the global financial crisis explaining cross country differences in the output impact abstract what explains differences in the crisis impact across developing countries and emerging markets using cross country regressions to assess the factors driving the growth performance in 2009 compared to pre crisis forecasts for that year we find that a small set of variables explain a large share of the variation in the growth impact countries with more leveraged domestic financial systems stronger credit growth and more short term debt tended to suffer a larger effect on economic activity although the relative importance of these factors differs across country groups for emerging markets this financial channel trumps the trade channel for a broader set of developing countries however the trade channel seems to have mattered with more open countries affected more strongly and those exporting food commodities being less hard hit exchange rate flexibility helped in buffering the impact of the shock particularly for emerging markets there is also some evidence that countries with a stronger fiscal position prior to the crisis were impacted less severely we find little evidence for the importance of other policy variables

the design of the university system abstract this paper compares the organisation of the university sector under unregulated private provision with the structure which would be chosen by a welfare maximising government it studies a general equilibrium model where students attend university to earn higher incomes in the labour market and universities teach them and carry out research each university chooses its tuition fee to maximise the amount of resources it can devote to research research bestows an externality on society government intervention needs to balance labour market efficiency considerations which would tend to equalise the number of students attending each university with considerations of efficiency on the production side which suggest that the most productive universities should teach more students and carry out more research we find that government concentrates research more that the private market would but less than it would like to do if it had perfect information about the productivity of universities it also allows fewer universities than would operate in a private system

real rigidities and the non neutrality of money rigidities in real prices are not sufficient to create rigidities in nominal prices and real effects of nominal shocks and by themselves small frictions in nominal adjustment such as costs of changing prices create only small non neutralities but this paper shows that substantial nominal rigidity can arise from a combination of real rigidities and small nominal frictions the paper shows the connection between real and nominal rigidity given the presence of nominal frictions both in general and for two specific sources of real rigidity one arising from goods market imperfections and the other from labour market imperfections

the analytics of the pricing of higher education and other services in which the customers are inputs many services provide outputs that depend partially on the customers as inputs the presence of other customers often contributes to the output experienced by each purchaser higher education is the premier example others are legion we provide a simple model that addresses the questions of competitive pricing and allocative efficiency for these types of services prices that charge customers for what they get on net output minus input from the firm both are competitive and support efficient allocations these prices internalize the apparent external effects of customers on each other few examples of such prices exist in the real world

amalgamations of universities are there economics of scale or scope this paper estimates a multiple output cost function for australian universities the estimates are used to evaluate the cost savings arising from the amalgamation of two or more institutions thes

analytical approximations in models of hysteresis decisions made under ongoing uncertainty and costly reversibility entail a range of the state variable where inaction is optimal which in turn produces hysteresis permanent effects of temporary shifts the range is usually defined by non linear equations that need numerical solutions in this paper a technique of analytical approximations is developed and applied to two models menu costs and investment the resulting explicit solutions help clarify why hysteresis is important even for small irreversibility in the menu cost model hysteresis is two orders of magnitude larger than under the akerlof yellen or mankiw assumptions when decisions that are costly to reverse are made under conditions of ongoing uncertainty the optimum policy usually entails a range of inertia the action should be taken only when the value of the underlying state variable becomes especially favourable and reversed only when it becomes especially unfavourable there is an intermediate range over which inaction is optimal this in turn gives rise to hysteresis starting from a value in the range of inertia if the state variable crosses the action trigger point and then returns to its original level the action will be taken but not reversed thus a temporary change will leave a permanent effect numerical solutions for models of irreversible investment show that the range of inaction is remarkably large even when the cost of reversal is small see brennan and schwartz 1985 constantinides 1986 and dixit 1989a b for examples of this unfortunately the equations tlhat determine the optimum policy are highly non linear they do not have analytical solutions therefore we lack a clearer and more general understanding of why hysteresis is numerically so important in this paper i derive analytical approximations for the solutions of more general problems of this kind when the costs of change are small the idea that small costs of change induce large amounts of inertia has been popularized in the model of akerlof and yellen 1985 mankiw 1985 and others in these models second order small costs of making price changes yield price stickiness in response to first order changes in the money supply this is a simple application of the envelope theorem but these models are static and their application to a dynamic reality must assume either permanent shocks or static expectations when there is ongoing uncertainty which is rationally expected by the decision maker the option value of the status quo enlarges the zone where inaction is optimal adding these features to the mankiw akerlof yellen may model i show that fourth order small costs of change generate first order inertia

competition between private and public schools vouchers and peer group effects a theoretical and computational model with tax financed tuition free public schools and competitive tuition financed private schools is developed students differ by ability and income achievement depends on own ability and on peers abilities equilibrium has a strict hierarchy of school qualities and two dimensional student sorting with stratification by ability and income in private schools high ability low income students receive tuition discounts while low ability high income students pay tuition premia tuition vouchers increase the relative size of the private sector and the extent of student sorting and benefit high ability students relative to low ability students

skilled immigration and innovation evidence from enrolment fluctuations in us doctoral programmes we study the contribution of foreign science and engineering talent to the creation of new knowledge in the u s economy using panel data on 2300 science and engineering s e departments at 100 large american universities from 1973 to 1998 we use macroeconomic shocks and policy changes in source countries that differentially affect enrollments across fields and universities to isolate exogenous variation in the supply of students at specific departments both foreign and domestic graduate students are central inputs into knowledge creation and the marginal foreign student contributes more to the production of scientific publications and citations a 10 decrease in the foreign share of doctoral students lowers s e research output at u s universities by 5 6 a theoretical model of university admissions and scholarships helps us infer the productivity effects of student quality and econometric results indicate that any visa restrictions limiting entry of highquality foreign students is most costly for u s innovation increased diversity appears to be the primary mechanism by which foreign students improve research outcomes the impact of more restrictive immigration policies depends on how they affect the quality margin and diversity of incoming foreigners

the cost structure of american research universities 1597 this study estimates translog variable cost functions for 147 american doctorate granting universities accounting for three major products of these institutions undergraduate and graduate instruction and research explicit measures of research output and quality are employed evidence is found for considerable economies of scale for the average institution as well as economies of scope related to the joint production of undergraduate and graduate instruction the public or private ownership of an institution is not significant for the explanation of variable costs the intensity of state regulation in the public sector does not have a significant impact on production efficiency copyright 1991 by mit press

institutions of higher education as multi product firms economies of scale and scope a multiple output cost function is estimated for institutions of higher education in the united states employing data for 1981 82 the authors flexible fixed cost quadratic function includes three outputs undergraduate teaching graduate teaching and research grants and one input price average faculty salaries results indicate the existence of scope economies at least up to a point for both public and private institutions of higher education ray economies of scale are more pronounced in the private sector and product specific economies of scale are observed only in the public sector for research and graduate teaching copyright 1989 by mit press

economics of academic research and its implications for higher education the principal output of the highereducation system is knowledge the system generates two kinds of knowledge a disembodied form which appears as information in journals and books and an embod ied form in the grey matter of its graduates these outputs are produced by the activities of research and teaching respectively moreover many of the resources used to produce these outputs are used for both albeit in somewhat different proportions this applies to buildings office space laboratories computer rooms libraries etc staff academic and support staff and equipment computers ex perimental machines measuring instruments etc other resources are more specialized devoted ei ther to research alone research assistants or to teaching lecture rooms finally to function at all all higher educational institutions have to provide a range of central services such as maintaining finan cial staff and student records building mainte nance and repairs catering facilities and so on

economies of diversification a generalization and decomposition of economies of scope abstract the paper investigates the benefits of diversification for a multi product firm it examines economies of diversification reflecting the cost reduction associated with producing outputs in an integrated firm compared to specialized firms the analysis applies under complete specialization as well as partial specialization when firms are not fully specialized and or when the specialization scheme does not cover all outputs it decomposes economies of diversification into four additive parts a part measuring complementarity among outputs a part reflecting economies of scale a part reflecting convexity and a part reflecting the role of fixed cost this new decomposition appears useful in investigating how scale effects complementarity effects and convexity effects can contribute to economies of scope in a multiproduct firm and helps generate valuable insights into the economics of specialization for multiproduct firms

does inequality lead to credit growth testing the rajan hypothesis using state level data this paper uses state level data to test the rajan hypothesis from his book fault lines that an increase in inequality can lead to a credit boom using dynamic heterogeneous panel estimation methods i e mg pmg dfe we find a significant positive long run relationship between inequality and real estate lending across u s states

does human capital matter for growth in oecd countries a pooled mean group approach abstract unlike previous panel data studies using an improved dataset and pmg estimators we find a significant impact of human capital on growth the estimated long run elasticity of output to human capital is consistent with the microeconomic evidence on returns to schooling

inequality credit and financial crises in the three decades leading up to the financial crisis of 2008 09 income inequality rose across much of the developed world this has led to a vigorous debate as to whether widening inequality was somehow to blame for the crisis by driving private sector credit booms despite growing interest empirical evidence on an inequality fragility relationship is limited based on a panel analysis of 18 oecd organisation for economic co operation and development countries for the years 1970 2007 this study provides evidence of a positive relationship between income concentration and private sector indebtedness once other traditional drivers are controlled for if confirmed the implications of this result are as follows i the view that the distribution of income is irrelevant to macroeconomic stability as implicit in mainstream approaches needs further investigation and ii in order to make the financial system more robust policy makers should cast the net wider than monetary policy and regulatory reforms and consider the effects of changes to distributive patterns

the design of optimal education policies this paper studies the education policy chosen by a utilitarian government in the model households differ in their income and in their children s ability income is observed by the government but ability is private information households can use private education but cannot borrow to finance it the government can finance education with income tax but at the cost of blunting the individuals incentive to exert labour market effort the optimal education policy we derive is elitist it increases the spread between the educational achievement of the bright and the less bright individuals compared to private provision it is also such that the education received by less bright individuals depends positively on their parental income finally the optimal education policy is input regressive in the sense of arrow 1971 quarterly journal of economics 38 175 208 households with higher income and brighter children contribute less in tuition fees towards the cost of the education system than households with lower income and less bright children

higher education costs and scale and scope economies higher education multi product cost functions are estimated for the public and private sectors disaggregated by research comprehensive baccalaureate and associate level institutions the output mix incorporates professional school teaching output in addition to undergraduate and graduate teaching and research outputs scale and scope economies are examined by sector and institutional level also accounting for regional differences ray economies are found throughout the private sector but confined to lower level public institutions research economies are widespread throughout all sector levels economies of scope prevail among private institutions across levels but only among comprehensive and baccalaureate public colleges

variable price adjustment costs i introduction costly price adjustment models often called menu cost models see mankiw 1985 are based on the assumption that nominal price changes in product markets are costly with aggregate inflation the optimal pricing policies are state contingent the firm lets its real price drift until it reaches a threshold the nominal price is then changed so as to make the new real price equal to a target value the simplest case is the one sided s s policy studied by sheshinski and weiss 1977 the real price is increased to s after it has been eroded by inflation to s 1 nominal prices are held constant for extended periods of time as is apparent to anyone with eyesight rotemberg 1987 as the timing of price changes is chosen optimally the optimal policies dominate time contingent policies 2 not surprisingly the models have been adopted in the new keynesian literature as a microfoundation for nominal rigidities along with monopolistic competition and coordination failures they have entered the mainstream of that literature 3 given their importance for the new keynesian approach costly price adjustment models require closer scrutiny there are two basic problems first it is not clear what the costs of price adjustment are second there is empirical evidence inconsistent with the standard fixed cost model 4 1 more complex policies are studied by barro 1972 tsiddon 1988 caplin and leahy 1991 and dixit 1991 2 see discussions in blanchard and fischer 1990 and caplin and leahy 1991 a notable exception are time inconsistent problems which may arise in long term contracts 3 rotemberg 1987 ball mankiw and romer 1988 blanchard 1990 and gordon 1990 review macroeconomic applications textbook expositions are in blanchard and fischer 1990 mccafferty 1990 abel and bernanke 1992 and mankiw 1992 4 another issue is how a smooth aggregate price level results from lumpy individual adjustments on this see caplin and spulber 1987 and caballero and engel 1991 the costs of price changes are of two basic types first are the costs of market response customers switching competitors pricing more aggressively etc second are the costs of changing the menu deciding on the new price changing labels informing salesmen and customers etc in existing literature the costs are assumed to be fixed which suggests that they are of the latter type 5 the main criticism of this approach is that as menu costs are small the results are unlikely to be empirically relevant or economically significant mccallum 1989 summarizes this argument in response akerlof and yellen 1985 and mankiw 1985 argued that as the profit function is flat around its maximum profits are not responsive to changes in the real price thus even small costs may result in infrequent price changes empirical evidence supports neither the criticism nor the response the observed frequency of price changes is often too low and real price variations are too large to be generated by a small menu cost for example cecchetti 1986 finds that a typical u s weekly magazine would change its nominal price once every four to six years allowing the real price to deteriorate by about 25 percent results for monopolistic newspapers in canada studied by fisher and konieczny 1992 are similar the average price increase for the twenty six products in israel studied by lach and tsiddon 1992 was 12 percent when the monthly inflation rate was 7 3 percent also in kashyap 1990 price changes vary greatly in size across products sold in the same catalog even though presumably the menu cost is similar with respect to the second problem fixed cost models imply that the size of adjustment rises with inflation the real price is allowed to be eroded more and is reset to a higher value yet in lach and tsiddon 1992 this holds for only sixteen out of twenty six products adjustments become smaller for eight and there is no effect in two cases

the new keynesian economics preface 1 from keynesian to new keynesian economics 2 keynesian microfoundations in historical perspectives part i real rigidities 3 the labour market and real wage rigiditry 4 credit rationing and imperfect capital markets 5 real rigidities in the goods market part ii nominal rigidities introduction 6 rational models of irrational behaviour 7 price setting with adjustment cost 8 real and nominal price rigidity further issues part iii coordination failures and hysteresis 9 coordination failures 10 hysteresis conclusions

capital accumulation and growth a new look at the empirical evidence using annual data for 75 countries in the period 1960 2000 we present evidence of a positive relationship between investment as a share of gross domestic product gdp and the long run growth rate of gdp per worker this result is robust for our full sample and for the subsample of non oecd countries but not for the subsample of oecd countries our analysis controls for time invariant country specific heterogeneity in growth rates and for a range of time varying control variables we also address endogeneity issues and allow for heterogeneity across countries in model parameters and for cross section dependence

subsidies hierarchy and peers the awkward economics of higher education higher education is a business it produces and sells educational services to customers for a price and it buys inputs with which to make that product production is subject to technological constraints costs and revenues discipline decisions and determine the long run viability of a college or university but higher education is not just a business while that statement is often meant to imply that higher education is nobler than business more decent and humane in the purposes it serves it can also mean that even in economic terms higher education is in important ways simply different from a business this paper asks how well our extensive experience with commercial businesses and the microeconomic theory of firms and markets that has evolved to describe them helps in understanding the economics of higher education that experience and those insights will be used by trustees politicians administrators lawyers reporters and the public as well as by economists to understand and evaluate the behavior of colleges and universities so it is useful to ask how safe it is to use the economic analogy in the context of higher education drawing parallels between universities and firms students and customers faculty and labor markets and so on the discussion here seeks to identify the key economic features of higher education that make it different from familiar for profit industries and to ask what difference those differences make this is a stick that can be picked up from either end one approach is to start with meticulous economic theory and see how far it can be made to encompass the economic realities of higher education an excellent recent paper by rothschild and white 1995 does that in their matching model students and colleges meet

modelling the determination of research output in british universities abstract the paper begins by noting some of the recent proposals for restructuring research activity in british universities mainly through a process of concentration of research resources we then review the available evidence which shows that there is little support for such concentration except in the most resource intensive disciplines since there is little firm information about the shape of research production functions either for institutions or for the system as a whole the core of the paper studies the factors likely to be important in such functions and investigates the consequences of particular functional forms finally it is concluded that more research is needed to gain a better understanding of the research process in universities and that in the meantime it would be unwise to embark on a wholesale restructuring of the system

efficient tuition fees and examinations we assume that students observe only a private noisy signal of their ability and that universities can condition admission decisions on the results of noisy tests if the university observes a private signal of each student s ability which is soft information then asymmetries of information are two sided and the optimal admission policy involves a mix of pricing and pre entry selection based on the university s private information in contrast if all test results are public knowledge then there is no sorting on the basis of test scores tuition alone does the job of implementing an optimal degree of student self selection these results do not depend on the existence of peer effects the optimal tuition follows a classic marginal social cost pricing rule jel d82 h42 i22 j24

cross country experiences and policy implications from the global financial crisis the financial crisis of 2007 2008 is rooted in a number of factors some common to previous financial crises others new analysis of post crisis macroeconomic and financial sector performance for 58 advanced countries and emerging markets shows a differential impact of old and new factors factors common to other crises like asset price bubbles and current account deficits help to explain cross country differences in the severity of real economic impacts new factors such as increased financial integration and dependence on wholesale funding help to account for the amplification and global spread of the financial crisis our findings point to vulnerabilities to be monitored and areas of needed national and international reforms to reduce risk of future crises and cross border spillovers they also reinforce a sad state of knowledge much of how crises start and spread remains unknown stijn claessens giovanni dell ariccia deniz igan and luc laeven

unit costs some explanations of the differences between uk universities considerable interest is currently being shown in the funding of university education the uk university sector has suffered a series of major cuts in public funding since 1980 and these have been accompanied by demands for higher standards and increased efficiency policy statements issued during the present decade have frequently emphasized the need for methods of assessing the performance of universities the comparison of universities on the basis of their performance it is argued would lead to a more efficient use of resources the essentials of performance measurement in education are to introduce into considerations of policy and the management of the education system at national and institutional level some concrete information on the extent to which the benefits expected from education expenditure are actually secured and to facilitate comparisons in terms of effectiveness and efficiency as between various parts of the system and as between different points in time des 1987a p 49 variou

equilibrium and inefficiency in a community model with peer group effects public service output depends on input expenditures on own personal characteristics and on the characteristics of the other residents in the community the peer group effect in a community model with public expenditures set by voting with migration between communities and with land price differentials capitalization it is shown that communities may become heterogeneous in composition and second best inefficient this equilibrium occurs when the peer group effect is neither too strong nor too weak the inefficiency arises because an externality is created by migration the land price differential does not play the part of the price of the better peer group but of a transfer payment

efficiency in the provision of university teaching and research an empirical analysis of uk universities summary a flexible three output two input cost function model is used to examine the cost efficiency of uk universities as producers of teaching and research outputs unlike previous studies a comprehensive peer review of research quality is incorporated overall product specific and input specific economies of scale global and product specific economies of scope marginal costs and cost complementarities are estimated overall and product specific scale results indicate considerable increasing returns while the scope results generally suggest neither economies nor diseconomies sensitivity analysis is used to simulate the impact of current government policy regarding the expansion of undergraduate teaching output on these results

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

staggered price setting with endogenous frequency of adjustment abstract a model of staggered price setting in which the frequency of price changes is endogenous is presented

does inequality lead to a financial crisis abstract the recent global crisis has sparked interest in the relationship between income inequality credit booms and financial crises rajan 2010 and kumhof and ranciere 2011 propose that rising inequality led to a credit boom and eventually to a financial crisis in the us in the first decade of the 21st century as it did in the 1920s data from 14 advanced countries between 1920 and 2000 suggest these are not general relationships credit booms heighten the probability of a banking crisis but we find no evidence that a rise in top income shares leads to credit booms instead low interest rates and economic expansions are the only two robust determinants of credit booms in our data set anecdotal evidence from us experience in the 1920s and in the years up to 2007 and from other countries does not support the inequality credit crisis nexus rather it points back to a familiar boom bust pattern of declines in interest rates strong growth rising credit asset price booms and crises

state regulation and university behavior abstract the impact of state regulation on the economic behavior of american public research universities is studied using a unique sample of data on costs outputs and regulation measures for 98 institutions the university cost structure is modeled by a multiple output translog cost function explicitly allowing for the impact of state regulation regulating non faculty salary expenditures and the spending of non state revenues decreases costs while regulating faculty salary expenditures increases costs given the same output levels the results are interpreted in terms of the principal agent relationship of state regulators and universities efficiency gains and losses depend on the relative accuracy of state information on the production process

the impact of educational standards on the level and distribution of earnings the goal of this paper is to present the following finding an egalitarian policy maker might prefer higher standards than would a policy maker whose goal was to maximize the sum of earnings the result is based on the observation that if workers are differentiated with respect to ability an increase in educational standards will increase the earnings of both the most able and the least able workers the only workers whose earnings fall are those workers who after the increase fail to continue meeting the standard

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

predicting financial crises the statistical significance of the signals approach abstract the signals approach as an early warning system has been fairly successful in detecting crises but it has so far failed to gain popularity in the scientific community because it cannot distinguish between randomly achieved in sample fit and true predictive power to overcome this obstacle we test the null hypothesis of no correlation between indicators and crisis probability in three applications of the signals approach to different crisis types to that end we propose bootstraps specifically tailored to the characteristics of the respective datasets we find 1 that previous applications of the signals approach yield economically meaningful results 2 that composite indicators aggregating information contained in individual indicators add value to the signals approach and 3 that indicators which are found to be significant in sample usually perform similarly well out of sample

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

the effect of competition on the efficiency of secondary schools in england abstract in this paper we calculate the technical efficiencies based upon multiple outputs school exam performance and attendance rates of all secondary schools in england over the period 1993 1998 we then estimate models to examine the determinants of efficiency in a particular year and the determinants of the change in efficiency over the period our results suggest that the greater the degree of competition between schools the more efficient they are the strength of this effect has also increased over time which is consistent with the evolution of the quasi market in secondary education competition is also found to be an important determinant of the change in efficiency over time there is however some evidence of conditional convergence between schools

inflation and efficiency in search markets this paper examines how inflation affects efficiency and output in monopolistically competitive search markets it formalizes the conventional wisdom linking higher inflation price dispersion and increased resources devoted to search it also brings to light the induced exit of arms which reduces rent dissipation but the most important effect of inflation is how it alters the distribution of real transactions prices whether this reduces or promotes efficiency and output is shown to depend critically on preferences and market structure and especially on whether search costs are large or small relative to consumer surplus

education distributive justice and adverse selection we consider a model of education planning in an economy in which agents differ in their costs of acquiring education the agents cost parameter called talent is not observed the principal is endowed with a fixed sum of money with which two types of transfer can be made in cash and in kind the principal can finance transfers in kind called help by means of schooling expenditures which reduce the agent s education cost the principal seeks to maximize a social welfare function which is a ces index of utility levels we study the optimal allocation of individual education effort schooling expenditures help and cash under self selection and budget constraints assuming first that the set of types is finite and that help and effort are sufficiently substitutable we find that individual education investment levels are an increasing function and help is a decreasing function of talent utility levels cannot be equalized because of self selection constraints more aversion for inequality unequivocally leads to more inequality of educational achievements and to more assistance through redistribution this remains true in the limit under strictly egalitarian preferences of the principal the same qualitative properties hold in the general case of a continuum of types bunching at the lower end of the talent scale is a feature of the solution for sufficiently high degrees of inequality aversion

economies of scale and scope in flemish secondary schools this study estimates a multiproduct translog cost function for the entire population of 1011 flemish secondary schools in order to determine the degree of ray and product specific dis economies of scale as well as the degree of dis economies of scope three types of schools and seven major study fields can be distinguished student loads in these study fields are used as outputs produced by the schools evidence is found for ray economies of scale for the three types of schools even at output levels of 300 of the actual means although the cost elasticities of six out of seven outputs are close to zero most of the values indicating the degree of product specific economies of scale are negative suggesting diseconomies of scale however this can be explained by the considerable scope effects which are incorporated in the definition of the product specific economies of scale

economies of scale and scope and the economic efficiency of china s agricultural research system this article investigates economies of scale and scope and other potential sources of improvements in the economic efficiency of china s crop breeding an industry at the heart of the nation s food economy using data covering 46 wheatand maize breeding institutes from 1981 to 2000 we estimate cost functions for the production of new varieties at china s wheat and maize breeding institutes our results indicate strong economies of scale along with small to moderate economies of scope related to the joint production of new wheat and maize varieties cost efficiency increases significantly with increases in the breeders educational status and with increases in access to genetic materials from outside the institute

conceptual issues and the australian experience with income contingent charges for higher education it is opportune to esplore the conceptual basis of higher education contribution scheme examine its revenue and practical implications and ask if its institutionhas diminished the access of the disadvantaged to australia s higher education system this abstract was borrowed from another version of this item

human capital vs signalling explanations of wages increases wages by directly increasing the worker s productivity this learning explanation is usually associated with human capital theory however it seems unlikely that learning explains all the wage differences associated with schooling and work history better educated workers are not a random sample of workers they have lower propensities to quit or to be absent are less likely to smoke drink or use illicit drugs and are generally healthier it is unlikely that employers make full use of differences in propensities to quit or to be absent or sick when hiring workers these characteristics are often not directly observed and the americans with disabilities act precludes firms from using either poor health or the likelihood of future sickness as a hiring criterion unless it is directly related to job performance however if low levels of education are associated with these unfavorable employee characteristics and employers are allowed to take education into account when hiring workers we would expect employers to favor better educated workers as a means of reducing their costs of sickness and job turnover in turn students will take these hiring criteria into account when deciding how long to stay in school students will choose a length of schooling to signal their ability to employers and employers will demand a minimum level of schooling

redistribution and education subsidies are siamese twins abstract we develop models of optimal linear and non linear income taxation with endogenous human capital formation to explore optimal education subsidies optimal subsidies on education ensure efficiency in human capital accumulation and thus play an important role in alleviating the tax distortions on learning induced by redistributive policies if the government cannot verify all investments in human capital education policy offsets some but not all tax induced distortions on learning non pecuniary educational costs benefits may increase decrease subsidies on education especially if they are complementary to work effort

menu costs entry deterrence and nominal rigidity this paper studies in a model of entry deterrence conditions under which a small cost of changing nominal prices combined with a real rigidity leads to a large nominal rigidity the entry deterrence environment which generates the real rigidity provides an appealing explanation as to why firms sometimes react to shocks by changing output instead of prices as in ball and romer 1990 a large nominal rigidity arises with some parameter values it is not however monotonically increasing as real prices become more rigid the paper studies in a model of entry deterrence conditions under which a small cost of changing nominal prices combined with a real rigidity leads to a large nominal rigidity the entry deterrence environment which generates the real rigidity provides an appealing explanation as to why firms sometimes react to shocks by changing output instead of prices as in ball and romer 1990 a large nominal rigidity arises with some parameter values it is not however monotonically increasing as real prices become more rigid

the impact of degree programmes on university expenditure this research examines the impact of the number and mix of academic degree programmes on university operating expenditure in the united states statistical results are based on data for doctoral and research institutions without medical schools after controlling for other factors influencing expenditure additional degree programmes are associated with significant increases in expenditure with doctoral programmes having a 40 higher marginal impact on total expenditure than baccalaureate programmes most institutions are found to be smaller than the expenditure minimizing size and to have higher expenditure per full time equivalent student as specified the models explain a large amount of the variation in expenditure across the institutions

peer group effects and educational attainment abstract given the aims of an educational system the relationship between educational inputs and educational outputs the educational production function a frequency distribution of students by ability and a fixed educational budget how should students and educational expenditures be allocated over classrooms the paper focuses on peer group effects which capture the influence of a student s classmates on his educational attainment and the determinants of whether streaming or mixing is preferable it should be noted that peer group effects arise in other contexts notably in the workplace thus the paper casts some light on the optimal composition of teams

a simple model of educational standards the author models standards for educational credentials such as high school diplomas standard setters maximize their conception of social welfare knowing that utility maximizing students choose whether to meet the standard the author shows that more egalitarian policymakers set lower standards the median voter would prefer higher standards under symmetric distributions and decentralization lowers standards among identical communities optimal standards do not necessarily fall with increased student preference for leisure deterioration of nonstudent inputs to education or increased student heterogeneity superseding binary credentials by perfect information increases average achievement and social welfare for plausible degrees of heterogeneity egalitarianism and pooling under decentralization

optimal price dynamics and speculation with a storable good this paper analyzes as a dynamic game the optimal price and storage strategies of respectively a the seller of a storable good who must keep pace with inflation but incurs a cost to changing his price b his customers who speculate on the timing of price adjustments to buy and store just before a unique markov perfect equilibrium is shown to exist and is fully characterized rt generally involves a phase of mixed strategies during which the seller tries to deter speculation by injecting uncertainty into its price dynamics while speculators store in increasing numbers with possibly a final run on the good the stochastic price policies of a large number of such firms are shown to aggregate back to a price index growing at the rate of general inflation in response to which they arose the model thus establishes that a a constant rate of aggregate inflation can at the same time generate and cover up significant uncertainty and social costs at the microeconomic level b speculation can be destabilizing and socially wasteful even in the absence of shocks and imperfect information most importantly they provide a theoretical foundation for the frequently encountered claim that inflation causes price uncertainty