the disaggregation of corporations selective intervention high powered incentives and molecular units a vast array of organizational innovations and changes are transforming us corporations large firms have dramatically downsized refocused and vertically disaggregated they increasingly obtain goods and services pursue complex development efforts and exploit horizontal synergies without the aid of formal hierarchy large firms are also internally disaggregating into smaller more autonomous units that are treated much like external subcontractors the authors argue that these organizational innovations share an important underlying commonalty economic activity is converging toward exchange involving either internal within firm or external between firm networks of small autonomous production or service units small units and small firms have become the basic building block the molecular units of these new forms further exchange among the small autonomous units is commonly a mix of both market like and hierarchical features the authors develop a theoretical explanation for these trends the

a revealed preference test of rationing abstract this paper derives a revealed preference test for utility maximization under rationing and can detect for which goods rationing is binding without specifying a functional form or imposing rationing constraints prior to estimation for uk data from 1920 55 we find evidence of utility maximization under rationing with rationing binding for food and other services estimated virtual prices exceed observed food prices by 16 5 in 1947 and observed prices of other services by 10 9 in 1952

on the sources of aggregate fluctuations in emerging economies recent research on macroeconomic fluctuations in emerging economies has advocated introducing a stochastic productivity trend or allowing for interest rate shocks and financial frictions we estimate a model that encompasses these two approaches shedding light on their relative merits and on how financial frictions affect the transmission of shocks the model accounts for aggregate fluctuations by assigning a dominant role to financial frictions in amplifying conventional temporary productivity shocks whereas trend shocks play a minor role a link between spreads and expected future productivity emerges as essential for a reasonable approximation to the data

the effects of human resource management practices on productivity a study of steel finishing lines the authors investigate the productivity effects of innovative employment practices using data from a sample of thirty six homogeneous steel production lines owned by seventeen companies the productivity regressions demonstrate that lines using a set of innovative work practices which include incentive pay teams flexible job assignments employment security and training achieve substantially higher levels of productivity than do lines with the more traditional approach which includes narrow job definitions strict work rules and hourly pay with close supervision their results are consistent with recent theoretical models which stress the importance of complementarities among work practices

life and work of john richard nicholas stone 1913 1991 sir richard stone knighted in 1978 and nobel laureate in economics in 1984 was one of the pioneering architects of national income and social accounts and one of the few economists of his generation to have faced the challenge of economics as a science by combining theory and measurement within a cohesive framework he was awarded the nobel prize in economics for his fundamental contributions to the development of national accounts but made equally significant contributions to the empirical analysis of consumer behaviour his work on the growth project was also instrumental in the development of appropriate econometric methodology for the construction and the analysis of large disaggregated macroeconometric models this paper provides an analysis of stone s many contributions

applied general equilibrium models of taxation and international trade an introduction and survey we wish to acknowledge the help of three referees and of john pencavel on several earlier drafts as well as the assistance of the modelers whose work is referred to in the paper they corrected our lack of understanding of their work and provided many other helpful comments excellent research and bibliographical assistance have been provided by debbie fretz radwan shaban and janet stotsky helpful comments have been made by charles ballard michael boskin lans bovenberg sylvester damus harvey galper glenn harrison gordon lenjosek jack mutti serena ng t n srinivasan charles stuart and eric toder the authors also acknowledgefinancial support from the national bureau of economic research the national science foundation international business machines and the social sciences and humanities research council ottawa canada

technological learning environments and organizational practices cross sectoral evidence from britain this study explores the co occurrence of technological and organizational learning processes by analyzing the adoption and use of four types of human resource management hrm practices rewarding problem solving top down management and decentralization in the 1990s across different technological learning environments using a sample of british workplaces we show that the level of use of diverse hrm practices aimed at creating different learning incentives is persistently heterogeneous across technological learning environments suggesting that hrm forms an essential part of the technological learning structure of firms copyright 2011 the author 2011 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

on the transmission of world agricultural prices two questions are asked about the relationship between domestic prices and world prices of agricultural commodities are variations in world prices transmitted to domestic prices domestic prices are regressed on world prices in various forms taking into account the possible effects of exchange rates and inflation the empirical analysis is based on data from the food and agriculture organization of the united nations for 58 countries from 1968 78 and for the countries of the european community from 1961 85 the results show that most of the variations in world prices are transmitted and that they constitute the dominant component in the variations of domestic prices

endogenous trading constraints with incomplete asset markets abstract this paper endogenizes the borrowing constraints on capital in a production economy with incomplete markets we find that these limits get looser with income a property that is consistent with us data on credit limits the framework with endogenous limits is then used to study the effects of a revenue neutral tax reform that eliminates capital income taxes our results illustrate that it is very important to take into account the effects of tax policies on the limits throughout the transition these effects can be big enough to change the overall conclusion about the desirability of a tax reform

the short and long run benefits of financial integration there is an extensive economics and finance literature that addresses the potential benefits of financial integration although theory predicts significant gains due to portfolio diversification decreased cost of equity capital and reduced financing constraints empirical models have so far yielded estimates of negligible welfare gains models used to estimate the welfare effects of financial integration do not explain both prices and quantities in order to address this point we propose a general equilibrium model that is able to simultaneously explain i the volatility of exchange rate and stochastic discount factors and both ii the volatility of net exports and iii the amount of cross country correlation and persistence of consumption growth rates in our economy agents have risk sensitive preferences in the sense of hansen and sargent 1995 this implies that investors have a preference for the timing of the resolution of uncertainty we conduct our analysis for the case in which consumption is a cobb douglas aggregation of domestic and foreign goods both of which are tradable furthermore we let the dynamics of the growth rate of the endowments of the two countries be characterized by the presence of two slowly moving predictive factors these components denoted as long run risks alter the intertemporal distribution of income risk by producing slow swings in the the short and long run benefits of financial integration

measuring international capital mobility a review many barriers to the international movement of capital across national boundaries have been dismantled over the course of the last 20 years financial integration was greatly enhanced by the removal of capital controls on the part of the united states germany canada switzerland and the netherlands after 1973 the recycling of surpluses to developing countries through the euromarkets in the 1970 s the removal of capital controls in the united kingdom and japan beginning in 1979 financial integration among european community countries including france and italy in preparation for 1992 recent moves toward financial liberalization in smaller countries in the pacific and the steady process of technical and institutional innovation that has proceeded around the world some popular tests of international capital mobility however appear to show anomalous results martin feldstein and charles horioka upset conventional wisdom in 1980 when they concluded that changes in countries rates of national saving had very large effects on their rates of investment and interpreted this finding as evidence of low capital mobility the argument

private capital flows capital controls and default risk abstract what has been the effect of the shift in emerging market capital flows toward private sector borrowers are emerging market capital flows more efficient if not can controls on capital flows improve welfare this paper shows that the answers depend on the form of default risk when private loans are enforceable but there is the risk that the government will default on behalf of all residents private lending is inefficient and capital controls are potentially pareto improving however when private agents may individually default capital flow subsidies are potentially pareto improving

competing in the new economy managing out of bounds this commentary was distributed at the mexico city meeting of the strategic management society and forms the basis for the call for papers made for the 1996 sms meeting to be held in phoenix arizona usa november 10 13 1996 at the pointe hilton resort the editors of the smj thought it worth drawing to our readers attention and offer it here as an interesting perspective on our field the issues it now faces and by implication what research and practice must confront over the years ahead

the feldstein horioka puzzle and spurious ratio correlation abstract this study shows that the feldstein horioka puzzle resembles a spurious ratio correlation due to a common deflator pearson 1896 7 empirically the feldstein horioka specification and its counterpart with an arbitrary deflator final domestic demand give similar results monte carlo results also indicates that the slope and r 2 of the ratio regression are upward biased theoretically assuming each of the original undeflated variables are linear homogeneous functions of the deflator and random disturbances formulas for and r 2 are derived as saving and investment rates are numerically small relative to the disturbances both and r 2 are predominantly determined by the disturbances and they tend towards unity when the disturbances are close in magnitude the feldstein horioka results are therefore noisy though not entirely spurious and do not necessarily reflect a strong correlation between investment and savings

change and complementarities in the new competitive landscape a european panel study 1992 1996 this paper addresses three weaknesses in the literature on new organizational forms the limited mapping of the extent of contemporary organizational change confusion about how contemporary changes link together and the lack of systematic testing of the performance consequences of this kind of change drawing on a large scale survey of organizational innovation in european firms the paper finds widespread but not revolutionary change in terms of organization structure processes and boundaries using the economics notion of complementarities the paper develops contingency and configurational approaches to suggest that organizational innovations will tend to cluster in particular ways and that the performance benefits of these innovations depend on their clustering complementarities in performance are explored from both inductive and deductive perspectives consistent with the expectations of complementarity theory high performing firms appeared to be innovating more and differently than low performing firms again consistent with complementarities piecemeal changes with the exception of it were found to deliver little performance benefit while exploitation of the full set of innovations was associated with high performance though few european firms were found to exploit the complementarities of new organizational practices those that did enjoyed high performance premia

solving the feldstein horioka puzzle with financial frictions unlike the prediction of a frictionless open economy model long term average savings and investment rates are highly correlated across countries a puzzle first identified by feldstein and horioka 1980 we quantitatively investigate the impact of two types of financial frictions on this correlation one is limited enforcement w here contracts are enforced by the threat of default penalties the other is limited spanning where the only asset available is noncontingent bonds we find that the calibrated model with both frictions produces a savings investment correlation and a volume of capital flows close to the data to solve the puzzle the limited enforcement friction needs low default penalties under which capital flows are much lower than those in the data and the limited spanning friction needs to exogenously restrict capital flows to the observed level when combined the two frictions interact to endogenously restrict capital flows and thereby solve the feldstein horioka puzzle

consumer bankruptcy a fresh start consumer bankruptcy provides partial insurance against bad luck but by driving up interest rates makes life cycle smoothing more difficult we argue that to assess this trade off one needs a quantitative model of consumer bankruptcy with three key features life cycle component idiosyncratic earnings uncertainty and expense uncertainty exogenous negative shocks to household balance sheets we find that transitory and persistent earnings shocks have very different implications for evaluating bankruptcy rules more persistent shocks make the bankruptcy option more desirable larger transitory shocks have the opposite effect our findings suggest the current us bankruptcy system may be desirable for reasonable parameter values jel d14 d91 k35

the transition to a market economy pitfalls of partial reform we present a theory of a partial economic reform of a planned economy similar to the one that took place in russia since 1988 and in china earlier in such a reform some markets are liberalized in the sense that producers can sell output to whomever they want including private firms at free prices but at the same time must sell to state firms at state prices we show that such a reform can result in a substantial diversion of subsidized inputs away from state firms and toward private firms even when state firms value these inputs more the result may be a reduction of total output the simple analysis sheds light on many consequences of the soviet reform such as breakdown of coordination of production increased state policing of delivery quotas prohibitions of trading cooperatives and opposition to privatization the model also explains why partial reform failed in russia but worked in china

binding constraint on economic growth under export oriented industrialization and globalization the two gap model of economic growth implies that different constraints on economic growth namely the savings and the foreign exchange availability are binding at different times this article estimates these varying binding constraints in 16 countries in east and southeast asia and latin america and explores their differences across countries regions and periods i show that the east and southeast asian countries which are recognized to be successful in export oriented industrialization are less constrained by the foreign exchange availability with reinforced export capacity than the latin american countries which had carried some inertia of import substituting industrialization policy until the 1980s in addition the economic growth turns out to be more constrained by the domestic savings in recent years which can be a reflection of capital account liberalization policies typically implemented in the late 1980s and 1990s and or a diminishing return to export led growth in either case this mi

non parametric tests of consumer behaviour the neoclassical model of consumer behaviour postulates that a consumer s choice behaviour can be described as deriving from utility maximization subject to a budget constraint one is then naturally led to ask what this model implies about observed behaviour this question has been addressed from two quite distinct approaches the first approach originating in the work of slutsky 1915 and antonelli 1886 derives necessary and sufficient conditions involving the derivatives of the demand functions the second approach originating in the work of samuelson 1938 1947 1948 derives algebraic conditions on the demand functions implied by maximizing behaviour

international real business cycles we ask whether a two country real business cycle model can account simultaneously for domestic and international aspects of business cycles with this question in mind we document a number of discrepancies between theory and data the most striking discrepancy concerns the correlations of consumption and output across countries in the data outputs are generally more highly correlated across countries than consumptions in the model we see the opposite

migration and sovereign default risk abstract during sovereign debt crises countries experience persistent economic declines spiking spreads and outflows of capital and workers to account for these salient features we develop a sovereign default model with migration and capital accumulation the model has a two way feedback default risk lowers workers welfare and induces emigration which in turn intensifies default risk by lowering tax base and investment compared with a no migration model our model produces higher default risk lower investment and a more profound and prolonged recession we find that migration accounts for almost all of the lack of recovery in gdp during the recent spanish debt crisis

impacts of economic reform in poland incidence and welfare changes within a consistent framework the costs of shortages and rationing are not captured by standard consumer price indices thus the change in real gdp per capita is an overestimate of welfare losses in transition economics in this study virtual prices are used to calculate new cost of living indices clis the results for polant show that from 1987 to 1992 the cli ignoring the rationing effects is biased upward from 1 53 to 3 71 percentage points per year compared to the estimates of welfare loss that neglect the rationing effects during the prereform period the estimated welfare losses that reflect the rationing are reduced by 50 using hausman virtual prices and by 75 using external proxy virtual prices

explaining saving investment correlations national saving and investment rates are highly positively correlated in virtually all countries this is puzzling as it apparently implies a low degree of international capital mobility this paper shows that the observed positive correlation between national saving and investment rates arises naturally within a quantitatively restricted equilibrium model with perfect mobility of financial and physical capital the model is consistent with the fact that saving investment correlations are larger for larger countries but are still substantial for small countries further the model is consistent with the finding that current account deficits tend to be associated with investment booms copyright 1993 by american economic association

international business cycles with endogenous incomplete markets backus kehoe and kydland 1992 baxter and crucini 1995 and stockman and tesar 1995 find two major discrepancies between standard international business cycle models with complete markets and the data in the models cross country correlations are much higher for consumption than for output while in the data the opposite is true and cross country correlations of employment and investment are negative while in the data they are positive this paper introduces a friction into a standard model that helps resolve these anomalies the friction is that international loans are imperfectly enforceable any country can renege on its debts and suffer the consequences for future borrowing to solve for equilibrium in this economy with endogenous incomplete markets the methods of marcet and marimon 1999 are extended incorporating the friction helps resolve the anomalies more than does exogenously restricting the assets that can be traded

quadratic engel curves and consumer demand this paper presents a model of consumer demand that is consistent with the observed expenditure patterns of individual consumers in a long time series of expenditure surveys and is also able to provide a detailed welfare analysis of shifts in relative prices a nonparametric analysis of consumer expenditure patterns suggests that engel curves require quadratic terms in the logarithm of expenditure while popular models of demand such as the translog or the almost ideal demand systems do allow flexible price responses within a theoretically coherent structure they have expenditure share engel curves that are linear in the logarithm of total expenditure we derive the complete class of integrable quadratic logarithmic expenditure share systems a specification from this class is estimated on a large pooled data set of u k households models that fail to account for engel curvature are found ro generate important distortions in the patterns of welfare losses associated with a tax increase

international business cycles world region and country specific factors the paper investigates the common dynamic properties of business cycle fluctuations across countries regions and the world we employ a bayesian dynamic latent factor model to estimate common components in macroeconomic aggregates output consumption and investment in a 60 country sample covering seven regions of the world the results indicate that a common world factor is an important source of volatility for aggregates in most countries providing evidence for a world business cycle we find that region specific factors play only a minor role in explaining fluctuations in economic activity we also document similarities and differences across regions countries and aggregates jel f41 e32 c11 c32

following doctors orders organizational change as a response to human capital bargaining power organizational change is facilitated by both internal and external factors yet little is known about how they might be linked through a case study of one hospital s change from a nonprofit to a nonprofit for profit organizational structure we find that human capital bargaining power is a key mechanism that integrates internal and external drivers of change however a paradox surfaces whereby the strength of the bargaining power can force structural changes that may be counterproductive our results show that human capital bargaining power is a double edged sword shifting the governance structure to benefit those with power by providing additional rents but creating challenges for the ongoing management and retention of such valuable human capital our findings have implications for the long term survival of talent intensive organizations where human capital bargaining power is strong

the impact of competition on make or buy decisions evidence from the spanish local tv industry this paper empirically investigates whether changes in product market competition affect firm boundaries exploiting regulation induced shocks to entry barriers and differences in regulation enforcement across cities to obtain exogenous variation in competition we establish a negative causal effect of competition through reduced entry barriers and a larger number of rival firms on vertical integration in the setting of the spanish local television industry between 1995 and 2002 data and the online appendix are available at https doi org 10 1287 mnsc 2016 2633 this paper was accepted by bruno cassiman business strategy

the thick description and comparison of societal systems of capitalism critiques of international business theory have recently pointed to weaknesses in the handling of context of culture and of policy implications it is contended that the origins of such failings lie in the discipline s commonly accepted methodologies and in turn that they have epistemological roots as a route out of the dilemmas faced a proposal is made to adopt more complete ways of handling determinacy including the influences of history culture and the societal emergence of institutions business systems theory is drawn upon and a model proposed developed from the work of whitley in this culture is seen as underpinning formal institutions which in turn underpin societal business systems the use of the model relies on the ideas of geertz on thick description and of ragin on holistic analysis it is illustrated with a comparison of the american and french socio economic systems seen historically findings in strategy research about the geographically defined nature of firm supremacy in many industries are brought into the account using the business systems literature consistent patterns of determinacy as well as distinct and contrasting trajectories of business system evolution are noted a more complete and multidisciplinary form of explanation grounded in socio economics is advocated as a means of meeting the challenges both of understanding and of policymaking at several levels

domestic saving and international capital movements in the long run and the short run the evidence and analysis in this paper support the earlier findings of feldstein and horioka 1980 that sustained increases in domestic savings rates induce approximately equal increases in domestic rates of investment new estimates for the post opec period 1974 79 imply that each extra dollar of domestic saving increases domestic investment by approximately 85 cents in a sample of 17 oecd countries an explicit analysis of the problems of identification and simultaneous equations bias suggests that the regression estimates are more relevant as a guide to the long run response of international capital flows than to their short run behavior coefficient estimates based on annual variations in savings and investment are subject to potentially severe simultaneous equations bias that is not present when annual observations are averaged over a decade or more and the regression is estimated with a cross country sample of these averages a portfolio model of international capital allocation that is presented in the paper indicates that the short run change in the rate of net foreign investment in response to a sustained increase in domestic saving is likely to be substantially greater than the ultimate steady state response this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

dynamics of the trade balance and the terms of trade the j curve the authors provide a theoretical interpretation of two features of international data the countercyclical movements in net exports and the tendency for the trade balance to be negatively correlated with current and future movements in terms of trade but positively correlated with past movements they document the same properties in a two country stochastic growth model in which trade fluctuations reflect in large part the dynamics of capital formation the authors find that their general equilibrium perspective is essential the relation between the trade balance and the terms of trade depends critically on the source of fluctuations copyright 1994 by american economic association

rational inattention and organizational focus this paper studies optimal communication flows in organizations a production process can be coordinated ex ante by letting agents stick to a prespecified plan of action alternatively agents may adapt to task specific shocks in which case tasks must be coordinated ex post using communication when attention is scarce an optimal organization coordinates only a few tasks ex post those tasks are higher performing more adaptive to the environment and influential hence scarce attention requires setting priorities not just local optimization our results provide microfoundations for a central idea in the management literature that firms should focus on a limited set of core competencies

financial integration and growth in a risky world abstract we revisit the debate on the benefits of financial integration in a two country neoclassical growth model with aggregate uncertainty the framework accounts simultaneously for gains from a more efficient capital allocation and gains from risk sharing together with their interaction global numerical methods allow for meaningful welfare comparisons gains from integration are quantitatively small even for riskier and capital scarce emerging economies these countries import capital for efficiency reasons before exporting it for self insurance leading to capital flows and growth reversals along the transition this opens the door to richer empirical implications than previously considered in the literature

estimating demand elasticities under rationing eliminating rationing in the united kingdom following the second world war was a concern for policy makers because of potentially large fluctuations in post war prices and the impact on unrationed goods this study shows that in using virtual prices elasticities can be estimated from a free demand system consistent with observed consumer choices substitution estimates without accounting for rationing are misleading in contrast using virtual prices and estimating a free market system yield results similar to those of the pre war period results show that food rationing affected expenditure across unrationed goods rationing on other services had little effect on expenditure across unrationed goods

financial integration and international risk sharing abstract conventional wisdom suggests that financial liberalization can help countries insure against idiosyncratic risk there is little evidence however that countries have increased risk sharing despite widespread financial liberalization we show that the key to understanding this puzzling observation is that conventional wisdom assumes frictionless international financial markets while actual markets are far from frictionless financial contracts are incomplete and contract enforceability is limited when countries remove official capital controls default risk is still present as an implicit barrier to capital flows if default risk were eliminated capital flows would be six times greater and international risk sharing would increase substantially

perspective absorbing the concept of absorptive capacity how to realize its potential in the organization field the purpose of this perspective paper is to advance understanding of absorptive capacity its underlying dimensions its multilevel antecedents its impact on firm performance and the contextual factors that affect absorptive capacity twenty years after the cohen and levinthal 1990 paper the field is characterized by a wide array of theoretical perspectives and a wealth of empirical evidence in this paper we first review these underlying theories and empirical studies of absorptive capacity given the size and diversity of the absorptive capacity literature we subsequently map the existing terrain of research through a bibliometric analysis the resulting bibliometric cartography shows the major discrepancies in the organization field namely that 1 most attention so far has been focused on the tangible outcomes of absorptive capacity 2 organizational design and individual level antecedents have been relatively neglected in the absorptive capacity literature and 3 the emergence of absorptive capacity from the actions and interactions of individual organizational and interorganizational antecedents remains unclear building on the bibliometric analysis we develop an integrative model that identifies the multilevel antecedents process dimensions and outcomes of absorptive capacity as well as the contextual factors that affect absorptive capacity we argue that realizing the potential of the absorptive capacity concept requires more research that shows how micro antecedents and macro antecedents influence future outcomes such as competitive advantage innovation and firm performance in particular we identify conceptual gaps that may guide future research to fully exploit the absorptive capacity concept in the organization field and to explore future fruitful extensions of the concept

comments by professor james tobin professor tobin was invited to reflect upon the experiment in applied econometrics at the workshop convened to discuss the experiment s results he discussed his education in econometrics and the contexts both economic and technical in which his paper of 1950 on the demand for food was written he outlined the concerns facing econometricians of that time to explain some aspects of his approach and compared these to the worries of the econometricians taking part in the experiment 1997 john wiley sons ltd

the temporal development of strategy patterns in the u k insurance industry much writing in the field of strategic management remains an exercise in comparative statics cross sectional research designs are combined with the static metaphors of contingency thinking to analyse the fit between the positioning and resource base of the firm and its performance in differing environments however the inadequacies of this tradition are increasingly recognised even by scholars who have created it porter 1991 strategy can no longer be conceived through the static language of states or positions and must now be understood as an innovation contest where the bureaucratic and inflexible will not survive this paper takes up the challenge to explore the dynamics of industry and firm strategy development the empirical focus of the paper is the u k insurance industry in a period of upheaval between 1990 and 1996 by means of an innovative cross correlational time series analysis we are able to show the ebb and flow of strategic change in the industry and the patterns of initiation and imitation as certain firms lead areas of strategyand others follow these findings are interrogated and inter preted by drawing on and developing theoretical ideas from three literatures which historically have not talked to one another these are the literatures on innovation institutionalism and contextualism the empirical results show firms pursuing multiple strategies at one point in time and also altering the strategic agenda over time a cross correlational analysis of nine firms in the u k insurance industry reveals the existence of leaders and laggards in the development of a variety of strategic initiatives theoretically the paper examines the mixture of external conditions and internal context and processes which contribute to the development of early and later adopters of strategies in an industry over time

richard stone s contributions to economics richard stone published his first scientific studies in the late 1930s during world war ii he worked on various government assignments his work during this period on national income estimates and more extensive national accounts for england turned out to be of particular importance for future research in economics stone was involved in this work as early as 1940 and carried out pioneering studies in collaboration with j e meade and in contact with j m keynes most of stone s writings are rigorously technical and soberly impersonal however in an article 45 1 on the development and use of national income estimates he added some interesting personal glimpses from this period he also formulated a somewhat more personal creed than is usually found in his works it would seem worthwhile to quote an excerpt anyone who believes in the maintenance of a social economy and the avoidance of the totalitarian direction of all aspects of economic life must be concerned at the present time with the creation of an institutional framework which will permit a social economy with the essential features of free markets free choice of occupations and free choice in the spending of disposable income to function more in accordance with contemporary social ideals in the achievement of this goal and in re drafting the rules of the economic game in such a way that both laissez faire and overall physical control are rejected as a basis for economic organization national income and expenditure studies and their extension to the technique of national budgeting have i believe a great deal to offer stone then went on to discuss how the economy can be made to function more in accordance with contemporary social ideals and referred first and foremost to stabilization of economic activity equalization of income distribution and different forms of intervention in the competitive mechanism

agricultural output and productivity in the former soviet republics the paper reviews agricultural development in the fifteen former soviet republics over the period 1965 1997 production functions are estimated and productivity differences and changes calculated large differences were found in terms of productivity and growth between the republics the differences grew after 1990 reflecting variation in reform policies

on efficient distribution with private information this paper is a study of the dynamics of the efficient distribution of consumption in an exchange economy with many consumers each of whom is subject to private idiosyncratic taste shocks we propose a recursive method for finding feasible allocations that are incentivecompatible and that are pareto optimal within this set the method is applied to several parametric examples we find that in an efficient allocation the degree of inequality continually increases with a diminishing fraction of the population receiving an increasing fraction of the resources we discuss the extent to which these allocations can be decentralized via market arrangements this paper is a study of the dynamics of the efficient distribution of consumption in an exchange economy with private information the economy we study has a constant endowment flow of a single non storable consumption good which is to be allocated each period among a large number of consumers each period these consumers experience unpredictable idiosyncratic privately observed taste shocks affecting their marginal utility of current consumption efficiency dictates that more resources be allocated to those consumers who in any given period have a high marginal utility of current consumption

the terms of trade the real exchange rate and economic fluctuations this paper examines the relationship between terms of trade and business cycles using a three sector intertemporal equilibrium model and a large multicountry database results show that terms of trade shocks account for nearly one half of actual gdp variability the model explains weak correlations between net exports and terms of trade the harberger laursen and metzler effect and produces large and weakly correlated deviations from purchasing power parity and real interest rate parity terms of trade shocks cause real appreciations and positive interest differentials although productivity shocks have opposite effects the puzzle that welfare gains of international asset trading are negligible is left unresolved copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

high performance work practices decentralization and profitability evidence from panel data the aim of this article is to test the effects on firm profitability of the adoption of both high performance work practices hpwps and changes in organizational design relating to the depth of the corporate hierarchy and the allocation of decision authority for this purpose we resort to panel estimates based on a longitudinal data set that includes information relating to 109 italian manufacturing single plant firms observed in the 1990s during 7 years the econometric results show that the adoption of hpwps leads to better performances especially when it is associated with the delegation of decision authority downward the corporate hierarchy copyright 2007 oxford university press

endogenous borrowing constraints with incomplete markets this article develops ways to endogenize the borrowing constraints used in a class of computable incomplete markets models we allow the constraints to depend on an investor s characteristics such as time preference risk aversion and income streams the proposed constraint can be interpreted as a borrowing limit within which an investor has no incentive to default using a numerical algorithm we find that for an array of structural parameters the endogenous borrowing constraints can be much less stringent than the ad hoc borrowing constraints adopted by the existing studies

new organizational forms and strategies for managing in hypercompetitive environments strong forces of change globalization demographic shifts e g aging population and declining fertility rates advances in information technology demassification of society and hypercompetition are reshaping the competitive landscape worldwide as a result companies in most industries are not only undergoing rapid and radical change but are also experiencing a fundamental shift in the rules of competition and the way the game of competition is played the old genteel stable oligopolies that defined competition during the 20th century are rapidly restructuring in their place are emerging markets fraught with uncertainty diverse global players rapid technological change widespread price wars and seemingly endless reorganization that transition is occurring not only in the united states but also in europe latin america and asia in this issue we demonstrate that as predicted by those early researchers a dramatic and far reaching shift has occurred in the nature of competition in most ind

savings investment and international capital flows abstract the high correlation between national savings and domestic investment rateshas been interpreted as evidence that capital is not internationally mobile this paper surveys the theory and evidence on the relationship between savings and investment in a sample of 23 oecd countries a positive correlation between savings and investment rates is found in both the short and long runs however a wide variety of models generate such co movements in savings and investment in response to exogenous disturbances even under conditions of complete financial markets thus the savings investment correlation provides little evidence on the question of international capital mobility

when higher incomes reduce welfare queues labor supply and macro equilibrium in socialist economies starting from a micro model of consumer behavior under rationing by queuing that utilizes gary becker s allocation of time framework we develop a simple macroeconomic model of a socialist economy the length of the queue is the key endogenous variable that equilibrates aggregate supply and aggregate demand comparative statics analysis shows that an increase in wages over money prices brings about longer queues that reduce labor supply output and welfare when shortages grow beyond a certain critical level queues fail to sustain aggregate equilibrium in the economy

feldstein horioka puzzles abstract the high correlation between national saving and investment rates in advanced economies the feldstein horioka puzzle has been referred to as the mother of all puzzles perhaps more puzzling is that for emerging economies saving investment correlations tend to be significantly lower though still positive this deepens the feldstein horioka puzzle because the mobility of capital is generally believed to be much lower in emerging economies than in advanced economies and a country with less mobile capital should have a tighter relationship between local saving and investment rates this paper develops a dsge model that without resorting to any real or financial friction simultaneously explains these two aspects of the feldstein horioka puzzle positive saving investment correlations in both advanced and emerging economies and significantly lower saving investment correlations in emerging economies than in advanced economies the main features of the model include long run risk an endogenous world interest rate and cross correlations of national and global shocks the findings hold for both quarterly time series and long run averages

debt constrained asset markets we develop a theory of general equilibrium with endogenous debt limits in the form of individual rationality constraints similar to those in the dynamic consistency literature if an agent defaults on a contract he can be excluded from future contingent claims markets trading and can have his assets seized he cannot be excluded from spot markets trading however and he has some private endowments that cannot be seized all information is publicly held and common knowledge and there is a complete set of contingent claims markets since there is complete information an agent cannot enter into a contract in which he would have an incentive to default in some state in general there is only partial insurance variations in consumption may be imperfectly correlated across agents interest rates may be lower than they would be without constraints and equilibria may be pareto ranked

international lending and borrowing in a stochastic stationary equilibrium this paper develops a simple general equilibrium model of international borrowing and lending in which national products are subject to random fluctuations international capital flows arise from the efforts of risk averse households in different countries to self insure against random income fluctuations by accumulating foreign claims that can be used to finance a less variable profile of consumption relative to national income in the absence of aggregate uncertainty a stationary rational expectations equilibrium is shown to exist despite the fact that rates of time preference differ among countries a number of results many of which enrich those in the existing literature are obtained copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

investment and saving in angola and the feldstein horioka puzzle this article analyses the relationship between investment and savings for angola using the feldstein horioka puzzle with monthly data from january 2000 to december 2013 integer and fractional integration and cointegration techniques are employed to investigate the relationship between investment and savings several regression specifications are employed concluding that the feldstein horioka puzzle is not validated for the angolan economy policy implications are derived

international lending with moral hazard and risk of repudiation in this paper i examine the constrained optimal pattern of capital flows between a lender and a borrower in an environment in which there are two impediments to forming contracts the first impediment to contracting arises from the assumption that lenders cannot observe whether borrowers invest or consume borrowed funds this assumption leads to a moral hazard problem in investment the second impediment arises from the assumption that the borrower as a sovereign nation may choose to repudiate his debts the optimal contract is shown to specify that the borrowing country experience a capital outflow when the worst realizations of national output occur this seemingly perverse capital outflow forms a necessary part of the optimal solution to the moral hazard problem in investment