anticipated monetary policy in canada some new evidence abstract in this note i examine the policy ineffectiveness proposition for canada using monthly income data due to milbourne et al 1988 i find that anticipated monetary policy altered the evolution of real output in canada recent work by ambler and phaneuf 1988 can be used to attribute this result to a purely new keynesian model of the business cycle although this inference is found to be fragile with respect to the choice of the level of significance used in the hypothesis tests

supply side macro economics this paper tests new classical and keynesian explanations of output determination within an encompassing factor utilization model wherein the output decision by producers is modelled as the choice of a utilization rate for employed factors in this encompassing model the ratio of actual to normal output with the latter defined by a nested ces vintage production function with capital energy and employment as factor inputs is explained by unexpected sales a keynesian element abnormal profitability one component of which is the lucas price surprise effect and abnormal inventories results using canadian data show that the keynesian and new classical elements contribute explanatory power as does the production function based measure of normal output while each of these partial models is strongly rejected in favour of the encompassing model the highly structured factor utilization model is also seen to fit better than an unstructured var model u s data confirm the results and show that there are significant effects from abnormal demand profitability and inventory levels even if the labour and capital components of normal output are defined using hours and utilized capital rather than employment and the capital stock the results are also confirmed using alternative output and hence input concepts using a translog function instead of a ces function to define normal output and using data for several other major industrial countries this abstract was borrowed from another version of this item

an econometric investigation of the monetary neutrality and rationality propositions from an international perspective t he combination of the natural rate of unemployment and the rational expectations hypotheses in macroeconomic models results in the now well known conclusion that anticipated short run monetary stabilization policies do not influence real economic variables this policy ineffectiveness proposition has been named the macro rational expectations mre hypothesis by modigliani 1977 as a result the implicit policy prescription is that a price level stabilization policy should be pursued the empirical validity of this conclusion is perhaps the central issue in modern stabilization theory barro 1977 1978 1981 barro and rush 1980 and leiderman 1980 have presented empirical evidence for the united states supporting this proposition however a number of recent studies have claimed that previous empirical results which support the finding that anticipated policy is neutral are flawed corrections of these problems often result in conflicting conclusions see small 1979 gordon 1979 and mishkin 1982 given the important implications of the mre hypothesis it is curious that almost all formal testing has been focused upon the united states while barro has suggested that a cross country study would be useful as far as we know only darby 1980 attempts to test whether anticipated changes in monetary policy are neutral across countries unfortunately his results suffer from problems caused by using generated regressors in addition he makes no attempt to test the individual implications of the mre hypothesis which encompasses the propositions that expectations are rational lad anticipated monetary policy does not matter in this paper we employ the methodology developed by mishkin to test the mre hypothesis in six countries canada germany italy japan the united kingdom and the united states the paper is divided into three major sections and a conclusion section ii briefly reviews mishkin s testing method in section iii the procedure employed to specify the money growth equation is discussed and these equations specified section iv presents and discusses the results of applying the method introduced in section ii in the conclusion the major findings are restated possible limitations discussed and extensions suggested

unanticipated inflation and economic activity abstract this paper presents a new empirical test of the expectations adjusted supply fucntion obtaining the market s inflationary expectations from the market interest rate the results support the existence of a positive relationship between unanticipated inflation and the level of economic activity while anticipated inflation seems to have no effect

optimal healthcare decisions the importance of the covariates in cost effectiveness analysis abstract this paper deals with the decision problem of choosing an optimal medical treatment among m possible candidates when the states of nature are the net benefit of the treatments and regression models for the treatment cost and effectiveness are assumed in this setting a crucial step in the analysis is the construction of the population subgroups sharing characteristics specified by the covariates so that optimal decisions are now not for the whole population of patients but for patient population subgroups we argue that the existing formulations of population subgroups in the literature are too rigid and unrealistic for real applications and instead we formulate the population subgroups on the base of selected influential covariates the bayesian variable selector we use is an optimal one under the 0 1 loss function which means choosing the subset of covariates having the highest posterior probabilities based on the so called intrinsic priors an objective bayesian tool that exhibits an excellent performance for each population subgroup we study the optimal bayesian decisions for two different utility functions one optimal decision is that obtained maximizing the expected net benefit and the other maximizing the expected number of times that the treatment having the highest net benefit is chosen illustrations of the procedure for real data show that the subset of influential covariates may vary across treatments subgroup optimal treatments are derived and compared with those given by preceding methods

environmental influences on mne subsidiary roles economic integration and the nordic countries we seek to examine the importance of environmental factors in determining mne subsidiary roles in particular we examine the environmental factors associated with deep integration schemes such as the eu such schemes require a convergence of economic structure due to the establishment of common regional institutions regulations and policies specifically we distinguish between the scope of activities performed by subsidiaries and the level of competence of those subsidiaries the empirical analysis is based on a large scale survey of foreign owned units in denmark finland and norway these nordic countries differ with regard to their eu membership status norway being the outsider while the others are members but are very similar to each other in most other respects our data show that subsidiaries in norway report significantly lower scores for both scope of activities and levels of competence the effects remain strong even when we are controlling for other potentially influential factors the findings indicate that being on the outside of the eu may indeed carry the price of becoming less attractive to mne activity

budgetary policies and available actions a generalisation of decision rules for allocation and research decisions the allocation problem in health care can be characterised as a mathematical programming problem but attempts to incorporate uncertainty in costs and effect have suffered from important limitations a two stage stochastic mathematical programming formulation is developed and applied to a numerical example to explore and demonstrate the implications of this more general and comprehensive approach the solution to the allocation problem for different budgets budgetary policies and available actions are then demonstrated this analysis is used to evaluate different budgetary policies and examine the adequacy of standard decision rules in cost effectiveness analysis the research decision is then considered alongside the allocation problem this more general formulation demonstrates that the value of further research depends on i the budgetary policy in place ii the realisations revealed during the budget period iii remedial actions that may be available and iv variability in parameters values

u s multinationals and preferential market access this paper examines the relationship between oshoring activity by u s multinational rms and the structure of u s trade preferences we combine rm level panel data on u s foreign aliate activity from the u s bureau of economic analysis bea with detailed measures of u s trade preferences from the u s international trade commission usitc to create a three way panel that spans 80 industries 184 countries and ten years 1997 2006 consistent with existing theory we nd that o shoring and preferential market access are positively and consistently correlated both in the pooled sample and within countries industries and years using both instru mental variables and simultaneous equations approaches to address the endogeneity of export oriented foreign investment we nd that a 10 increase in u s foreign aliate exports to the u s from a particular industry and country is associated with a 4 per centage point increase in the rate of preferential duty free access restricting attention to the generalized system of preferences gsp among potentially eligible develop ing countries we nd that the inuence of multinational aliate sales on preferential market access more than triples

stochastic models for strategic resource allocation in nonprofit foreclosed housing acquisitions abstract increased rates of mortgage foreclosures in the u s have had devastating social and economic impacts during and after the 2008 financial crisis as part of the response to this problem nonprofit organizations such as community development corporations cdcs have been trying to mitigate the negative impacts of mortgage foreclosures by acquiring and redeveloping foreclosed properties we consider the strategic resource allocation decisions for these organizations which involve budget allocations to different neighborhoods under cost and return uncertainty based on interactions with a cdc we develop stochastic integer programming based frameworks for this decision problem and assess the practical value of the models by using real world data both policy related and computational analyses are performed and several insights such as the trade offs between different objectives and the efficiency of different solution approaches are presented

the irrelevance of inference a decision making approach to the stochastic evaluation of health care technologies the literature which considers the statistical properties of cost effectiveness analysis has focused on estimating the sampling distribution of either an incremental cost effectiveness ratio or incremental net benefit for classical inference however it is argued here that rules of inference are arbitrary and entirely irrelevant to the decisions which clinical and economic evaluations claim to inform decisions should be based only on the mean net benefits irrespective of whether differences are statistically significant or fall outside a bayesian range of equivalence failure to make decisions in this way by accepting the arbitrary rules of inference will impose costs which can be measured in terms of resources or health benefits forgone the distribution of net benefit is only relevant to deciding whether more information is required a framework for decision making and establishing the value of additional information is presented which is consistent with the decision rules in cea this framework can distinguish the simultaneous but conceptually separate steps of deciding which alternatives should be chosen given existing information from the question of whether more information should be acquired it also ensures that the type of information acquired is driven by the objectives of the health care system is consistent with the budget constraint on service provision and that research is designed efficiently

deficits money and inflation abstract this paper examines the interrelationships between monetary and fiscal policy specifically it seeks to determine whether government budget deficits influence monetary growth using a money supply model originally developed by barro we find that deficits have had a significant impact on the growth of the u s money supply throughout most of the period since 1961 such a relationship need not always hold it depends on whether government deficits place upward pressure on interest rates and whether the central bank monetizes the debt in an effort to stabilize interest rates

multilateral trade liberalisation foreign direct investment and the volume of world trade a cournot duopoly model is used to explain the paradox that multilateral trade liberalisation has resulted in increases in both the volume of world trade and the amount of foreign direct investment fdi

preferential trade areas multinational enterprises and welfare the effects of preferential trade areas ptas on the investments by multinational enterprises and their implications for the welfare of members and non members are studied in a model with two types of firms national firms and multinational firms in the presence of multinational activity ptas can create new investment as well as divert investment from non members to members both affect the welfare of members positively more interestingly if the investment creation effect of a pta is sufficiently strong then the pta could be welfare enhancing for non members as well jel classification f2 l1 aires preferentielles de commerce entreprises plurinationales et bien etre on etudie les effets des aires preferentielles de commerce apc sur les investissements par les entreprises plurinationales et leurs implications pour le bien etre des pays membres et non membres a l aide d un modele ou l on retrouve deux genres d entreprises les entreprises nationales et plurinationales quand des operations plurinationales existent les apc peuvent creer de nouveaux investissements mais aussi deplacer certains investissements des pays non membres vers les pays membres ces deux effets affectent le niveau de bien etre des pays membres positivement il est interessant de noter que si l effet de creation d investissements d une apc est suffisamment puissant l apc peut entrainer une augmentation du niveau de bien etre des pays non membres

export platform foreign direct investment theory and evidence this paper proposes a model that accounts for export platform fdi a form of fdi that is common in the data but rarely discussed in the theoretical literature unlike the previous literature this paper s theory nests all the typical modes of supply including exports horizontal and vertical fdi horizontal and vertical export platform fdi the theory yields the testable hypothesis that a decrease in either inter regional or intra regional trade costs induces firms to choose export platform fdi the empirical analysis provides descriptive statistics that point to large proportions of third country exports of us fdi and an econometric analysis whose results are in line with the model s predictions the paper suggests policy implications for nations seeking to attract fdi

mathematical programming for the efficient allocation of health care resources previous discussions of methods for the efficient allocation of health care resources subject to a budget constraint have relied on unnecessarily restrictive assumptions this paper makes use of established optimization techniques to demonstrate that a general mathematical programming framework can accommodate much more complex information regarding returns to scale partial and complete indivisibility and program interdependence methods are also presented for incorporating ethical constraints into the resource allocation process including explicit identification of the cost of equity

regional tax coordination and foreign direct investment this paper analyses the effects of a regionally coordinated profit tax or location subsidy in a model with three active countries one of which is not part of the union and a globally mobile firm we show that regional coordination can lead to two types of welfare gain first for investments that would take place in the union in the absence of coordination a coordinated tax increase can transfer location rents from the firm to the union second by internalising all of the union s benefits from foreign direct investment a coordinated tax reduction can attract more welfare enhancing investment than when member states act in isolation depending on which motive dominates tax levels may thus rise or fall under regional coordination

export oriented fdi in the uk it is well known that the performance of foreign firms compared to domestic companies is superior with respect to employment wages and productivity in this paper we detail the export behaviour of foreign affiliates in the united kingdom relative to indigenous firms our findings show that foreign firms are more likely to export and when they do so they are more export intensive and overall contribute disproportionately to total manufacturing exports from the uk while firm level advantages explain some of these differences in export behaviour strategic considerations dominate where these include the differential in costs productivity and market size between the uk and foreign countries that is both horizontal and vertical motives can be found for the use of the uk as an export platform by foreign firms copyright 2004 oxford university press

economies of scale and market structure in international grain trade a large body of literature has examined international grain trade in imperfectly competitive models the article develops a two stage duopoly model that considers a private trader and a state trading enterprise ste competing on a foreign market the key difference between the private trader and the ste is their international organization while the ste makes use of external agents to export the private firm may choose to internalize international transactions the game is solved for different modes of competition and under both assumptions of homogeneous and differentiated products in order to assess how these assumptions affect the outcome of the game the results of the game are examined by using numerical examples the analysis shows that external shocks on export markets may result in a change of market structure and consequently of market shares these effects depend on the initial market structure furthermore the degree of product differentiation and the assumed mode of competition significantly affect the relative values of transaction and fixed costs at which the market structure changes

econometric issues in macroeconomic models with generated regressors the paper critically reviews the literature on the econometric issues raised by the use of generated regressors gr in empirical models the economic rationale for the use of gr is considered with examples being drawn from several macroeconomic examples including new classical macroeconomic ncm models which postulate monetary neutrality various estimation methods are discussed for models which include surprise or unexpected terms and the strengths and weaknesses of each approach are investigated drawing upon the work of mcaleer and mckenzie 1991 situations where the typically inefficient two step estimation 2se method will be efficient are highlighted problems of model misspecification and measurement errors are also investigated an empirical section highlights some of the dangers of using uncorrected 2se estimation results through a careful consideration of many recent attempts to test the ncm monetary neutrality hypothesis copyright 1993 by blackwell publishers ltd

does economic integration cause foreign direct investment the authors analyze the effect of economic integration on oligopolists international trade and foreign direct investment activities using a three country three firm model increased country size leads to dispersed foreign direct investment while improved market accessibility leads to export platform foreign direct investment increased intraregional market accessibility prompts outside firms to invest in the regional bloc reducing product prices profits of intrabloc firms and increasing total surplus integrating economies are more likely to gain from improving intraregional market accessibility than from tougher external trade policy and may wish to offer investment incentives to encourage foreign direct investment by outside firms copyright 1996 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

regional economic integration and geographic concentration of multinational firms abstract a number of theoretical studies have predicted that preferential trade agreements ptas raise outside multinationals incentive to invest in the participating countries especially in those that are integrated with larger markets and have lower production costs the hypothesis has however not been tested empirically this paper addresses the issue by estimating the impact of ptas on countries ability to attract multinationals the evidence is broadly consistent with expectations the formation of ptas leads to an increase in fdi by outside multinationals but the effect varies sharply with the size of integrated markets and countries comparative advantage countries integrated with larger markets experience a greater increase in total and export platform fdi those with a higher labor endowment also attract more fdi especially in labor intensive industries but at the expense of their labor scarce pta partners

preferential trade agreements and tax competition for foreign direct investment abstract this paper examines how free trade agreements and customs unions affect the location of foreign direct investment fdi and social welfare taking into account that governments may adjust taxes and external tariffs to compete for fdi conditions are identified under which a free trade agreement leads to fdi and under which this improves welfare the welfare effect is shown to depend on the relative size of efficiency gains in production and government revenue losses due to tax competition a free trade agreement may fail to induce welfare improving fdi creating a role for a customs union

tariff jumping and joint ventures it is well known that high tariffs tend to induce foreign direct investment fdi by encouraging the investors to jump the tariff wall this paper examines the economic interaction among tariffs fdi and international joint ventures ijv we show that in the presence of a strong local competitor even if opening a fully owned subsidiary is not profitable to a foreign firm the foreign firm may still enter the host country market through ijv however ijv is not profitable for sufficiently high tariff rates hence we argue that liberal trade policies may attract foreign investments through the formation of joint ventures

uncertainty and value of information when allocating resources within and between healthcare programmes a two stage stochastic mathematical programming formulation has been developed to optimally allocate resources within and between healthcare programmes when there is an exogenous budget and the parameters of the healthcare models are variable and uncertain this formulation solves the optimal resource allocation problem and calculates the expected value of acquiring additional information to resolve the uncertainties within the allocation it is shown that the proposed formulation has several advantages over the chance constrained and robust mathematical programming methods

anticipated money inflation uncertainity and real economic activity this paper critically examines a number of maintained hypotheses that are necessarily being tested along with the basic notion derived from the rational expectations re formulation of lucas 1972 19 73 that only unanticipated money matters the trend stationary representation of secular real output of lucas and others is replaced by a difference stationary representation found by nelson and plosser 1980 to be consistent with u s historical data the impact of inflation uncertainty on real activity is considered attention is paid to possible mis measurement of agents ex ante anticipated money growth it is found that three alternative measures of anticipated money growth produce a stable impact on growth of output and employment contemporaneous and lagged values of unanticipated money growth have no significant additional explanatory power in the presence of any one of the three measures of anticipated money growth beyond this it is impossible to reject the hypothesis that the initial positive real impact of anticipated money is not temporary inflation uncertainty is found to act as a significant depressant of real economic activity in the presence of all tested combinations of anticipated and unanticipated money growth this abstract was borrowed from another version of this item