minimum effort coordination games stochastic potential and logit equilibrium abstract this paper revisits the minimum effort coordination game with a continuum of pareto ranked nash equilibria noise is introduced via a logit probabilistic choice function the resulting logit equilibrium distribution of decisions is unique and maximizes a stochastic potential function in the limit as the noise vanishes the distribution converges to an outcome that is analogous to the risk dominant outcome for 2 2 games in accordance with experimental evidence logit equilibrium efforts decrease with increases in effort costs and the number of players even though these parameters do not affect the nash equilibria journal of economic literature classification numbers c72 c92

a nonparametric cost approach to scale efficiency starting with farrell fieldhouse 1962 a host of notiparametric models have been developed for calculation of scale efficiency a common property of these models is that they are specified in terms of input output data duality theory has taught us that technological characteristics may be analyzed from either the primal or the dual cost side the purpose of this paper is to introduce a nonparametric dual method of calculating scale efficiency

multinational operation ownership and efficiency differences in the international oil industry abstract although state involvement in market systems often leads to inefficiency this influence in the oil industry is not dwindling due to strong growth of some state oil companies based on this background there are concerns about how state firms can continue to stay relevant in the international oil industry by offsetting inefficiencies due to state control this study assesses the effects of multinational operations on the performance of oil firms this is achieved by comparing productive and scale efficiencies of state and private oil companies as well as state multinationals and private multinationals a dataset of 50 firms each year from 2001 to 2010 reveals that although multinational operation is important in reducing productive inefficiencies of state firms it does not mitigate scale inefficiencies of state owned firms state firms should therefore make multinational operations a key policy direction since this will provide a transformative agenda towards equally competing with their private counterparts however better efforts need to be paid in reducing scale inefficiencies that are pervasive among state owned oil firms providing better controls on firm size will provide better drive towards future efficient production levels

modelling money demand in open economies over the modern floating rate period the role of open economy factors in influencing domestic money demand in major industrial countries over the modern floating rate period is examined the theoretial model for the empirical analysis is derived from a general two country portfolio balance framework that determines the demand for domestic and foreign monetary and non monetary assets in each country the ecm estimates indicate that capital mobility plays an important role in the money demand function in all seven counteries considered currency substitution in contrast is not an important phenomenon

caps on political lobbying the cost of political campaigns in the u s has risen substantially in recent years for example real spending on congressional election campaigns doubled between 1976 and 1992 steven d levitt 1995 there are many reasons why increased campaign spending might be socially harmful first increased spending means increased fund raising which may keep politicians from their legislative duties 1 second a lobbyist who makes a large campaign contribution may have undue influence on electoral outcomes on the shaping of legislation or on the outcome of regulatory proceedings 2 that is the socially preferred candidate or legislation may not prevail likewise a lobbyist involved in a regulatory matter or a competition for a government contract may benefit unduly from a legislator s intervention 3 third a perception that campaign contributions purchase influence may lead to increased tolerance of corruption in the private sector a desire to control campaign spending has spawned many initiatives to limit both campaign contributions and spending beginning with the passage of the federal election campaign act feca political action committees pacs can contribute at most 5 000 per election to a candidate while individuals can contribute at most 1 000 restrictions have also been put on in kind contributions making it more difficult to circumvent these limits 4 while direct restrictions on campaign spending have proven difficult to implement recent initiatives aim to impose voluntary spending limits and stricter limits on contributions 5 despite the existing legislation and the proposals to limit contributions little is known about the impact of contribution limits on aggregate expenditures while it is intuitively appealing that aggregate expenditures would drop we challenge that intuition here we study a lobbying game and show that a cap on individual lobbyists expenditures may have the perverse effect of increasing aggregate expenditures and loweri this abstract was borrowed from another version of this item

governments as owners state owned multinational companies the globalization of state owned multinational companies somncs has become an important phenomenon in international business ib yet it has received scant attention in the literature we explain how the analysis of somncs can help advance the literature by extending our understanding of state owned firms soes and multinational companies mncs in at least two ways first we cross fertilize the ib and soes literatures in their analysis of foreign investment behavior and introduce two arguments the extraterritoriality argument which helps explain how the mnc dimension of somncs extends the soe literature and the non business internationalization argument which helps explain how the soe dimension of somncs extends the mnc literature second we analyze how the study of somncs can help develop new insights of theories of firm behavior in this respect we introduce five arguments the triple agency conflict argument in agency theory the owner risk argument in transaction costs economics the advantage and disadvantage of ownership argument in the resource based view rbv the power escape argument in resource dependence theory and the illegitimate ownership argument in neo institutional theory after our analysis we introduce the papers in the special issue that collectively reflect diverse and sophisticated research interest in the topic of somncs

analysis of productivity efficiency and technological changes in hospital services in ontario how does case mix matter abstract in this paper we compare productivity efficiency and technological changes with and without case mix as output categories using panel data on ontario hospitals for the period 2002 2006 we use the malmquist productivity index mpi data envelopment analysis dea and non parametric density estimation and related statistical tests we also decompose mpi into efficiency change ech and technological change tch we found that productivity efficiency and technological changes were significantly different between two alternative models with case mix as a weighting device model 2 and without case mix model 1 on the other hand adding case mix as a separate output model 3 did not have any significant impact on the distribution of efficiency estimates compared to the model without case mix we also found that in model 2 productivity growth was driven mainly by improvements in technology rather than increases in efficiency while in model 1 and model 3 the two effects ech and tch almost balanced each other leading to no productivity change

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

money income prices and interest rates including data from the 1980s sharply weakens the postwar time series evidence indicating significant relationships between money however defined and nominal income or between money and either real income or prices separately focusing on data from 1970 onward destroys this evidence altogether evidence indicating cointegration of real income and real money balances with due allowance for the effect of interest rates also deteriorates when the sample extends through the 1980s a positive finding is that the spread between the commercial paper rate and the treasury bill rate consistently contains highly significant information about future movements in real income copyright 1992 by american economic association

productivity growth technical progress and efficiency in their comment subhash c ray and evangelia desli 1997 hereafter rd point out that the specification of the decomposition of the malmquist productivity index used by fare et al 1994 hereafter fgnz is not unique and propose and compute an alternative specification of that decomposition we will discuss additional decompositions at the end of this note but proceed here by comparing the rd decomposition with fgnz based on both conceptual and computational grounds rd provide a discussion of the overall malmquist productivity index including the important issue of when this index is equivalent to the traditional notion of total factor productivity tfp namely under the condition that the reference technology be consistent with constant returns to scale crs as they point out this will yield a measure of tfp even if the true underlying technology is not crs for example both rd and fgnz use the crs reference technology to compute overall malmquist productivity one of the key issues raised is the role of the underlying scale properties of the benchmark technologies used to define and compute both productivity and its components in particular two reference technologies are employed in both rd and fgnz what we refer to as crs and variable returns to scale vrs technologies by construction these technologies are nested the crs technology contains the vrs technology as in figure 1 in rd this nestedness provides the logical basis for our decomposition at a very intuitive level we would argue that these two benchmarks can be used to provide bounds on the underlying true but unknown technology 2 intuitively we see the vrs technology providing a type of convex inner approximation whereas the crs technology provides a type of convex outer approximation thus these two technologies provide alternative benchmarks they do not require that the data satisfy either crs or vrs another possible intuitive interpretation is that the crs captures a perhaps hypothetical long run and the vrs approximates the short run as a reference technology the crs technology has some very useful features for example it captures the notion of maximal

total factor spillovers similarities and competitions in the petroleum industry this chapter investigates multi dimensional spillovers similarities and competitions in the petroleum industry spatial techniques are applied first in production function in order to observe the cross sectional dependence in each of the four dimensions product technology segment and region wide these four single dimensional spatial models are then aggregated by a model averaging method that assigns weights to different models based on their ability to explain data taking all dependences into consideration this chapter estimates the total factor spillovers similarities and competitions in the spirit of total factor productivity negative spillover effects are observed in all the four dimensions moreover segment wide competition has negative effect on productivity some policy implications concerning human capital globalization and development strategies are also discussed

on the policy ineffectiveness proposition and a keynesian alternative a rejoinder i the basis of rush and waldo s rw results is the introduction of a war dummy variable in the dg equation this is however difficult to justify in the context of a rational expectations model under incomplete learning wars by their very nature are unique events and it is not clear how the public are supposed to learn the quantitative effects that the ending of three totally different wars may have had upon the growth of real government expenditure the fact that in i946 the public knew that world war ii was over does not mean that they could also estimate its precise quantitative effect on government expenditure rw estimate their dg equation using data for the whole of the period i943 73 and i943 85 thus implicitly assuming that all these data were available to the public in i946 for the computation of the coefficient of the war dummy in the dg equation but in i946 the public could not possibly have known about the timing and the intensities of the korean or the vietnam wars the assumption of complete learning that underlies the rational expectations hypothesis in general and rw s version of the nc model in particular is especially troublesome when the model contains dummy variables that correspond to unique events

keynesian macroeconomics without the lm curve the is lm model has been a central tool of macroeconomic teaching and practice for over half a century legions of earlier writers have offered criticisms of the model that have become familiar with the passage of time the model lacks microeconomic foundations assumes price stickiness has no role for expectations and simplifies the economy s complexities to a handful of crude aggregate relationships but countless teachers students and policymakers have found the model to be a powerful framework for understanding macroeconomic fluctuations recent developments have created new difficulties for the is lm model although the new difficulties are less profound than the traditional ones they are more likely to be fatal like all models the is lm model is not universal its assumptions and simplifications make it better suited to analyzing some issues than others and to describing some economic environments than others but neither the issues nor the environment of macroeconomic fluctuations are fixed in terms of issues one major change is that the debates between keynesians and monetarists about the relative effectiveness of monetary and fiscal policy that were central to macroeconomics in the 1960s and 1970s now play only a modest role in the analysis of short run fluctuations in terms of the environment one important change is that most central banks including the u s federal reserve now pay little attention to monetary aggregates in conducting policy but the is lm model is particularly well suited to presenting the debates between keynesians and monetarists and one of its basic assumptions is that the central bank targets the money supply in short recent developments work to the disadvantage of is lm this observation suggests that it is time to revisit the question of whether is lm is the best

a money demand system for euro area m3 in order to assess the importance of monetary and financial developments for key macroeconomic variables in the euro area a money demand system for m3 is estimated adopting a structural cointegrating var approach while maintaining a good statistical representation of the data long run relationships are based on economic theory by using generalized response profiles the dynamics of the money demand system is investigated without any further identifying assumptions error bounds of the profiles are derived using bootstrap simulations

guessing with negative feedback an experiment we investigate experimentally a new variant of the beauty contest game bcg in which players actions are strategic substitutes a negative feedback bcg our results show that chosen numbers are closer to the rational expectation equilibrium than in a strategic complements environment a positive feedback bcg we also find that the estimated average depth of reasoning from the cognitive hierarchy model does not differ between the two environments we show that the difference may be attributed to the fact that additional information is more valuable when players actions are strategic substitutes rather than strategic complements in line with other recent experimental findings

oil price shocks and real gdp growth empirical evidence for some oecd countries this study assesses empirically the effects of oil price shocks on the real economic activity of the main industrialized countries multivariate var analysis is carried out using both linear and non linear models the latter category includes three approaches employed in the literature namely the asymmetric scaled and net specifications evidence of a non linear impact of oil prices on real gdp is found in particular oil price increases are found to have an impact on gdp growth of a larger magnitude than that of oil price declines with the latter being statistically insignificant in most cases among oil importing countries oil price increases are found to have a negative impact on economic activity in all cases but japan moreover the effect of oil shocks on gdp growth differs between the two oil exporting countries in the sample with the uk being negatively affected by an oil price increase and norway benefiting from it

is step j thinking an arbitrary modelling restriction or a fact of human nature abstract in boundedly rational rule learning in a guessing game games and economic behavior 16 1996 we combined nagel s 1995 model of boundedly rational players with a law of effect learning model and the synthesis outperformed alternative theories when confronting nagel s data in that model there were four boundedly rational behavioral rules step j j 0 1 2 3 each corresponding to an integer level of depth of reasoning it is legitimate to ask for a justification of the restriction to these integer rules why is it not reasonable to suppose that some player believes that 50 of the population is step 0 and 50 is step 1 and so himself adopts something like a step 1 5 rule this paper constructs a tractable model with potentially infinitely many non integer rules and conducts comparison tests the main conclusion is that allowing for non integer rules does not help to explain the data therefore by occam s razor the integer rule model is preferred these results suggest that step j thinking is a fact of human nature rather that an arbitrary modelling restriction

toward resource independence why state owned entities become multinationals an empirical study of india s public r d laboratories in this paper we build on the standard resource dependence theory rdt and its departure suggested by vernon to offer a novel explanation for why state owned entities soes might seek a global footprint and global cash flows to achieve resource independence from other state actors in the context of soes the power use hypothesis of standard rdt can be used to analyze the dependence of soes on other state actors such as government ministries and government agencies that have ownership and control rights in the soe building on vernon we argue that the soe can break free from this power imbalance and establish resource independence from other state actors by becoming a multinational firm and or by generating global cash flows we leverage a natural experiment in india and outline both quantitative and qualitative evidence from 42 indian state owned laboratories to support this argument

comparing malmquist and hicks moorsteen productivity indices exploring the impact of unbalanced vs balanced panel data abstract we explore the effect of balancing unbalanced panel data when estimating primal productivity indices using non parametric frontier estimators first we list a series of pseudo solutions aimed at making an unbalanced panel balanced then we discuss some intermediate solutions e g balancing 2 years by 2 years furthermore we link this problem with a variety of literatures on infeasibilities statistical inference of non parametric frontier estimators and the index theory literature focusing on the dynamics of entry and exit in industries we then empirically illustrate these issues comparing both malmquist and hicks moorsteen productivity indices on two data sets in particular we test for the differences in distribution when comparing balanced and unbalanced results for a given index and when comparing malmquist and hicks moorsteen productivity indices for a given type of data set the latter tests are crucial in answering the question to which extent the malmquist index can approximate the hicks moorsteen index that has a total factor productivity tfp interpretation finally we draw up a list of remaining issues that could benefit from further exploration

a critique of the proposed tests of the natural rate rational expectations hypothesis the failure of the governments of most industrialised countries over the past decade to deal successfully with the problems of rising unemployment and high and often accelerating rates of price and wage inflation has revived interest in the pre keynesian macro economics of sound money and has renewed the controversy of the 1930 s over what governments should or should not do if they wish to achieve full employment with reasonable price stability in democratic societies keynesian economics has come under attack both by those who primarily oppose interventionist policies on ideological grounds and by the so called new classical macro economists who adhere to the natural rate of unemployment hypothesis nrh advanced by phelps i967 and friedman i 968 and the hypothesis of rational formation of expectations reh originally due to muth i96i armed with this joint natural rate rational expectations nr re hypothesis the new classical macro economists have argued that in a world capable of being represented by linear or log linear relations with a unique and stable equilibrium and no information discrepancy between the government and the private sector no government macro economic policy whether monetary or fiscal no matter how ingeniously formulated and how effectively implemented can have any systematic or lasting impact upon the level of output or the rate of unemployment 2 clearly this fundamental policy

monetary convergence of the eu accession countries to the eurozone a theoretical framework and policy implications abstract a flexible approach to direct inflation targeting offers the european union accession countries a viable monetary policy choice that is believed to facilitate both the economic transition and the monetary convergence to the eurozone following this assumption a model investigating the nexus between inflation and selected monetary variables in three eu accession countries the czech republic poland and hungary is advanced the empirical analysis is aimed at explaining the sensitivity of the cpi based inflation path in these countries to backward as well as forward looking expectations nominal exchange rate fluctuations the eurozone inflation impulses and output changes the analysis implies that the monetary convergence begins with flexible inflation targeting and concludes with a full fledged euroization

data envelopment analysis for environmental assessment comparison between public and private ownership in petroleum industry abstract environmental assessment recently becomes a major policy issue in the world this study discusses how to apply data envelopment analysis dea for environmental assessment an important feature of the dea environmental assessment is that it needs to classify outputs into desirable good and undesirable bad outputs because private and public entities often produce not only desirable outputs but also undesirable outputs as a result of their production activities this study proposes the three types of unification for dea environmental assessment by using non radial dea models the first unification considers both an increase and a decrease in the input vector along with a decrease in the direction vector of undesirable outputs this type of unification measures unified efficiency the second unification considers a decrease in an input vector along with a decrease in the vector of undesirable outputs this type of unification is referred to as natural disposability and measures unified efficiency under natural disposability the third unification considers an increase in an input vector but a decrease in the vector of undesirable outputs this type of unification is referred to as managerial disposability and measures unified efficiency under managerial disposability all the unifications increase the vector of desirable outputs to document their practical implications this study has applied the proposed approach to compare the performance of national oil firms with that of international oil firms this study identifies two important findings on the petroleum industry one of the two findings is that national oil companies under public ownership outperform international oil companies under private ownership in terms of unified operational and environmental efficiency and unified efficiency under natural disposability however the performance of international oil companies exhibits an increasing trend in unified efficiency the other finding is that national oil companies need to satisfy the environmental standard of its own country while international oil companies need to satisfy the international standard that is more restricted than the national standards as a consequence international oil companies outperform national oil companies in terms of unified efficiency under managerial disposability

do oil price shocks matter evidence for some european countries this paper analyzes the oil price macroeconomy relationship by means of analyzing the impact of oil prices on inflation and industrial production indexes for many european countries using quarterly data for the period 1960 1999 first we test for cointegration allowing for structural breaks among the variables second and in order to account for the possible non linear relationships we use different transformation of oil price data the main results suggest that oil prices have permanent effects on inflation and short run but asymmetric effects on production growth rates furthermore significant differences are found among the responses of the countries to these shocks

money demand and disinflation in selected ceecs during the accession to the eu a panel data set for six countries czech republic hungary poland romania slovakia and slovenia is used to estimate money demand with panel cointegration methods over the recent disinflation period the basic money demand model is able to convincingly explain the long run dynamics of m2 in the selected countries however money demand is found to have been significantly determined by the euro area interest rates and the exchange rate against the euro which indicates possible instability of money demand functions in the central and eastern european countries therefore direct inflation targeting is an appropriate monetary regime before the eventual adoption of the euro

stability of the money demand function in asian developing countries previous studies that estimated the money demand function in asian developing countries either employed traditional estimation techniques or recently popularized cointegration technique while the first group suffers from spurious regression problems the second group interpreted their finding of cointegration as a sign of stability of estimated parameters this study after incorporating the cusum and cusumsq tests into cointegration analysis shows that in some asian countries even though real m1 or m2 monetary aggregates are cointegrated with their determinants the estimated parameters are unstable

analysing money demand relation for oecd countries using common factors abstractthis article investigates the existence of a long run money demand relation for a panel data consisting of 13 oecd countries the analysis is based on the most recent data the existence of a long run money demand relation is tested with two new meta analytic panel cointegrating rank tests which are robust to cross sectional dependence cross sectional dependency in the data generating process is modelled by unobserved common factors the observed data are decomposed into idiosyncratic and common components and these two components are analysed separately to find out the driving forces of the long run stationary relationship the evidence shows that the long run money demand relation is driven by the cross unit cointegration finally the long run relation is estimated by taking the common factors into account

unit root hypothesis new classical and keynesian models abstract following perron econometrica 1989 57 1361 1401 the variables in the new classical and keynesian output equations are shown to be trend stationary therefore these models are evaluated for the united states with the standard non nested hypothesis tests the majority of these tests have rejected the new classical in favour of the keynesian approach

three decades of money demand studies differences and similarities by analysing almost 1000 money demand estimations this paper attempts to summarize the diverse findings of the literature on this topic using both descriptive statistics and meta regressions several stylized facts are derived about the two most prominent determinants of money demand income and interest rate elasticities in particular it is shown we show that the size and signs of average elasticities are systematically related to the choice of included variables e g m1 or m3 short run or long run interest rates the country grouping e g usa versus germany and the empirical specification e g the inclusion of one or two interest rates

another look at long run money demand abstract this paper investigates the long run demand for m1 in the postwar united states previous studies based on data ending in the late 1980s are inconclusive about the parameters of postwar money demand this paper obtains precise estimates of these parameters by extending the data through 1996 the income elasticity of money demand is approximately 0 5 and the interest semi elasticity is approximately 0 05 these parameters are significantly smaller in absolute value than the corresponding parameters for the prewar period a caveat is that the analysis assumes there is no trend in money demand resulting from technological change

single market effects on productivity in the german insurance industry abstract the single market project of the european commission was supposed to foster productivity growth in the financial service industry we assess its consequences on productivity development in the german insurance industry one of the largest insurance markets within the european union by applying data envelopment analysis to a panel of german insurance companies we estimate standard and bootstrapped efficiency scores for the years 1991 through 2006 and apply a test on scale efficiency based on bootstrapped statistics furthermore we compute a malmquist index and test for different types of productivity convergence across firms

the demand for m1 in the u s a 1960 1988 estimated u s m1 demand functions appear unstable regularly breaking down over 1960 1988 e g missing money great velocity decline m1 explosion we propose a money demand function whose arguments include inflation real income long term bond yield and risk t bill interest rates and learning curve weighted yields on newly introduced instruments in m1 and non transactions m2 the model is estimated in dynamic error correction form it is constant and with an equation standard error of 0 4 variance dominates most previous models estimating alternative specifications explains earlier breakdowns showing the model s distinctive features to be important in accounting for the data

demand for money in the selected oecd countries a time series panel data approach and structural breaks time series panel data estimation methods are used to estimate the cointegrating equations for the demand for money m1 for a panel of 11 organization for economic cooperation and development oecd countries for which consistent quarterly data are available the effects of financial reforms are analysed with structural break tests and estimates for alternative sub samples our results for the post reform sub samples show that the income elasticity of the demand for money has decreased and response to interest rate changes has increased

technological change technological catch up and capital deepening relative contributions to growth and convergence we decompose labor productivity growth into components attributable to 1 technological change shifts in the world production frontier 2 technological catch up movements toward or away from the frontier and 3 capital accumulation movement along the frontier the world production frontier is constructed using deterministic methods requiring no specification of functional form for the technology nor any assumption about market structure or the absence of market imperfections we analyze the evolution of the cross country distribution of labor productivity in terms of the tripartite decomposition finding that technological change is decidedly nonneutral and that both growth and bipolar international divergence are driven primarily by capital deepening jel o30 o47 d24

bank productivity and performance groups a decomposition approach based upon the luenberger productivity indicator abstract the purpose of this paper is twofold first in the framework of the strategic groups literature it analyzes changes in productivity and efficiency of spanish private and savings banks over an eight year period 1998 2006 second by adapting the decomposition of the malmquist productivity indices suggested by fare et al 1994 it proposes similar components decomposing the luenberger productivity indicator initially productivity is decomposed into technological and efficiency changes thereafter this efficiency change is decomposed into pure efficiency scale and congestion changes empirical results demonstrate that productivity improvements are partially due to technological innovation furthermore it is shown how the competition between private and savings banks develops in terms of the analyzed productivity and efficiency components while private banks enjoy better efficiency change savings banks contribute more to technological progress consequently the luenberger components are used as cluster analysis inputs thus economic interpretations of the resulting performance groups are made via key differences in productivity components finally following the strategic groups literature supplementary insights are gained by linking these performance groups with banking ratios

features of experimentally observed bounded rationality abstract on the basis of experimental evidence reported in the literature the paper draws conclusions about the bounded rationality exhibited by human economic behaviour among the topics discussed are presentation effects caused by superficial analysis strategic reasoning and strategy construction based on reciprocity and fairness avoidance of circular concepts in step by step strategic reasoning ex post rationality and learning direction theory presence of both adaptive and analytic approaches to repeated decision tasks and the absence of quantitative expectations and optimization in typical repeated game strategies

company sector money demand new evidence on the existence of a stable long run relationship for the united kingdom the u k departure from the european exchange rate mechanism has created an urgent need for new indicators of monetary policy stance traditional simple sum monetary aggregates have proven unreliable particularly in the face of the financial innovations of the 1980s micro theory suggests that inappropriate aggregation over heterogeneous assets and holders may be to blame the present paper tests for weak separability of asset groupings for the u k company sector divisia weighted aggregates are constructed for the resulting narrow and broad groupings it is shown that stable long run relationships corresponding to money demand equations exist for these aggregates arbitrary dummies representing financial innovation are not required in contrast to some other work in this area copyright 1994 by ohio state university press

should a monetary policymaker look at money abstract this paper examines whether monetary indicators are useful in implementing optimal discretionary monetary policy when the policymaker has incomplete information about the environment we find that money does not contain useful information for the policymaker if we calibrate the model to the u s economy if money demand were to be appreciably less variable observations on money could be useful in response to productivity shocks but would be harmful in response to money demand shocks we provide an incomplete information example where equilibrium welfare declines when the money demand volatility decreases

the theory and measurement of the net benefits of multinationality the case of the international petroleum industry internalization is one of the most important factors for foreign direct investment and multinationality going multinational brings some gains the empirical evidence presented provides an objective quantitative measure of the gains of being a multinational firm in the petroleum refining industry it is estimated that multination ality increases scale efficiency by approximately 3 and reduces business risk by approximately 43 however the gains of multinationality cannot be attained without incurring some costs the cost of expanding the firs s operation beyond its national boundaries is estimated to be approximately a 10 reduction in the firm s overall economic efficiency

the optimal allocation of prizes in contests we study a contest with multiple not necessarily equal prizes contestants have private information about an ability parameter that affects their costs of bidding the contestant with the highest bid wins the first prize the contestant with the second highest bid wins the second prize and so on until all the prizes are allocated all contestants incur their respective costs of bidding the contest s designer maximizes the expected sum of bids our main results are 1 we display bidding equlibria for any number of contestants having linear convex or concave cost functions and for any distribution of abilities 2 if the cost functions are linear or concave then no matter what the distribution of abilities is it is optimal for the designer to allocate the entire prize sum to a single first prize 3 we give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function

an analysis of the efficiency of the oil refining industry in the oecd countries abstract this study investigated the efficiency of the oil refining industry using the two stage method of markowitz portfolio optimization theory and panel data analysis of about 30 oecd countries from 2005 to 2016 which is a new methodology for measuring the efficiency of the oil industry the oil refining industry s efficiency is derived from the prices of petroleum products naphtha gasoline kerosene diesel and fuel oil using the portfolio theory the panel data was constructed using the following dependent variables the crude oil production efficiency energy consumption renewable energy consumption and r d investment using the panel data analysis empirical analyzes are conducted on how the efficiency of the oil refining industry is affected by explanatory variables the results show that crude oil production and energy use in oecd countries have a negative effect on the efficiency of the oil refining industry and consumption of renewable energy and r d investment have a positive effect contrary to conventional perception the petroleum industry can coexist with the renewable energy industry for sustainable development

the nature of transactions in the u s aggregate goods market abstract a model to estimate the proportion of transactions taking place in the new classical disequilibrium and keynesian markets is developed to estimate the aggregate u s goods market our results show that more than 14 of the transactions take place in the new classical equilibrium markets and the rest in the keynesian markets

demand for money in thailand after a brief review of recent literature new estimates on a long run of annual observations of the thai demand for all the standard measures of money are presented the results demonstrate that the demand for real money balances is a stable function of a scale variable and a coherent measure of opportunity cost with all the properties predicted by economic theory

regulation and efficiency an empirical analysis of the united kingdom continental shelf petroleum industry abstract the petroleum industry of the united kingdom continental shelf ukcs has been subject to various degrees of regulation self sufficiency security of supply and developing offshore supply industry triggered government regulations that were seen as interventionary and protectionist this paper tests the extent to which regulations targeting involvement of british offshore supply industry in the ukcs activity created inefficiencies data envelopment analysis dea stochastic frontier analysis sfa malmquist indices and standard regression analysis are used to measure the amount and address the source of inefficiencies we will show that such inefficiencies could not be ruled out the results provide an important insight into the ukcs production techniques and more generally into governments abilities to influence private sector behaviour through contracts and tendering

the equilibrium relationship among money income prices and interest rates evidence from a threshold cointegration test the long run equilibrium relationship among money income prices and interest rates in japan is investigated by the threshold cointegration test which allows for asymmetric adjustment introduced by enders and siklos 2001 the threshold cointegration approach provides clear evidence of the cointegration relationship characterized by asymmetric adjustment by allowing for asymmetric adjustment results are obtained showing the stability of the money demand function similar to lucas 1988 who pointed out that the money demand function is stable if unit income elasticity is imposed in particular the estimated results show that the adjustment process toward equilibrium is highly persistent above an appropriately estimated threshold whereas the adjustment process toward equilibrium quickly converges below it this finding indicates that deviations from equilibrium resulting from increases in money or decreases in income and prices are highly persistent

efficiency differences between private and state owned enterprises in the international petroleum industry technical managerial scale and allocative efficiency differences between private and state owned firms in the international petroleum industry are estimated the estimation of aigner chu deterministic frontiers maximum likelihood stochastic frontiers and maximum likelihood gamma frontiers make this analysis the most complete and sophisticated testing of property rights theory available the empirical findings suggestceteris paribus that state firms could satisfy the demand for their output with something less than half of their current resource inputs simply by being converted to private for profit enterprizes

competitive burnout theory and experimental evidence abstract we examine equilibrium selection in a two stage sequential elimination contest in which contestants compete for a single prize this game has a continuum of equilibria only one of which satisfies the coalition proof nash equilibrium cpne refinement that equilibrium involves burning out by using all of one s resources in the first stage it is pareto dominated by many other equilibria we find that cpne predicts well when four people compete but not when eight people compete for two second stage spots using a cognitive hierarchy ch framework we show that when the number of players and the mean number of thinking steps are large the ch prediction involves burning out this provides a partial explanation of our results we also develop a formal argument as to why cpne logic is more compelling with more players we conclude that more competition leads to higher bids and that burning out is indeed a competitive phenomenon

the income elasticity of money demand a meta analysis of empirical results abstract in this paper we use meta analytic methods to investigate possible sources for the large variation in empirical findings about the income elasticity of money demand our results suggest that the broadness of the monetary aggregate the inclusion of wealth and the consideration of financial innovation exert a significant influence on estimated income elasticities furthermore we find substantial cross country differences in particular between the us and other countries these differences can to some extent be explained by the macrofeconomic environment and the dissemination of payment cards

mixed strategy play in single stage first price all pay auctions with symmetric players abstract we consider sealed bid first price all pay auctions with complete information discrete strategy space budget constraint and symmetric players and then construct the equilibrium solution in mixed strategies for both fixed and variable prizes the equilibrium solution yields predictions concerning the effects of group size and value of the prize that are tested experimentally the experimental results support equilibrium play on the aggregate but not individual level adaptive learning on the individual level accounts for the major trends in the aggregate expenditures over time

on the reinterpretation of money demand regressions a stylized fact concerning estimated money demand relationships is that lagged dependent variables have high explanatory power and large estimated coefficients which is hard to explain at a theoretical level marvin s goodfriend 1985 suggests that this may be due to the presence of serially correlated measurement errors in the independent variables the author demonstrates how consistent estimates of the short run demand function can be obtained even if the goodfriend hypothesis is accepted and also how the hypothesis might be tested application of the suggested test using the goldfeld 1973 data set leads to decisive rejection of the hypothesis copyright 1994 by ohio state university press

quantal response and nonequilibrium beliefs explain overbidding in maximum value auctions we report new experimental data on a simple common value auction to investigate the extent to which bidding can be explained by logit qre in combination with different models about bidder beliefs cursed equilibrium level k and cognitive hierarchy there is a close correspondence between the predicted bidding patterns in those models and the distribution of observed bids the pattern of median bids in the data consists of a combination of overbidding with low signals and near value bidding with higher signals logit qre with heterogeneous bidders approximates this pattern combining qre with any of the other models of belief formation leads to a closer match with the data all the estimated models predict only small treatment effects across different versions of the game consistent with the data we also reanalyze an earlier dataset for the same game ivanov et al 2010 which exhibited much more overbidding and reach similar qualitative conclusions

asymmetric responses of money demand to oil price shocks in saudi arabia a non linear ardl approach saudi arabia is an open oil based economy with fixed exchange rates therefore it has limited monetary policy autonomy using non linear autoregressive distributed lag approach this article inves

resource security competition for global resources strategic intent and governments as owners we develop a resource security theory by examining the intent of acquisitions of scarce resources by multinational firms results suggest that owners of firms can shape the intent of resource acquisitions specifically state owned enterprises soes tend to acquire and pay more for resources for exploration rather than exploitation this is because soes owners governments are most concerned with securing their country s future we contribute to the literature by suggesting that ownership influences resource acquisitions that resource security is of importance to multinational enterprises and that soes invest abroad to safeguard both their own and their home countries future

the future of monetary aggregates in monetary policy analysis this paper considers the role of monetary aggregates in modern macroeconomic models of the new keynesian type the focus is on possible developments of these models that are suggested by the monetarist literature and that in addition seem justified empirically both the relation between money and inflation and between money and aggregate demand are considered regarding the first relation it is argued that both the mean and the dynamics of inflation in present day models are governed by money growth this relationship arises from a conventional aggregate demand channel claims that an emphasis on the link between monetary aggregates and inflation requires a direct channel connecting money and inflation are wide of the mark the relevance of money for aggregate demand in turn lies not via real balance effects or any other justification for money in the is equation but on money s ability to serve as a proxy for the various substitution effects of monetary policy that exist when many asset prices matter for aggregate demand this role for monetary aggregates which is supported by empirical evidence enhances the value of money to monetary policy

money demand in hungary and poland this paper analyses the determinants and the stability of money demand functions in hungary and poland using an error correction framework the null of stable cointegration relationships cannot be rejected in some specifications the results suggest that long run parameters are in line with economic theory while judging the appropriateness of different strategies of monetary policy on the basis of these findings alone would be premature the paper suggests that money demand functions can serve as a useful reference for monetary authorities

money demand during hyperinflation and stabilization bulgaria 1991 2000 the demand for money in bulgaria is estimated over a ten year period 1991 2000 of high inflation and inflation uncertainty the paper distinguishes between three well defined sub periods high variable but not systematically accelerating inflation from 1991 until april 1996 the near hyperinflation period from may 1996 to february 1997 and the subsequent stabilization after the adoption of a currency board the empirical analysis utilizes a standard methodology of cointegration and error correction the functional determinants of the demand for money change during the different sub periods during the hyperinflation episode cagan s model is employed

impulse balance equilibrium and feedback in first price auctions abstract experimental sealed bid first price auctions with private values in which feedback on the losing bids is provided yield lower revenues than auctions where this feedback is not given the concept of weighted impulse balance equilibrium which is based on a principle of ex post rationality and incorporates a concern for social comparison captures the data

financial deregulation and the dynamics of money prices and output in new zealand and australia effects of financial deregulation in the 1980s on the dynamic interactions among money prices and output in new zealand and australia are evaluated prior to deregulation the series appear to be nonstationary and cointegrated based on johansen s maximum likelihood tests with money proportional to prices but less than proportional to output in the long run the series also appear cointegrated in new zealand through the 1980s when the effects of deregulation are accounted for with a deterministic shift parameter the cointegrating coefficients are similar for the pre liberalization and full sample periods and dynamic responses are evaluated for error correction models incorporating the estimated long run relationships copyright 1993 by ohio state university press

modern hyper and high inflations since 1947 hyperinflations by cagan s definition in market economies have been rare much more common have been longer inflationary processes with inflation rates above 100 percent per annum based on a sample of 133 countries and using the 100 percent threshold as the basis for a definition of very high inflation episodes this paper examines the main characteristics of such inflations among other things we find that i close to 20 percent of countries have experienced inflation above 100 percent per annum ii higher inflation tends to be more unstable iii in high inflation countries the relationship between the fiscal balance and seigniorage is strong both in the short and long run iv inflation inertia decreases as average inflation rises v high inflation is associated with poor macroeconomic performance and vi stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary

modelling money demand for a panel of eight transitional economies in this article we estimate money demand functions for a panel of eight transitional economies using quarterly data for the period 1995 01 1995 to 2005 03 we find that real m1 and real m2 and their determinants namely real income and short term domestic interest rate are cointegrated both for individual countries as well as for the panel long run elasticities suggest that consistent with theory real income positively and nominal interest rate negatively impact real money demand our test for panel granger causality suggests short run bidirectional causality between m1 and m2 and their determinants finally our tests for stability of the money demand functions reveal more cases of unstable money demand functions when m2 is used as a proxy for money demand

the nature of the adas model based on the islm model the aggregate demand and supply model adas is interpreted as a synthesis of the keynesian and neoclassical models it uses the islm model without explaining its nature to derive aggregate demand ad it is combined with an aggregate supply as curve to explain price inflation and output dynamics this paper argues that neither the ad nor as curve is conceptually the same as its microeconomic counterpart and adas is not a synthesis in fact adasimplies that discretionary policy is necessary and that price changes do not perform their traditional negative feedback function

breaks in money demand during the last twenty years beginning with the provocative paper by goldfeld 5 that revealed the case of the missing money the question of whether money demand the relationship between money income and an interest rate is stable has been intensively investigated using a variety of econometric techniques currently the most popular framework for examining the behavior of money demand is the cointegration framework in this framework the stationarity of money demand instead of the stability of money demand is evaluated earlier tests of the stability of money demand typically centered on whether the coefficient estimates were stable i e not subject to a structural break these tests did not consider the underlying time series aspects of the variables in money demand or the time series properties of their joint relationship prior to estimation as is now common given the seminal work of engle and granger 1 since then newer tests have focussed on the time series properties of the money demand variables and whether the joint relationship between the variables is stationary i e whether the variables are cointegrated engle and granger 1 and johansen and juselius 10 offer cointegration estimation procedures that have been applied by numerous researchers to the money incomeinterest rate relationship the pervasive finding is that money demand is non stationary see section ii below structural stability has not typically been a facet of investigation however the issues of stationarity and stability should not necessarily be treated independently failure to take account of structural change may bias the results in favor of non stationarity as shown in perron 16 1 history suggests that the economic environment and monetary institutions regulations and operating procedures have changed over time in the early 1970s the fixed exchange rate system collapsed when the gold exchange standard was abandoned and the u s dollar became a fiat currency during that same time the u s suffered an oil price shock that produced accelerating inflation and stagnant gdp growth an outcome that had never before been experienced in

a structured var for denmark under changing monetary regimes using recently developed statistical tools for analyzing cointegrated 1 2 data this article models money income prices and interest rates in denmark the final model describes the dynamic adjustment to short run changes of the process to deviations from long run steady states and to several political interventions it provides new insights about the effects of the liberalization of trade and capital in a small open european economy

some further evidence on the policy ineffectiveness proposition nonnested hypothesis tests are used to evaluate the keynesian and three variants of the new classical output equations the author s results based on the u s data show that the keynesian equation could not be rejected by the new classical equations for the periods 1946 85 and 1946 89 when the new classical equations are tested against the keynesian alternative with one minor exception the latter always rejected the former copyright 1992 by royal economic society

bootstrapping the malmquist indexes for italian airports abstract this paper uses data envelopment analysis to assess the operational performance of 28 italian airports during the period of 2000 through 2006 recent developments in bootstrapping techniques are used to correct total factor productivity estimates for bias and to assess the uncertainty surrounding such estimates this study found that the italian airport industry experienced a significant technological regress with few airports achieving an increase in productivity led by improvements in efficiency moreover the paper shows that the form of ownership public majority vs private majority of an airport management company does not significantly affect performance in contrast this type of the concession agreement has positive and significant effects on airport productivity finally the paper highlights the existence of a productivity gap between airports located in the north central part of the country and those located in the south

efficiency performance and regulation of the international gas industry a bootstrap dea approach abstract natural gas has become increasingly important as a source of energy in recent years it is widely viewed as an attractive means of realizing environmental objectives post kyoto and individual country gas industries have been extensively restructured to encourage investment from the private sector barriers to international trade in gas have fallen particularly in areas such as europe and asia as pipeline facilities have expanded and trading systems have become established an important question for policy makers concerns the use of scarce resources by this expanding industry regulatory authorities increasingly use efficiency comparators to incentivise minimum cost use of resources by price cap methods yardstick competition and other techniques this paper explores some of the policy developments which affect efficiency of resource use in the gas industry and uses data envelopment analysis to measure relative performance at the individual country level recent developments in bootstrapping techniques are used to correct efficiency estimates for bias and to assess the uncertainty surrounding such estimates the implications of these results for regulatory authorities are then explored

toward a macroeconomics of the medium run these days macroeconomics has become more respectable than it used to be i can remember when many economists liked to say microeconomics is not problematic but i just don t understand macroeconomics there was a definite implication that something must be wrong with macroeconomics not with the observer of course macroeconomics cannot be exact it has to work by rough analogy and empirical compromise maybe a certain raffishness is inevitable most economists work on microeconomic problems with increasing use of new microeconomic data but now it is widely understood that macroeconomics is at the heart of economics it will not do to be snooty about it this centrality will continue for the best possible reason the need to understand current events especially unfavorable ones and to formulate policies even benign neglect is a policy to

the modern history of exchange rate arrangements a reinterpretation we develop a novel system of reclassifying historical exchange rate regimes one key difference between our study and previous classifications is that we employ monthly data on market determined parallel exchange rates going back to 1946 for 153 countries our approach differs from the imf official classification which we show to be only a little better than random it also differs radically from all previous attempts at historical reclassification our classification points to a rethinking of economic performance under alternative exchange rate regimes indeed the breakup of bretton woods had less impact on exchange rate regimes than is popularly believed