monetary policy with asset backed money we study the use of asset backed money in a neoclassical growth model with illiquid capital a mechanism is delegated control of productive capital and issues claims against the revenue it earns these claims constitute a form of asset backed money the mechanism determines i the number of claims outstanding ii the dividends paid to claim holders and iii the structure of redemption fees we find that for capital rich economies the first best allocation can be implemented and price stability is optimal however for sufficiently capital poor economies achieving the first best allocation requires a strictly positive rate of inflation in general the minimum inflation necessary to implement the first best allocation is decreasing in capital wealth

pricing free bank notes abstract during the pre civil war period us banks issued distinct private monies called bank notes a bank note is a perpetual risky non interest bearing debt claim with the right to redeem on demand at par in specie this paper investigates the pricing of this private money taking into account the enormous changes in technology during the period namely the introduction and rapid diffusion of the railroad a contingent claims pricing model for bank notes is proposed and tested using monthly bank note prices for all banks in north america together with indices of the durations and costs of trips back to issuing banks constructed from pre civil war travelers guides evidence is produced that market participants properly priced the risks inherent in these securities suggesting that wildcat banking was not common because of market discipline

the influence of location upon profitability and employment change in small companies this paper examines the hypothesis that firms located in large urban areas suffer from location diseconomies which significantly reduce their profitability and propensity to create employment this hypothesis is tested on a sample of companies located within a single region the north of england over the period 1974 81 the empirical results suggest that neither trading profits nor employment change are significantly influenced by location however the amount taken out of the business in the form of directors remuneration which on average swallowed up 61 5 per cent of trading profits is significantly negatively related to employment change this suggests that with respect to employment creation public policy should focus on influencing the size of directors remuneration rather than on directly increasing trading profits fiscal policies may not be effective in this context however with the result that significantly influencing the behaviour of small firm directors may be a policy role best fitte

technology acquisition with technological progress effects of expectations rivalry and uncertainty abstract we study the effect of expectations regarding technological progress on a firm s technology adoption decision in a duopoly new generation technologies become available one in each period with successive generations representing better and better performance a game theoretic framework is used involving two identical firms competing in the same market over two periods it is shown that expectations retard adoption of the first period technology it is also shown that an asymmetric equilibrium results in higher social welfare and that more investment does not necessarily mean higher levels of welfare uncertainty is shown to have either no effect or a negative effect on the adoption of the current technology when nash equilibrium holds however when subgame perfect equilibrium holds uncertainty has a more complicated effect and numerical examples show that it may even encourage the adoption of the current technology relative to the deterministic equilibrium

economies of scope and economies of agglomeration abstract agglomeration economies are economies external to the firm and plant but internal to a particular location in this paper the notion of agglomeration economies is formally investigated the implications of the concept for urban structure and industrial organization are then traced under specified considerations weak economies of agglomeration as defined in this paper are shown to be necessary for the existence of an urban area

can currency competition work abstract can competition among privately issued fiat currencies work only sometimes and partially to show this we build a model of competition among privately issued fiat currencies a purely private arrangement fails to implement an efficient allocation even though it can deliver price stability under certain technological conditions although currency competition creates problems for monetary policy it is possible to design a policy rule that uniquely implements an efficient allocation

misintermediation and macroeconomic fluctuations abstract individuals plan consumption and production for different point in the future using interest rates of various maturities as a guide however the financial intermediaries individuals work through traditionally do not match the maturity structure of their assets and liabilities as a result aggregate production plans and aggregate consumption plans for each period in the future need not coincide the resulting discrepancy will eventually appear as a recession or boom involving an unanticipated change in interest rates and production inside the original intertemporal production possibilities frontier maturity transformation is therefore not an essential function of financial intermediation but rather a mis function one which we call misintermediation

fiscal spillovers in the euro area this paper analyses the dynamic effects of fiscal imbalances in a given emu member state on the borrowing costs of other countries in the euro area the estimation of a multivariate multi country time series model specifically a global var or gvar using quarterly data for the emu period suggests that euro denominated government yields are strongly linked with each other however financial markets seem to be able to discriminate among different issuers consequently fiscal imbalances in italy and in other peripheral countries should be closely monitored by their emu partners and the european institutions

technological expectations and adoption of improved technology abstract attention is focused upon the adoption demand rather than the creation supply of new technology which improves from time to time based on the expected flow of technological progress over which the firm demander has no control it must decide either to adopt the current best available technology or to postpone adoption the distinguishing features of the model are that more than one technological innovation is anticipated and expectations about the likelihood of such innovations are revised as time passes since the last innovation our analysis shows that the firm will adopt the current best practice if its technological lag exceeds a certain threshold moreover as time passes without new technological advances it may become profitable to purchase a technology that has been available even though it was not profitable to do so in the past

on the economics of private money abstract the application of laissez faire to the monetary system is a key ingredient of important proposals for monetary reform both new and old that seek to discipline government creation of money through competition this paper provides an overview of issues to be encountered in the construction of theoretical models of private monetary economies including consideration of market imperfections that have been hypothesized to arise in these systems further some descriptive history of the less regulated monetary systems of 19th century new york is undertaken with an emphasis on discussing the nature of market generated banking and monetary institutions in light of these critiques

the demand for industrial sites in a metropolitan area theory empirical evidence and policy implications abstract a model of urban manufacturing location is developed in order to explain the demand for industrial sites in a metropolitan area within the theory of qualitative choice behavior firms identified by a set of eight characteristics are viewed as selecting sites possessing two attributes of varying degrees of importance to different kinds of firms using a multinomial logit specification the model is estimated for the cincinnati smsa the results lend support to the firm specific nature of the site selection process information concerning the determination of the spatial distribution of the firm types in cincinnati is derived from the analysis implications for the possible effectiveness of a policy initiative designed to alter existing patterns of urban industrial location conclude the paper

currency competition a hayekian perspective on international monetary integration currency internationalization is examined from the vantage point of friedrich hayek s contributions in the 1970s compared with received commentaries in which only an idealized case for private money is attributed to hayek this paper underscores other dimensions of hayek s work on money and currency hayek s case for choice in currency draws on his theory of competition anticipates competition between government suppliers of fiat money accommodates many aspects of international monetary integration and embodies a distinctive approach to monetary independence choice of exchange rate regime and the transnationalization of currency hayekian predictions are outlined for future developments in currency competition

the reaper and the scanner indivisibility led incremental innovations and the adoption of new technologies widespread adoption of a new capital embodied technology requires a continu ous flow of incremental innovations a few of them address the key problem of indivisibility by making renting the new machine a viable alternative to buying it or by dividing it up into modular elements such incremental innovations differ from the learning by doing effects usually considered by diffusion models and greatly affect the structure of the adopting industry the case for keeping them in due account is made by revisiting paul david s classic paper on the mccormick reaper by criticising the subsequent evolution of threshold models of adoption and by summarising my own findings on the diffusion of electronic pre press devices

the ban on indexed bonds 1933 77 in a recent article in this review nissan liviatan and david levhari attempt to explain the phenomenon that in spite of recent marked inflationary trends the important capital markets have not developed a significant free private enterprise market for cost of living linked bonds p 366 they note that the familiar theoretical complete dominance of indexed bonds over nonindexed bonds holds unambiguously only in an economy in which there are no nominal assets they demonstrate that borrowers may in theory insist on hedging the inflation risk on their nonindexed cash balances by issuing some nonindexed bonds at a discount that makes them attractive in spite of the risk they impose on lenders their model leads them to conclude that indexed bonds might not completely dominate nonindexed bonds however they do not claim that their model explains the phenomenon they set out to explain why is it that the free market to use their expression has come up with virtually no indexed bonds at all fortunately a simple explanation for the nonexistence of indexed bonds in the united states was provided two years

information learning and the stability of fiat money abstract we analyze the stability of monetary regimes in an economy where fiat money is endogenously created by the government information about its value is imperfect and learning is decentralized we show that monetary stability depends crucially on the speed of information transmission in the economy our model generates a dynamic on the acceptability of fiat money that resembles historical accounts of the rise and eventual collapse of overissued paper money it also provides an explanation of the fact that despite its obvious advantages the widespread use of fiat money is only a recent development

declining city productivity and the growth of rural regions a test of alternative explanations prior to the 1970s the u s witnessed a net flow of migrants from its nonmetropolitan to its metropolitan region since then however a dramatic reversal of this long standing tendency for people to concentrate in metropolitan places has been observed nonmetropolitan places have gained migrants largely as the result of increased outmigration from metropolitan areas an open question has been to what extent the employment profile between metropolitan and nonmetropolitan places parallels that of population this paper introduces a data series compiled from county business patterns that is used to analyze the employment trends for the first time the analysis reveals that not only is total employment growing fastest in nonmetropolitan counties but it also appears that the turnaround in employment growth preceded the reversal in the rate of population increase manufacturing which had faster nonmetropolitan growth rates even during the 195os appears to have led in the development of nonmetropolitan counties this shift of manufacturing has attracted other sectors as well as people to nonmetropolitan places part of the recent growth of nonmetropolitan counties represented nothing more than a continuation of suburbanization or spillover of people and jobs which permitted one more outward bound into adjacent nonmetropolitan counties but there is more to nonmetropolitan development than simply metropolitan spillover nonmetropolitan counties far removed from metropolitan ones are also growing faster than metropolitan counties it is shown that this rural renaissance is part of a general deconcentration

locational patterns and dynamics of industrial activity in the modern metropolis this paper attempts to review and re structure a mass of published ideas on the geography of industrial activity in the modern metropolis the argument proceeds in a series of stages first some basic locational factors in the city are examined second a critical discussion of the literature on economies of agglomeration and scale in cities is undertaken third a brief description of manufacturing activity in nineteenth century cities is provided by way of motivating and orientating the succeeding discussion fourth the phenomenon of industrial decentralisation in twentieth century cities is described fifth an attempt is made to construct a composite theory of intra metropolitan industrial location on the basis of the historical process of the substitution of capital for labour in capitalist commodity production sixth a schematic re statement of the theory is presented and its implications for the spatial cum organisational evolution of modern industry are elucidated seventh some of the main po

when do industries cluster a proposal on how to assess an industry s propensity to concentrate at a single region or nation abstract often the literature on clustering implicitly assumes national or regional sectoral agglomeration to be a general phenomenon applying to all or most businesses we argue that not all industries are equally affected by the process of clustering therefore the question on how to assess the relevance of clustering for a particular company or industry becomes important it is deduced that those industries with a divisible production process and a transportable product or service fulfil the necessary conditions for clustering a long value chain including multiple distinct competencies innovation intensity characterised by network innovations and the volatility of markets further increase the potential for an industry to cluster besides providing a heuristic for strategic management this paper alerts regional planners that only in those regions whose economic structure is characterised by industries subject to clustering the promotion of local network building is relevant

worlds apart the changing market geography of the german machinery industry german producers of advanced machinery have long enjoyed a reputation for technical excellence and export success the literature attributes much of the industry s success inter alia to various forms of interfirm cooperation between smes within spatial clusters such as that found in baden wurttemberg however this industry entered a period of relative crisis in the early 1990s experiencing stagnant or declining sales and growing competition from foreign firms among the reasons commonly advanced to explain this crisis are the decline of intraregional cooperation especially with other machinery producers the loss of domestic sales in the wake of the german car industry s downturn and excessively costly wages and benefits for workers in the machinery industry this paper offers an alternative interpretation based on geographical shifts in the industry s markets and the difficulty of sustaining close mutually beneficial interaction with customer firms abroad evidence comes from a study of the production and use of advanced manufacturing technologies involving interviews with machinery producers in germany and user firms in canada interviews reveal that in the light of less than satisfactory relations with german machinery firms north american customers are turning increasingly to domestic sources of supply in responding to these challenges the german machinery industry is now instituting changes to its spatial organization which may undermine the future integrity of its traditional home production regions

modelling regional patterns of innovation diffusion in the uk metalworking industries alderman n and davies s 1990 modelling regional patterns of innovation diffusion in the uk metalworking industries reg studies 24 513 528 in this paper davies economic model of innovation diffusion is tested at the regional level using survey data on the adoption of a number of key manufacturing technologies based on microelectronics or new materials within nine industries engaged primarily in metalworking activities the results demonstrate that there are regional variations in the rates of diffusion along one or other of the two types of trajectory derived from the model and that these have been slower in some peripheral regions than elsewhere these variations may be partly but by no means entirely accounted for by regional differences in industrial structure and establishment size distributions it is suggested however that as diffusion approaches saturation level regional convergence will be observed alderman n et davies s 1990 la modelisation de la distribution regionale de la diff

sectoral patterns of technical change towards a taxonomy and a theory abstract the purpose of the paper is to describe and explain sectoral patterns of technical change as revealed by data on about 2000 significant innovations in britain since 1945 most technological knowledge turns out not to be information that is generally applicable and easily reproducible but specific to firms and applications cumulative in development and varied amongst sectors in source and direction innovating firms principally in electronics and chemicals are relatively big and they develop innovations over a wide range of specific product groups within their principal sector but relatively few outside firms principally in mechanical and instrument engineering are relatively small and specialised and they exist in symbiosis with large firms in scale intensive sectors like metal manufacture and vehicles who make a significant contribution to their own process technology in textile firms on the other hand most process innovations come from suppliers these characteristics and variations can be classified in a three part taxonomy based on firms 1 supplier dominated 2 production intensive 3 science based they can be explained by sources of technology requirements of users and possibilities for appropriation this explanation has implications for our understanding of the sources and directions of technical change firms diversification behaviour the dynamic relationship between technology and industrial structure and the formation of technological skills and advantages at the level of the firm the region and the country

financial futures markets and tabular standards the goal of a monetary system that provides assurance against fluctuations in purchasing power is ancient one frequently suggested and repeatedly rediscovered proposal is to attain that result by linking the currency unit to a price index that device was proposed in the nineteenth century by w stanley jevons and by alfred marshall who named it a tabular standard it has been repeatedly rediscovered in marshall s version it required no governmental action except the issuance of a price index number something which has of course become widely prevalent individuals would simply in their own interest be led to make contracts specified not in terms of the nominal number of monetary units the number of dollars but in terms of the purchasing power equivalent of the present number of monetary units that is the contract would call for paying a given number of dollars multiplied by the ratio of a price index as of that date to the date on which the contract was entered into despite the theoretical attractiveness of this idea and the absence of any effective hindrance to its adoption it has never become popular it is a particular version of the generally attractive idea of widespread indexation yet indexation has been extensive only when inflation has been extremely high and variable as in some south american countries and israel and has generally fallen into disuse when inflation has been conquered the only area in which there are any large number of indexed contracts is the area of labor contracts and even here the use of indexation is by no means dominant and tends to rise and decline as inflation rises and declines

the urban rural manufacturing shift in the european community the paper documents for the first time at the european community scale a relative shift of manufacturing industry from highly urbanised to rural regions during the 1970s this shift is evident in

substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands coombes m g green a e and owen d w 1988 substantive issues in the definition of localities evidence from sub group local labour market areas in the west midlands reg studies 22 303 318 local labour market areas llmas are now widely accepted as the most appropriate areal units for analyses of spatial patterns of employment and unemployment the most commonly used set of llmas in britain are the travel to work areas ttwas of the department of employment these areas are increasingly being used for locality studies that encompass not only labour and demand trends but also their social and political implications however ttwas are defined on the basis of aggregate commuting patterns which generalize substantial differences in the journey to work behaviour of different sections of the workforce this paper compares the ttwas as revised in 1984 with llmas defined using the same methodology for four sub groups of the labour force with differing skill levels in the west midlands the numb

urban rural variations in the structure of manufacturing production this paper demonstrates that recent attempts to explain manufacturing shifts to nonmetropolitan areas can be synthesised into a capital vintage model of production the result is a set of systematic differences between urban and rural production methods which are consistent with the locational implications of the manufacturing process cycle theory the model is supported by the first comprehensive estimation of separate production functions for smsas and nonmetropolitan areas using census data for the us from 1977 only smsas are shown to possess the significant agglomeration economies needed for product development and process innovation cost competitive nonmetropolitan areas show much greater variation in input proportions due to spatial factor price differentials

firms governments and innovation in the chukyo region of japan the study of innovation mechanisms in one of japan s major industrial regions chukyo based around nagoya is explored using a four part model this identifies the role of core assembly firms and their sub contractors national and local government agencies local chambers of commerce and private sector lobby groups the chukyo region innovation system cris was found to exhibit long term stability and appears to have weathered the economic challenges of the late 1980s and early 1990s the chukyo region s emphasis on continuous upgrading and kaizen has given it particular competitive advantages in downstream innovation activities however it now faces the challenge of moving further upstream into areas of basic research

discrimination fact or fiction an examination using an alternative approach women earn less than men blacks earn less than whites these facts are blatantly observable in the economy with the proliferation of civil rights legislation in the last two decades social scientists have become increasingly concerned with the determination of the wage gap attributable to discrimination because workers have different productivities statistical methods have been used to isolate the discrimination effect from wage differences justified by differences in productivity the primary method estimates an equation with wages expressed as a function of productivity and sex or race since productivity cannot be directly observed a number of proxies for productivity have been used such as education tenure and experience statisticians 11 have shown that the necessity of using proxies results in statistical biases which may tend to overestimate discrimination they have shown that mismeasuring any independent variable can impart a bias on each regression coefficient thereby causing a severe misestimate of discrimination these errors are proportional to the degree of mismeasurement the relative degree of error variance in the independent variables as well as to the amount of intercorrelation between each variable and race or

implementing advanced manufacturing technologies in mature industrial regions towards a social model of technology production gertler m s 1993 implementing advanced manufacturing technologies in mature industrial regions towards a social model of technology production reg studies 27 665 680 industrial surveys reveal that manufacturers in mature industrial regions of canada the united states and the united kingdom have been adopting advanced process technologies at reasonable rates during the 1980s however the expected improvements in productivity growth have failed to materialize and case study evidence suggests that such manufacturers are indeed encountering considerable difficulty in utilizing such technologies effectively increasingly such regions share a common characteristic that they are geographically removed from the now dominant sources of production of advanced industrial machinery based on a critical review of recent theoretical contributions from geography regional development economic history management studies and the economics of technological change this paper explores the implications of spa

managing product families the case of the sony walkman abstract success in fast cycle industries e g consumer electronics can depend both on rapid model replacement and on model longevity although sony was as fast as any of its chief competitors in getting new models to market an important explanation for the wide variety of models offered by the firm is the greater longevity of its key models this finding adds an important insight to the conventional literature on time based competition which emphasizes rapid innovation exclusively sony s special understanding of the us market enabled it to respond more effectively to life style differences by locating industrial designers in its key markets sony s strong design capability and effective division of labor engineers lead generational and incremental projects industrial designers and market personnel lead topological projects allow for parallel model development investment in manufacturing flexibility amortized over multiple models within the product family make the rapid model changeover possible

technology use and plant closure abstract this paper aims to contribute to the empirical literature on industrial demography it analyzes a stratified sample of the italian metalworking industry composed of 810 plants with more than 10 employees it considers plant closure over the period 1989 1997 probit type econometric models are estimated in order to provide evidence on the explanatory factors of the likelihood of closure with special attention being devoted to technological variables the paper extends previous empirical results along a number of directions first in spite of the fact that use of advanced technologies especially in the design and engineering sphere favors survival remarkable differences do emerge between different individual technologies ceteris paribus plants having adopted technologies characterized by sizable product specific investments turn out to be less likely to be shut down in addition the ownership status of plants is found to influence the probability of closure likelihood of survival is lower for plants that belong to multi unit organizations than for those owned by single plant firms even though the difference between the two plant categories decreases with plant size altogether such results point to the relevance of irreversibility and sunk costs for understanding exit behavior

the intra firm diffusion of new process technologies the study of intra firm diffusion has largely been neglected and the limited extant literature overwhelmingly relies upon uncertainty reduction via information spreading or epidemic learning as the main driver in this paper an alternative approach is taken whereby the intra firm diffusion of new process technologies reflects the profitability of new technology adoption as proxied by firm characteristics the approach is tested using data relating to the diffusion of computer numerically controlled machine tools within firms in the uk engineering and metalworking sectors the empirical analysis does not reject the hypothesis that profitability considerations are important with a number of firm characteristics being isolated as of special relevance including firm size and the use of complementary technologies and managerial techniques however there is little support for the traditional epidemic effect

cross sectional estimation in marketing direct versus reverse regression empirical results in marketing research are often derived from linear additive models estimated on cross sectional data an underlying assumption of these model specifications is that each exogenous variable contributes an additive effect to the endogenous variable measuring these additive effects is problematic if some components of the endogenous variable are not observable to the researcher reliance on observable correlates to capture those aspects of the endogenous variable might require reverse regression to ensure unbiasedness of the estimated effects in contrast to direct regression used exclusively in marketing research reverse regression first estimates the effect of the endogenous variable on those correlates and then derives unbiased estimates of the additive effect of other exogenous variables specified in the basic model this paper discusses the reverse regression approach relying on recently published analytic results a statistically powerful and analytically simple test is developed which allows the marketing researcher to assess a priori whether direct or reverse regression will provide unbiased parameter estimates an empirical illustration focuses on the measurement of potential market share rewards for pioneering businesses contained in the pims data base other areas in marketing where the issue of direct versus reverse regression is pertinent are mentioned

complementarity and cumulative learning effects in early diffusion of multiple technologies this paper concentrates on the contextual diffusion of flexible automation production and design engineering technologies in the italian metalworking industry the authors use duration data analysis with explanatory covariates to point out the role of complementarities between the technologies examined and learning by using effects matured with experience of previously available technologies in shaping diffusion paths the impact of industry and plant specific control variables as well as that of the stock of previous adopters on adoption probabilities is also taken into account in addition the authors analyze duration versus calendar time dependence of adoption probabilities copyright 1995 by blackwell publishing ltd

where to draw lines stability versus efficiency what kinds of assets should financial intermediaries be permitted to hold what kinds of liabilities should they be allowed to issue should a government or a central bank offer explicit deposit insurance or implicit deposit insurance by acting as a lender of last resort this paper reviews how tensions involving stability versus efficiency and regulation versus laissez faire have for centuries run through macroeconomic analysis of these questions

between luminaires and meat grinders international trade fairs as temporary clusters bathelt h and schuldt n between luminaires and meat grinders international trade fairs as temporary clusters regional studies this paper claims that international trade fairs viewed as temporary clusters are important events that support economic processes of interactive learning and knowledge creation in such settings geographical proximity and face to face contact enable actors from different countries to exchange information about markets products and innovations the variety of planned and unplanned meetings and the rich ecology of information flows and different forms of interaction create global buzz firms use such events to consciously establish pipelines with new business partners worldwide the paper will present empirical evidence from two flagship fairs held in frankfurt main germany to support these claims bathelt h et schuldt n soit magasin de luminaires soit hachoirs de viande les foires commerciales internationales comme grappes temporaires regional studies cet artic

endogenous supply of fiat money abstract we consider whether reputation concerns can discipline the behavior of a long lived self interested agent who has a monopoly over the provision of fiat money we obtain that when this agent can commit to a choice of money supply there is a monetary equilibrium where it never overissues we show however that monetary equilibria with no overissue do not exist when there is no commitment this happens because the incentives this agent has to maintain a reputation for providing valuable currency disappear once its reputation is high enough more generally we prove that in the absence of commitment overissue happens infinitely often in any monetary equilibrium we conclude by showing that imperfect memory can restore the positive result obtained with commitment

rejoinder to comments on reverse regression fairness and employment discrimination 1984 rejoinder to comments on reverse regression fairness and employment discrimination journal of business economic statistics vol 2 no 2 pp 126 139

has government any role in money abstract recent interest in monetary reform has been sparked by the emergence of a world irredeemable paper money system in light of this interest we review the current validity of four good reasons friedman advanced in 1960 to rationalize government intervention we conclude that the forces that produced government involvement in the past will persist deregulation of financial intermediaries is desirable on grounds of market efficiency though it is an open question whether government should continue as lender of last resort we expect that the present world fiat money standard will neither degenerate into hyperinflation nor revert to a commodity standard

an evolutionary pattern of innovation diffusion the case of flexible automation abstract the aim of this paper is to provide evidence supporting an evolutionary model of the process of innovation diffusion relying on an extensive field study the paper analyses the pattern of adoption of the entire set of innovations deriving from the flexible automation paradigm on the part of a large sample of italian metalworking firms owing to the relevance of the technology examined and to the size of the sample the case illustrates quite representatively the dynamics of the early stage of development of radical and complex innovations the main results of the paper confirm the importance of firm size and market structure to explain the characteristics of the innovation diffusion process at the same time they emphasize that the localized search procedures on the part of potential users involve a step by step approach to adoption namely the technological and organizational profile of firms turns out to play a decisive role in favouring diffusion moreover empirical support is provided for the existence of persistent market disequilibria along the diffusion paths witnessed by the extent of the retrofitting phenomenon

right to work laws do matter recent economic literature has ascribed a benign influence to right to work rtw laws the apparent consensus is that rtw laws do not reduce union membership because organized labor must have already been weak at the time right to work laws were enacted this time series observation i e union membership is not significantly lower after rtw laws have been enacted than what it was before has been misapplied to argue that right to work laws are not associated with economic differences between right to work states and union shop states a closer look at this nonsequitur is in order this paper contends that right to work laws do matter the consensus to the contrary rests on a shakey econometric foundation proponents of the proposition that rtw laws are harmless have never subjected that hypothesis to empirical scrutiny instead they have tested weak models of the right to work laws do matter hypothesis by rebutting a characterature of a proposition they set out to refute these analysts make their own hypothesis the null hypothesis it is not hard to support a precept which is proved merely by showing that the probability that it is false is less than 95 percent such procedures generate impressive polemics they do not further the interests of positive economics

laissez faire monetary theorists in late nineteenth century america economists have recently begun to reconsider many forms of regulation of money and banks from what may be termed a laissez faire perspective some have questioned fundamentally the rationale for any government role this development raises an interesting question for historians of thought what intellectual support did the concept of a free market monetary system receive in the 19th century the heyday of classical liberalism and laissez faire thought this paper takes up the question by critically surveying american monetary writings from the last half of the 19th century 2 we find that the idea of a laissez faire monetary policy was never very popular in the united states though it did have proponents whose work was often insightful most of the relevant literature was written in response to consequences wrought by the monetary legislation of the civil war that legislation included not only the national bank acts 1863 4 but also an ancillary measure effective 1866 placing a prohibitive tax on state bank notes these laws forced banks of issue to become national banks and thus to buy federal bonds as collateral for their notes which had the intended effect of creating an extra demand for the federal government s wartime debt in addition congress authorized the issue of legal tender greenback currency by the treasury a frequent theme in the post bellum monetary literature was the alleged deficiency or inelasticity of the currency supply some the greenbackers and silverites wanted the government to increase its contributions to the money supply others especially toward the end of the century argued for the establishment of a centralized agency with special powers of note issue a handful of writers renewed the radical jacksonians campaign for laissez faire in money and banking 3 in their view the defects of existing arrangements could best be solved by deregulation of banking and by removal of the federal government from the business of supplying money

the development and use of machine tools in historical perspective abstract improvements and diffusion of machine tools have had a major impact on productivity in manufacturing industry since the industrial revolution the impact has been both direct and indirect the direct impact consists of rising labor productivity through the use of faster more accurate more mechanized machines and of the higher capital productivity through higher operating rates greater reliability and higher utilization rates the indirect impact arises as the use of new or improved machine tools has necessitated or facilitated organizational changes affecting both labor capital raw materials and energy the magnitude of these impacts has varied over the years with the areas of application as new production methods have made possible entirely new products or lowered the cost of existing products sufficiently to create new markets the first part of the paper contains a review of the historical development of machine tool technology since the industrial revolution paying particular attention to the role of interaction between producers and users of machine tools the second part focuses on the way in which recent development differs from that in earlier periods in particular it is found that the major changes in machine tool technology from the so called american system of manufactures in the early 19th century to the development of detroit automation in the 1950s have tended to improve mass production methods by contrast the development of numerical control beginning in 1948 has opened up the possibility of extending industrial production methods and automation to areas previously characterized more by handicraft methods even though this technology is not yet fully utilized it is clear that the economics of industrial production has been revolutionized by the cost reduction of small scale production relative to large scale and the degree of flexibility offered by the technology the third section of the paper deals with the present development trends particularly discussing the increasing importance of flexibility and the shifting emphasis from development of individual pieces of machinery to integration and control of entire manufacturing processes i a through the use of industrial robots the reasons for the need for greater flexibility in manufacturing are also identified

some evidence of regional variations in the introduction and diffusion of industrial products and processes within british manufacturing industry thwaites a t 1982 some evidence of regional variations in the introduction and diffusion of industrial products and processes within british manufacturing industry reg studies 16 371 81 in the present economic circumstances the traditional instruments of regional aid public expenditure job transfer and mobile industry are greatly constrained which thrusts greater responsibility upon industry indigenous to each area to preserve and to create employment self sustained economic growth any concept of the mobilization of this regional potential must incorporate a technological dimension if any region lags in the production or adoption of new technology within its manufacturing industries then in the longer term it must face industrial decline evidence of regional performance in the production and adoption of new products and processes together with research and development effort is provided from two establishment based surveys of manufacturing industry in great britain the conclusion is reached

interpreting new evidence about china and u s silver purchases abstract this paper offers a reinterpretation of the influence on china of america s silver policy in the early 1930 s recently compiled evidence about events in china are described and interpreted in light of a model of free banking under a commodity standard our interpretation is that the u s silver purchase program did not set off a chain of bad economic events which eventually forced china off silver and onto a fiat standard rather china was forced off silver by its own government which wanted to make itself the beneficiary of the capital gain associated with the appreciation of silver and to relieve itself of the restrictions that are imposed on government finance by a commodity standard

technological regimes and innovation in services the case of the italian banking industry abstract in this paper we propose a conceptual model to analyse innovations originating from the diffusion of information technologies in the banking sector we argue that technical change in this industry exhibits a revolutionary character a distinction is made between the mass automation regime focusing mainly on the mechanization of back office procedures in the 1960s and 1970s and the smart automation regime originating from the introduction of distributed data processing and network technologies and centered around the supply of electronic banking services a theoretical model is developed which emphasizes the crucial role played by demand pull variables in stimulating innovative behaviour under the smart automation regime in contrast limited importance is attributed to cumulative and learning by doing effects relating to back office automation at least for banks endowed with sufficient absorptive capacity the theoretical hypotheses are tested through an econometric analysis of the determinants of the innovative behaviour in electronic payment systems of a sample of italian commercial banks

the characteristics of a monetary economy a keynes schumpeter approach mainstream monetary theory considers money only as an instrument meant to facilitate trading without having any effect on income or on the evolution of the economic system the aim of this paper is to elaborate a monetary theory capable of supporting the thesis of money non neutrality based on the arguments developed by keynes and schumpeter the synthesis of the theories of these two great economists will be formulated starting from the two points which are common in the views of keynes and schumpeter first in contrast with mainstream theory keynes and schumpeter state that the diffusion of a fiat money induces a radical modification into the way in which the economic system works second when keynes and schumpeter describe the reasons why money and financial aggregates are not neutral they highlight the fundamental role of the credit market and of banks in contrast with the mainstream theory they do not consider the credit market as the mirror image of the goods market

milton friedman s monetary economics and the quantity theory tradition abstract this article provides a selective review of milton friedman s contributions to monetary economics focusing on five areas in particular the demand for money the joint historical and empirical work with anna j schwartz the theoretical and empirical analyses of the phillips curve monetary policy and monetary dynamics

financial structure and aggregate economic activity an overview this paper surveys literature that explores the possible links between the financial system and aggregate economic behavior the survey is in two parts the first reviews the traditional work and the second discusses new research copyright 1988 by ohio state university press

private production of scrip money in the isolated community this paper examines the appearance of one type of privately produced currency which had the generic label scrip this money appeared at widely different times and places in the united states between 1820 and 1940 in spite of federal laws prohibiting its issue the most sophistic ated and best developed example of scrip seems to have occurred in th e coal mining regions of appalachia especially in west virginia thi s experience and its implications for monetary behavior are examined here copyright 1987 by ohio state university press

the adoption of new technology in the american machinery industry rees j briggs r and oakey r 1984 the adoption of new technology in the american machinery industry reg studies 18 489 504 this study examines the spread of a number of key production technologies among machinery manufacturers across the united states based on a mail and interview survey of over 600 industrial plants across the country it was found that adoption rates for these innovations varied by industrial sector organizational status of plants age and size of plants as well as by region and metropolitan characteristics of plants the findings suggest that policy makers interested in nurturing small businesses should consider technical assistance strategies that encourage the spread of innovation among firms and that high priority be given to labour training programmes in local economic development strategies at the federal level this study also suggests that the innovation potential of manufacturing belt companies should not be overlooked in any new initiatives to encourage economic re

on the diffusion of new technology a game theoretic approach this paper is an attempt at a rigorous albeit not exceedingly general analysis of the diffusion of new technology in particular consider an industry composed of two firms each using the current best practice technology the firms are assumed to be operating at nash equilibrium output levels generating a market price given demand and profit allocations when a cost reducing innovation is announced each firm must determine when if ever to adopt it based in part upon the discounted cost of implementing the new technology and in part upon the behavior of the rival firm if either firm adopts before the other it can expect to make substantial profits at the expense of the other firm on the other hand the discounted sum of purchase price and adjustment costs may decline with the lengthening of the adjustment period as various quasi fixed factors become more easily variable therefore although waiting costs the firm more in terms of foregone profits it may save money on the cost of purchasing the new technology thus the firm must weigh the costs and benefits of delaying adoption as well as take account of its rival s strategic behavior

the resource cost of irredeemable paper money since 1971 no major currency has a formal link to a commodity for the first time in history every currency is wholly irredeemable not as a temporary expedient but as a permanent matter monetary economists have generally treated irredeemable paper money as involving negligible real resource costs compared with a commodity currency to judge from recent experience that view is clearly false as a result of the decline in long term price predictability a key question for the future is what if any substitute for a commodity standard will emerge as a long term anchor for the price level

firm size and the adoption of flexible automation data on the diffusion of flexible automation systems in the italian metalworking industry are used to point out the role of size for the adoption of complex systemic innovations plant and firm sizes turn out to be positively correlated to adoption rates moreover adoption is more likely ceteris paribus in plants which are part of large industrial groups this pattern applies in general and is particularly remarkable for more advanced solutions in this light guidelines for industrial policies that focus on financial support the diffusion of industrial standards and the correction of asymmetries in the availability of know how and skills are proposed

the transition from barter to fiat money how did it become possible to exchange apparently valueless pieces of paper for goods this paper provides an equilibrium account of the transition between barter and fiat money regimes the explanation relies on the intervention of a self interested government that must be able to promise credibly to limit the issue of money to achieve credibility the government must offset the benefits of seigniorage by internalizing some of the macroeconomic externalities generated by the issue of fiat money the government s patience and the extent of its involvement in the economy are key determinants of whether the transition can be accomplished copyright 1995 by american economic association

firm location and city size reduced productivity advantages as a factor in the decline of manufacturing in urban areas abstract this paper develops a model of firm location and city size that arrives at theoretical conclusions that differ from those of other authors comparative statics results suggest that changes in national wage levels and productivity levels create no determinate dis advantage for large cities relative to small ones as sites for manufacturing activity increased wage and reduced productivity premiums of large cities however result in unambiguous disadvantages statistical analysis indicates that the productivity advantages of large cities have declined in as many as eight two digit manufacturing industries that provide more than one third of metropolitan production worker employment

analyzing literature based innovation output indicators the italian experience abstract this paper presents the results of a study on the product innovations introduced in the italian market in 1989 and reported in a selected number of trade journals the analysis of data collected by means of this literature based counting procedure confirms that r d oriented industries and large firms do not in italy have a marked competitive advantage in innovation the country appears to be instead characterized by a significant presence of consumer goods industries and small firms in innovation our data indicate a statistically significant association between trade competitiveness and strength in product innovation and show the comparatively higher capacity for product innovation of some of the industries in which italy achieves a positive performance in international trade moreover the presence of spillovers at the regional level from both private and public r d expenditures proves to be positively correlated with the development of product innovations finally small firms with fewer than 50 employees appear to be more innovative than is usually believed to be the case

firm size and technical change in a dynamic context this article investigates relationship between firm size and technical change the relationship between firm size and technical change has long been a pre occupation in the literature preceding the flurry of macroeconomic studies which followed the discovery of the residual factor by solow dennison and others although this concern goes back at least to the writings of marx it was schumpeter who first emphasized the relationship between firm size and technical change for some years the assertion of schumpeter s was widely accepted but then a number of detailed empirical studies were undertaken resting on 1950s data these began to suggest that beyond a certain size inventive activity rose less than proportionately with bigness by contrast rothwell and zegveld assembled a variety of country studies some of which suggest that small and medium sized firms are relatively invention and innovation intensive in some sectors and in some countries the purpose of this paper is to argue by illustration with a single sector computer aided design cad that the above mentioned studies reach their varying conclusions in a largely static framework thus whilst there is always a tendency towards concentration in capitalism the relationship between firm size and technical change is a dynamic one ensuring that static generalisations at any single point of time are not very helpful the article is divided into sections by section iii describes the market structure in the cad sector and analyse how this has changed over the past decade section iv analyses the nature of the barriers to entry in this sector and illustrate how these are typical of other emerging software intensive microelectronic based sectors finally section v is a return discussion on the relationship between firm size and inventive activity

rural industrialisation in denmark and the role of public policy during the 1970s and 1980s major relocation of danish industry took place to both rural and peripheral areas in denmark and the causes of this are examined the paper looks at the role of public policy in this process both explicitly regional policy and also economic and social policy having differing regional effects a marked change in the nature of policy in the mid 1980s is identified moving from a cost support policy to a more offensive innovatory policy however the conclusion remains that public policy is not a major cause of the new locational trends

the evolution of monetary policy rules abstract this article examines the evolutionary forces involved in the development of monetary policy rules over time considering in particular how these relate to proposals made by milton friedman and walter bagehot the lines between money and credit and between monetary and fiscal policy are given special focus