income is drawn from accumulated factors of production capital rather than from nonaccumulated factors when agents are heterogeneous in this respect growth oriented policies have distributional consequences and in the absence of lump sum redistribution their implementation faces political constraints if the median voter is capital poor relative to the economy s representative agent political interactions tend to slow down growth when policy acts on capital s income share and tend to accelerate it when investment subsidies are the policy instrument of choice copyright 1993 by american economic association

housing market cycles and duration dependence in the united states and canada housing wealth is a large component of households total wealth and plays an important role in aggregate business cycles in this article we explore data on real house price cycles at the aggregate level and city level for the us and canada using a panel of 137 cities we examine the duration and characteristics of housing market cycles in north america we find that north american housing cycles are long averaging 5 years of expansion and 4 years of contraction we estimate a discrete time survival model with a probit specification for house price expansions and contractions this model allows us to test for duration dependence we find that us housing market expansions have positive duration dependence since their exit probabilities increase with duration while contractions seem to have no duration dependence canadian house price cycles did not exhibit duration dependence standard determinants of house prices interest rates income and population growth are included as controls

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

on the persistence and volatility in european american and asian stocks bull and bear markets abstract in this paper we examine the statistical properties of several stock market indices in europe the us and asia by means of determining the degree of dependence in both the level and the volatility of the processes in the latter case we use the squared returns as a proxy for the volatility we also investigate the cyclical pattern observed in the data and in particular if the degree of dependence changes depending on whether there is a bull or a bear period we use fractional integration and garch specifications the results indicate that the indices are all nonstationary i 1 processes with the squared returns displaying a degree of long memory behaviour with respect to the bull and bear periods we do not observe a systematic pattern in terms of the degree of persistence though for some of the indices ftse dax hang seng and sti there is a higher degree of dependence in both the level and the volatility during the bull periods

the effect of replenishment policies on the bullwhip effect a transfer function approach an important phenomenon in supply chain management known as the bullwhip effect suggests that demand variability increases as one moves up a supply chain this paper examines the influence of different replenishment policies on the occurrence of the bullwhip effect the paper demonstrates that certain replenishment policies can in themselves be inducers of the bullwhip effect while others inherently lower demand variability the main causes of increase in variability are projections of future demand expectations which result in over exaggerated responses to changes in demand we suggest that through appropriate selection and use of certain replenishment rules the bullwhip effect can be avoided subsequently allowing supply chain management costs to be lowered

explaining international and intertemporal variations in income inequality this paper explores the propositions that income inequality is relatively stable within countries and that it varies significantly among countries a new and expanded data set provides broad support for both propositions drawing on a political economy and capital market imperfection arguments to explain the intertemporal and international variation in inequality the empirical analysis shows that the predicted variables associated with the first argument a measure of civil liberties and the initial level of secondary schooling and the second argument a measure of financial depth and the initial distribution of land are indeed important determinants of inequality this paper explores two propositions regarding income inequality they are first income inequality is relatively stable within countries and second it varies significantly across countries to illustrate note that the gini coefficient in india remained almost constant for forty years 1951 92 with mean 32 6 and standard deviation 2 0 2 in contrast the variation in gini coefficients across countries is large 61 9 in honduras in 1968 compared with 17 8 in bulgaria in 1976 if substantiated these propositions have potentially significant implications for poverty the significance of the first is obvious barring any fundamental socio political change poverty reduction will depend crucially on the rate of economic growth given this the significance of the second is that in inegalitarian economies the poor will enjoy a smaller share of any national increment in income than in more egalitarian ones drawing on a new and expanded data set on inequality deininger and squire 1996a the first of the paper s three sections conducts standard statistical tests of the two propositions the sample comprises 573 observations on the most common measure of inequality the gini coefficient for 49 developed and developing countries covering the period 1947 94 the results broadly confirm our two propositions specifically analysis of variance anova shows that about 90 of the total variance in the gini coefficients

a pragmatic approach to the design of bullwhip controllers it is well known that forecasting mechanisms can greatly increase bullwhip demand variance amplification of orders as processed by both human and algorithmic decision makers this paper is concerned with the application of the well established apiobpcs decision support system a variant of the order up to rule in such circumstances it has two feedback controls based on the inventory and the orders in pipeline respectively with gains set equal according to the deziel eilon rule there is one feed forward control based on exponential forecasting although this is not a restriction on the application of this system we consider the pragmatic role of apiobpcs in the situation where the echelon decision maker may be handling a wide range of sku s in a non altruistic environment where upmarket information may either be withheld or simply unavailable under such circumstances it has been established via site based studies that the decision makers output the orders reflect a wide range of strategies or maybe ignorance three strategies may be regarded as appropriate i e pass orders along demand smoothing and level scheduling depending on context apiobpcs can be adapted to each of these modus operandi in the first case with the added capability of smoothing the sharp edges with a modicum of inventory variation and in the last case with the advantage of built in trend detection players in non altruistic supply chains must be able to cope with added uncertainties due to lead time variations we show that apiobpcs may be well matched to such situations and is hence copable as well as capable the paper includes recommended parameter settings according to desired decision making policies

real business cycles and the test of the adelmans abstract this paper conducts a modern variant of the test proposed and carried out by adelman and adelman 1959 using the methods developed by burns and mitchell 1946 we see if we can distinguish between the economic series generated by an actual economy and those analogous artificial series generated by a stochastically perturbed economic model in the case of the adelmans the model corresponded to the klein goldberger equations in our case the model corresponds to a simple real business cycle model the results indicate a fairly high degree of coincidence in key economic aggregates between the business cycle characteristics identified in actual data and those found in our simulated economy

measuring and avoiding the bullwhip effect a control theoretic approach an important contributory factor to the bullwhip effect i e the variance amplification of order quantities observed in supply chains is the replenishment rule used by supply chain members first the bullwhip effect induced by the use of different forecasting methods in order up to replenishment policies is analysed variance amplification is quantified and we prove that the bullwhip effect is guaranteed in the order up to model irrespective of the forecasting method used thus when production is inflexible and significant costs are incurred by frequently switching production quantities up and down order up to policies may no longer be desirable or even achievable in the second part of the paper a general decision rule is introduced that avoids variance amplification and succeeds in generating smooth ordering patterns even when demand has to be forecasted the methodology is based on control systems engineering and allows important insights to be gained about the dynamic behaviour of replenishment rules