money growth output gaps and inflation at low and high frequency spectral estimates for switzerland abstract while central banks generally have abandoned monetary targeting many continue to attach weight to monetary aggregates in setting policy this raises the issue of how money can be combined with other variables when analysing inflation we decompose inflation in switzerland into two frequency bands and show that inflation is granger caused by monetary factors at low frequencies defined as those corresponding to periodicities of more than 4 years but is granger caused by the output gap at high frequencies we also estimate phillips curve models that are augmented by the low frequency components of the monetary factors

integrative capabilities vertical integration and innovation over successive technology lifecycles the analysis presented here provides a new explanation for why vertically integrated and specialized firms may continue to coexist as industries evolve especially during time periods when conditions unequivocally favor lower cost specialized firms in contrast to the common view that firms should match their organizational form to the prevailing nature of technology vertically integrated firms may rationally choose to stay integrated and bear the sunk costs of developing integrative capabilities as well as the ongoing costs of maintaining them even when they lose money during some time periods due to competition from lower cost specialized firms in particular in industries characterized by successive systemic innovations which entail interdependence across stages of production some firms may remain vertically integrated to maintain their capability to innovate over multiple cycles of technological innovation the results hinge on the sunk costs of long lived investments in integrative capabilities an extension to the analysis suggests that vertically integrated firms may retain their organizational form to pioneer systemic innovations in other industries including industries not subject to frequent technology lifecycles providing another explanation of product market diversification and market entry over time

specialized supply firms property rights and firm boundaries the proper specification of intellectual property rights iprs is a delicate and controversial matter in this paper we consider one specialized context in which iprs can add to efficiency we build on contributions of both firm capabilities scholars e g teece pisano et al and property rights economists e g hart to show that iprs can affect efficiency by influencing the location of technological innovation using a simple set up where the key choice is whether a technology intensive input will be supplied by an independent firm or produced in house we analyze how the choice is affected by the strength of iprs and by the existence and nature of information spillovers specifically we show that when the supply relationship is likely to produce new information of value to the supplier stronger property rights favor independent suppliers over vertical integration an important implication of our model backed by empirical case studies is that strong iprs therefore encourage investments in specialized firms with strong firm capabilities in the area of innovative input supply iprs therefore may play a role along with multiple other factors in the location of firm boundaries in some cases this contribution to the viability of small specialized firms with their superior ability to innovate in some cases must be taken into account in evaluating recent criticisms of over fragmented ipr ownership i e the anticommons problem it also contributes to an understanding of iprs in the post chandlerian economy where smaller specialized firms play a prominent role copyright 2004 oxford university press

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

configuration of value chain activities the effect of pre entry capabilities transaction hazards and industry evolution on decisions to internalize we integrate insights from organizational capabilities organizational economics and industry evolution to examine industry entrants boundary choices about value chain activities and test hypotheses in 1978 2009 data from a sample of u s bioethanol producers we find support for our predictions that transaction hazards decomposed as either enduring or transient over the stages of industry evolution are positively associated with the choice to internalize value chain activities pre entry experience in an activity increases the likelihood of its internalization and reduces the effect of enduring transaction hazards on the internalization choice importantly we also distinguish between firm and founder level pre entry capabilities that is the capabilities of firms versus those of founders diversifying entrants with firm level integrative capabilities are more likely to internalize value chain activities than start ups and this effect persists over the industry s life cycle the relationship between pre entry experience with an activity and the likelihood of internalizing it is also stronger for diversifying entrants findings improve understanding of the relationships among capability development boundary choice and industry evolution

technology shocks technological collaboration and innovation outcomes in the early to mid 1990s technology alliances suddenly surged to unprecedented levels roughly 300 growth per year from 1990 to 1995 and then declined just as precipitously this massive increase in alliance activity caused the crystallization of a giant component in the global technology network that connected a large portion of the world s firms government labs universities and other organizations however when alliance activity declined the component disintegrated what caused this spike in alliance activity and did this large but transient change in collaboration activity leave any enduring effect the data here suggest that a major technology shock may have provoked this alliance surge a technology shock may simultaneously unleash significant innovation opportunities while creating great uncertainty in the economic environment though it is well known that firms often use alliances both to respond to uncertainty and facilitate innovation little is known about how technology shocks affect the collaboration behavior of firms and how these two factors separately influence innovation outcomes i integrate an inductive study of collaboration activity and a technology shock with existing research on economics alliances and networks to build a set of arguments about how technology shocks will influence alliance behavior how changes in alliance behavior will influence the global technology collaboration network and about how each of these changes is likely to influence the innovative outcomes of firms i then explore the separate and joint effects of the technology shock and collaboration activity on innovation using a large sample panel study of patenting by north american firms

the hodrick prescott filter the slutzky effect and the distortionary effect of filters abstract i construct a metric based on optimal filtering for measuring the distortionary effect of business cycle filters the distortionary effect of a filter depends both on the power transfer function of the filter and on the spectrum of the filtered time series the metric is used for two purposes first to determine the optimal value of the smoothing parameter in the hodrick prescott filter hp filter secondly to measure the size of distortions of ten different filters the slutzky effect is a special case of a more general pattern of distortions and it is shown that the alleged slutzky effect of the hp filter is due to an insufficient distinction between the effect of filtering with an ideal high pass filter and the distortionary effect of the hp filter

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

efficient patent pools the paper builds a tractable model of patent pools agreements among patent owners to license sets of their patents it provides a necessary and sufficient condition for patent pools to enhance welfare and shows that requiring pool members to be able to independently license patents matters if and only if the pool is otherwise welfare reducing the paper allows patents to differ in importance asymmetric blocking patterns and licensors to also be licensees we undertake some initial exploration of the impact of pools on innovation the analysis has broader applicability than pools being relevant to a number of co marketing arrangements

ideas for rent an overview of markets for technology this article surveys some of the recent literature on technology markets and summarizes its main issues and insights we structure our analysis in three parts the supply and demand of technology the factors that condition the formation and growth of technology markets industry structure and dynamic issues in addition we summarize some of the studies that have tried to document the size and growth of these markets we find that the literature has focused mainly on the supply of technology but several other aspects of these markets remain under studied including the demand for external technology the role of uncertainty in technology markets and the dynamic interaction between industry structure and the market for technology understanding these will illuminate whether markets for technology will continue to grow or remained confined to pockets of the economy copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the new econometrics of structural change dating breaks in u s labor productivity we have seen the emergence of three major innovations in the econometrics of structural change in the past fifteen years 1 tests for a structural break of unknown timing 2 estimation of the timing of a structural break and 3 tests to distinguish unit roots from broken time trends these three innovations have dramatically altered the face of applied time series econometrics in this paper we review these three innovations and illustrate their application through an empirical assessment of u s labor productivity in the manufacturing durables sector

on money and output is money redundant abstract there is an emerging consensus that money can be largely ignored in making monetary policy decisions rudebusch and svensson 1999 policy rules and inflation targeting in taylor j b ed monetary policy rules university of chicago press chicago 203 246 2002 eurosystem monetary targeting lessons from us data european economic review 46 417 442 provide some empirical support for this view we reconsider the role of money and find that money is not redundant more specifically there is a significant statistical relationship between lagged values of money and the output gap even when lagged values of real interest rates and lagged values of the output gap are accounted for we also find that inside and outside money provide significant information in predicting movements in the output gap

standardization in technology based markets abstract the complexity of modern technology especially its system character has led to an increase in the number and variety of standards that affect a single industry or market standards affect the r d production and market penetration stages of economic activity and therefore have a significant collective effect on innovation productivity and market structure standards are classified into product element and nonproduct categories because the two types arise from different technologies and require different formulation and implementation strategies because standards are a form of technical infrastructure they have considerable public good content research policy must therefore include standardization in analyses of technology based growth issues

technology adoption in the presence of network externalities we analyze technology adoption in industries where network externalities are significant the pattern of adoption depends on whether technologies are sponsored a sponsor is an entity that has property rights to the technology and hence is willing to make investments to promote it key findings include the following 1 compatibility tends to be undersupplied by the market but excessive standardization can occur 2 in the absence of sponsors the technology superior today has a strategic advantage and is likely to dominate the market 3 when one of two rival technologies is sponsored that technology has a strategic advantage and may be adopted even if it is inferior 4 when two competing technologies both are sponsored the technology that will be superior tomorrow has a strategic advantage

technology success and failure in winner take all markets the impact of learning orientation timing and network externalities in industries characterized by network externalities a single technology standard often rises to dominance locking out competing technologies this research demonstrates that despite path depend

money output and inflation in the longer term major industrial countries 1880 2001 i introduction the empirical role of money growth in the macroeconomy has been studied by many researchers using different data and methods the most prominent studies focusing on the quantity theory of money are those of friedman and schwartz 1963 1982 using data averaged over the phases of the business cycle in order to capture longer run movements with u s and u k data back to 1867 the study by mccandless and weber 2001 is a representative example for a different approach for 110 countries in the post wwii period longer run growth rates are approximated by growth of a variable over a 30 year period average growth rates 1 the problem with phase averaging is that it does not deal with possible nonstationarity of the data 2 the problem with growth averages over long periods while informative to a degree is that they have limitations too it is impossible to assess the timing of movements in these variables 3 in the frequency domain the long run is associated with frequency zero which in our terminology is the long run trend previous studies in the frequency domain on the long run neutrality of money at zero frequency include the studies of lucas 1980 and geweke 1986 the theory of spectral analysis provides a rigorous framework for extracting specific frequency bands from the data instead of considering only frequency zero stock and watson 1998 applied the band pass filter of baxter and king 1999 to extract cycles frequency bands for u s data and focused on the business cycle and on mostly the post wwii period christiano and fitzgerald 2003 proposed an improved band pass filter and provided an application to the longer run relation of money and inflation for bands of 8 20 years and 20 40 years in the united states from 1900 to 1997 4 the usefulness of monetary aggregates for conducting monetary policy has been seriously called into question because of the instability of money demand a prominent empirical study is that of estrella and mishkin 1997 recent mainstream new keynesian models have no explicit role for money woodford 2008 a contrasting view is that the longer term role of money is still of relevance for monetary policy the european central bank explicitly emphasizes a supporting role that monetary aggregates should play in order to provide an anchor for inflation expectations hafer haslag and jones 2007 issing 2006 king 2002 nelson 2003 christiano motto and rostagno 2007 provided a theoretical new keynesian model where inflation expectations lose their anchor unless money is monitored and reacted to also beck and wieland 2008 presented a new keynesian model where cross checking with money growth movements improves inflation control similarly assenmacher wesche and gerlach 2006 2007 found a significant role for a low frequency low pass filtered component of money in the empirical new keynesian phillips curve equation 5 in the spirit of friedman 1961 we use long time spans so that our results are unlikely to be because of a specific policy rule in place in a given period we have 122 years of annual data from 1880 to 2001 before the introduction of the euro in 2002 we have real gross domestic product gdp money and consumer price indices cpis with no gaps for 11 industrialized countries 6 the countries included in our study differ in such terms as their institutions fiscal and monetary policies and economic growth rates nonetheless at least in peace time they were similar in generally having comparatively free markets in which prices and interest rates were determined our aim is to apply analytic methods that are free from economic and statistical models as much as possible in order to explore empirical regularities or stylized facts in the data also the focus of our research is the longer run we employ band pass filters to pick out cycles from each time series that last 8 40 years that is the longer term component

horizontal and vertical integration in securities trading and settlement this paper addresses a very european issue the consolidation of securities trading and settlement infrastructures in a two country model we analyze welfare implications of different types of consolidation we find that in our model full technical horizontal integration of settlement systems is better than vertical integration of exchanges and settlement systems but vertical integration is still better than no consolidation these findings have clear policy implications with regards to the highly fragmented european securities infrastructure

collaborative promotion of technology standards and the impact on innovation industry structure and organizational capabilities evidence from modern patent pools this study explores the impact of modern patent pools inter organizational collaborative arrangements for promoting the adoption of technology standards on the rate of follow on innovations based on pooled technologies the vertical structure of associated industries and organizational capabilities of noncollaborating firms on one hand the formation of modern pools can boost follow on innovation by lowering the search negotiation and licensing costs associated with pooled standards on the other hand modern pools may decrease the incentives to invest in follow on innovations because of cannibalization risks and grant back provisions to the extent that modern pools succeed in establishing a dominant standard their collaborative nature and their reliance on markets for technology can reduce technological uncertainty and appropriation hazards hence triggering vertical disintegration in related industries moreover by establishing a dominant standard modern pools can effectively diminish the relati

a penny for your quotes patent citations and the value of innovations the use ofpatents in economic research has been seriously hindered by the fact that patents vary enormously in their importance or value and hence simple patent counts cannot be informative about innovative output the purpose of this article is to put forward patent counts weighted by citations as indicators of the value of innovations thereby overcoming the limitations of simple counts the empirical analysis of a particular innovation computed tomography scanners indeed shows a close association between citation based patent indices and independent measures of the social value of innovations in that field moreover the weighting scheme appears to be nonlinear increasing in the number of citations implying that the informational content of citations rises at the margin as in previous studies simple patent counts are found to be highly correlated with contemporaneous rd however here the association is within afield over time rather than cross sectional

money inflation and output under fiat and commodity standards we examine the behavior of money inflation and output under fiat and commodity standards to better understand how changes in monetary policy affect economic activity using long term historical data for 15 countries we find that under fiat standards the growth rates of various monetary aggregates are more highly correlated with inflation and with each other than under commodity standards money growth inflation and output growth are also higher in contrast we do not find that money growth is more highly correlated with output growth under one standard than under the other

capabilities transaction costs and firm boundaries although the literature on firm boundaries has been greatly influenced by transaction cost economics strategy scholars often emphasize the importance of capabilities considerations in these decisions this has led to a debate that we suggest has generated more heat than light we argue that the two sets of considerations are in fact so intertwined dynamically that treating them as independent competitive explanations is fundamentally misleading we offer a theoretical synthesis of transaction cost and capabilities approaches to firm boundaries that seeks to overcome each approach s limitations and provides a unified and logically consistent understanding of boundary decisions

systems competition and network effects this paper discusses firm behavior market performance and the public and private institutions that arise in systems markets i e markets where consumers use compatible components together to generate benefits in such markets which include communications networks and hardware software networks popular products are inherently more valuable these network effects can drive corporate strategies and are critical in understanding innovation in many high technology markets the discussion here emphasizes the dynamics of consumer adoption decisions in the presence of network effects competition between incompatible systems and how suppliers choose which components are compatible and which are not

foreign counterfeiting of status goods we study the positive and normative effects of counterfeiting i e trademark infringement in markets where consumers are not deceived by forgeries consumers are willing to pay more for counterfeits than for generic merchandise of similar quality because they value the prestige associated with brand name trademarks counterfeiters of status goods impose a negative externality on consumers of genuine items as fakes degrade the status associated with a given label but counterfeits allow consumers to unbundle the status and quality attributes of the brand name products and alter the competition among oligopolistic trademark owners we analyze two policies designed to combat counterfeiting enforcement policy which increases the likelihood of confiscation of illegal items and the imposition of a tariff on low quality imports