the impact of the german feed in tariff scheme on innovation evidence based on patent filings in renewable energy technologies abstract over the last two decades feed in tariffs have pushed the massive expansion of electricity from renewable energy sources in germany between 1991 and 1999 feed in tariffs were prescribed through the electricity feed in law the so called stromeinspeisungsgesetz seg at relatively moderate rates from 2000 onwards the seg was replaced by the renewable energy sources act the so called erneuerbare energien gesetz eeg with much higher subsidy rates the rise in subsidies to renewable power generation under the eeg came along with a substantial increase in electricity prices provoking an intense public debate on the benefits of renewable energy promotion in our regression analysis we assess one popular justification for feed in tariffs the demand side effect of induced innovation we find that the innovation impact of the german feed in tariff scheme over the last two decades supports the positive innovation hypothesis however the inducement effect of the feed in tariff scheme under the eeg is not significantly different from that of the seg given the drastic cost of the eeg we caution against the appraisal of the eeg feed in tariff scheme solely on the grounds of its impact on technological innovation

the impact of the eu emissions trading system on low carbon technological change the empirical evidence abstract this paper reviews the empirical literature analysing the effects of the eu emissions trading system eu ets on low carbon technological change the emerging evidence is assessed with references to both relevant economic concepts and the evolving regulation of the eu ets through the years the two most robust indications of the literature are a free allocation grandfathering tended to hamper low carbon investments in phases i 2005 2007 and ii 2008 2012 and b the eu ets appears to have been relatively more effective in stimulating innovation of low carbon technologies than their adoption importantly however a complete general picture of the impact of the eu ets on low carbon technological change is missing the main gap regards the lack of empirical evidence for phase iii 2013 2020 especially econometric studies are only few due to the lack of suitable databases accessible to researchers a problem that the relevant public authorities are urged to address thanks to the recent reforms of the eu ets the incentives for innovation and adoption of low carbon technologies are probably stronger today than ever before

a new look at the returns and risks to pharmaceutical r d this study investigates the returns to r d for 100 new drugs introduced into the united states during the decade of the 1970s in contrast to prior studies it incorporates several significant structural changes that have occurred in the pharmaceutical industry during the 1980s these include higher real drug prices and a greater degree of generic competition a major finding is that the return on r d for the average new drug is approximately equal to the 9 percent industry cost of capital however the performance of new drugs introduced during the latter half of the 1970s was markedly better than that of early 1970s introductions this latter finding is consistent with the more rapid rate of industry growth in real r d expenditures the study also finds that the variation in returns is highly skewed with only the top 30 drugs covering mean r d costs on a fully allocated basis finally it is shown that real drug price increases in the 1980s were necessary for the average new drug introduction to recover its r d costs

the changing empirical definition of money some estimates from a model of the demand for money substitutes interest bearing checkable deposits are examined to test whether they should be included in measures of the u s money stock both divisia and traditional simple sum aggregates are constructed on the basis of tests for weak separability in a model of the demand for financial assets using nonparametric demand analysis we find that several groups of assets are compatible with aggregation theory we find empirical support for a narrow measure consisting of the components of current mia in tests based on a st louis equation and in terms of controllability a divisia aggregate performs better than the simple sum mia measure

is there a role for monetary aggregates in the conduct of monetary policy abstract we examine the potential policy role of monetary aggregates by attempting to use them as effectively as possible in the analysis of empirical relationships we focus on their role as information variables since any more ambitious use such as in a policy rule would presuppose some information content in the aggregates our results show that in the united states since 1979 the monetary aggregates fall considerably short of those requirements and results with german m3 are hardly more favorable we also investigate whether empirical relationships are not reflective of information relationships because of the use of these variables in countercyclical policy the results are not consistent with that interpretation

the price of innovation new estimates of drug development costs the research and development costs of 68 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms these data were used to estimate the average pre tax cost of new drug development the costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval the estimated average out of pocket cost per new drug is us 403 million 2000 dollars capitalizing out of pocket costs to the point of marketing approval at a real discount rate of 11 yields a total pre approval cost estimate of us 802 million 2000 dollars when compared to the results of an earlier study with a similar methodology total capitalized costs were shown to have increased at an annual rate of 7 4 above general price inflation 2003 elsevier science b v all rights reserved

the impact of national research funds a regression discontinuity approach to the chilean fondecyt this paper analyzes the role of national research funds in promoting scientific production in emerging economies the study focuses on the impact of the chilean national science and technology research fund fondecyt the analysis uses data drawn from international sources of bibliometric information combined with the administrative records of the program s executing unit to measure the program s impact we implement a regression discontinuity rd design on principal researchers who applied for funding between 1988 and 1997 considering as outcomes both quantity publications up to 2002 and quality citations up to 2005 of their scientific production our results show significant and positive impact in terms of publications but no impact in terms of quality of scientific production in the proximity of the program s threshold ranking

why are some independent inventors heroes and others hobbyists the moderating role of technological diversity and specialization abstract despite a substantial body of research investigating the market significance of inventions by independent inventors relatively little attention has been devoted to understanding their technological significance a recent study conducted by dahlin k taylor m fichman m 2004 today s edisons or weekend hobbyists technical impact and success of inventions by independent inventors res policy 33 1167 1183 on the tennis racket industry shows that independent inventors are a heterogeneous group which includes both heroes who contribute substantially to technological progress and hobbyists who make only a marginal contribution what is not asked and therefore not explained is why this distinction arises in this paper we focus on the type of prior technological knowledge in terms of technological specialization and diversity applied by independent inventors and their corporate counterparts as a factor explaining differences in technological impact our empirical setting is the field of medical equipment technology we find that independent inventors are more sensitive to the negative effects of technological diversity than their corporate counterparts furthermore our study reveals that technological specialization pays off more for independent inventors than for their corporate counterparts therefore those independent inventors who apply low degrees of diversity and high degrees of specialization are capable of reaching the same level as or even outperforming their corporate counterparts thus becoming heroes based on our findings we discuss implications for research and corporate practice

an admissible monetary aggregate for the united kingdom this paper evaluates the performance of a monetary aggregate that is constructed from principles of economic and index number theory results from tests for weak separability indicate that wholesale deposits should not be aggregated with other u k financial assets they currently are included however in broad monetary aggregates published by the bank of england financial asset groupings passing the weak separability tests then were aggregated using both simple sum and divisia weights in each case the divisia aggregates were more closely related to the growth of nominal gdp and had stable demand for money functions copyright 1991 by mit press

does a cointegrating m2 demand relation really exist in the united states this paper reexamines evidence on m2 demand cointegration in the postwar united states equilibrium relations between m2 and various sets of its determinants are analyzed using quarterly observations from 1959 1 to 1988 4 1990 4 and 1993 4 based on three different testing methods for earlier subsamples mixed results are obtained suggesting both cointegration and no cointegration for the full sample however virtually no evidence supports cointegration accordingly a m2 error correction model is no longer appropriate to investigate short run dynamics of business fluctuations in the 1990s copyright 1996 by ohio state university press

the private financial gains to entrepreneurship is it a good use of public money to encourage individuals to become entrepreneurs recent evidence comparing earnings from entrepreneurship versus wage earning shows that after allowing for obvious observable differences most entrepreneurs in most developed countries earn less than similar wage earning employees does this mean that the decision to become an entrepreneur should be discouraged the answer depends in part on whether we believe that entrepreneurs report their income truthfully or not adjusting for what is considered to be underreporting by entrepreneurs lifts entrepreneurial earnings by between 10 and 40 reversing the fortunes of the entrepreneur such that they appear to be earning much more than their counterparts in a wage earning job if this adjustment should prove to be appropriate then there is no obvious reason to increase the incentive for individuals to become entrepreneurs such as with tax breaks or direct start up subsidies in developed countries and there is reason instead to discuss decreasing these subsidies

family firms and r d behavior new evidence from a large scale survey abstract this paper analyzes how founders and their families influence r d intensity information on r d comes from a large scale bi annual survey among listed german firms we find that r d intensity is higher in firms that are actively managed by the family the impact of family control via voting rights is negative but mostly not significant while this negative family control effect is in line with hitherto existing literature the positive impact of family management is surprising indeed this positive effect disappears if we follow previous research and use r d information from financial statements we show that this puzzling result is related to corporate opacity opaque family managed firms report too conservative r d expenditures especially if they face financial constraints this leads to an under estimation of r d intensity in these firms if accounting figures are used

a semi nonparametric approach to the demand for uk monetary assets we estimate an asymptotically ideal model of the demand for uk personal sector monetary assets we use data that are consistent with utility maximizing behaviour and find that uk monetary assets are generally substitutes in use the estimated elasticities of substitution during the 1980s and the early 1990s indicate that a relatively broad monetary aggregate should be used in economic studies the results also suggest that any policy based on interest or user cost elasticities of substitution between financial assets should be based on the morishima elasticities as the allen uzawa calculation can give misleading results

material flows and economic models an analytical comparison of sfa lca and partial equilibrium models abstract the growing concern for environmental problems in the current economy has spurred the study of the way materials and substances flow through the economy resulting in many different types of analysis since all of these have their merits and shortcomings much of the present theoretical research seems to be focusing on combining the best aspects of each model type into an integrated model the aim of this paper is to make a first step in bridging the gap between the various types of analysis of material flows in the economy by discussing the main differences and similarities of three often employed model types substance flow analysis life cycle assessment and partial economic equilibrium analysis instead of submitting each model to a lengthy theoretical discussion we apply them to a single hypothetical example of a pollution problem by doing so we are able to evaluate the differences and similarities of the methods and results of the model in a practical way it appears that the results of the three models are complementary rather than contradictory each of them puts an emphasis on different aspects of the real world a sequential application of a number of limited models may therefore be an approach that provides more useful information than the tedious construction and application of an encompassing model that integrates these models

government deficits private investment and the current account an intertemporal disequilibrium analysis this paper uses a model with full intertemporal optimization and fischer gray type short run real wage rigidities to demonstrate effects of deficit spending in different employment regimes this study attempts to bring the two strands of short run aggregate demand effects and certain intertemporal aspects together it analyses fiscal policy in the context of a model with full intertemporal optimization underlying private behavior which allows the paper to deal with the intertemporal aspects but it also explicitly incorporates the possibility of short run labour and goods market disequilibrium caused by fischer 1977 gray 1978 type contract based real wage rigidities and within period downward price inflexibility prices are however assumed to be flexible upward in a departure of the standard disequilibrium literature in section 2 the basic model is presented the paper uses a two period full optimization set up where wages and prices are set at the beginning of each period using all available information fiscal policy effects under keynesian unemployment are analyzed in section 3 while section 4 looks at the case of classical unemployment section 5 concludes

innovation in the pharmaceutical industry new estimates of r d costs the research and development costs of 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms these data were used to estimate the average pre tax cost of new drug and biologics development the costs of compounds abandoned during testing were linked to the costs of compounds that obtained marketing approval the estimated average out of pocket cost per approved new compound is 1395 million 2013 dollars capitalizing out of pocket costs to the point of marketing approval at a real discount rate of 10 5 yields a total pre approval cost estimate of 2558 million 2013 dollars when compared to the results of the previous study in this series total capitalized costs were shown to have increased at an annual rate of 8 5 above general price inflation adding an estimate of post approval r d costs increases the cost estimate to 2870 million 2013 dollars

the acquisition and commercialization of invention in american manufacturing incidence and impact abstract recent accounts suggest the development and commercialization of invention has become more open greater division of labor between inventors and innovators can enhance social welfare through gains from trade and economies of specialization moreover this extensive reliance upon outside sources for invention also suggests that understanding the factors that condition the extramural supply of inventions to innovators is crucial to understanding the determinants of the rate and direction of innovative activity this paper reports on a recent survey of over 5000 american manufacturing sector firms on the extent to which innovators rely upon external sources of invention our results indicate that between 2007 and 2009 16 of manufacturing firms had innovated meaning had introduced a product that was new to the industry of these 49 report that their most important new product had originated from an outside source notably customers suppliers and technology specialists i e universities independent inventors and r d contractors we also compare the contribution of each source to innovation in the us economy although customers are the most common outside source inventions acquired from technology specialists tend to be the more economically significant in term of their gross commercial value as a group external sources of invention make a significant contribution to the overall rate of innovation in the economy innovation policies both public and private should pay careful attention to the external supply of invention and the efficiency of the mechanisms affecting the relationships between inventors and innovators

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

r d in smes a paradox this paper has three objectives 1 to survey the relevant literature addressing the apparent paradox of research development investments carried out within small and medium enterprises 2 to provide focused summaries of the articles in this special issue 3 to draw some general conclusions in terms of policy implications

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

environmental policy stringency and technological innovation evidence from survey data and patent counts this article uses patent data to examine the impact of public environmental policy on innovations in environment related technology the analysis is conducted using data on an unbalanced panel of 77 countries between 2001 and 2007 drawing upon data obtained from the european patent office epo world patent statistical patstat database and the world economic forum s wef executive opinion survey the results support our hypotheses concerning the positive role of both general innovative capacity and environmental policy stringency on environment related innovation a subsequent two stage model assesses the factors which drive innovation in general and uses the fitted values to estimate environmental innovation while the analysis is conducted on a smaller sample they confirm the findings of the reduced form model

should bond funds be added to m2 abstract in the early 1990s m2 growth has been weaker than estimated while bond mutual funds have grown rapidly this study assesses whether adding bond funds to m2 would yield a monetary aggregate that is more explainable using a standard error correction model of money with and without modifications for bond interest rate and thrift resolution effects results indicate that it is important to net out institutional and ira keogh assets from bond funds as is done for m2 and that adding such a bond fund series to m2 results in an aggregate that is somewhat more explainable than m2

technology policy for a world of skew distributed outcomes abstract this paper draws implications for technology policy from evidence on the size distribution of returns from eight sets of data on inventions and innovations attributable to private sector firms and universities the distributions are all highly skew the top 10 of sample members captured from 48 to 93 percent of total sample returns it follows that programs seeking to advance technology should not be judged negatively if they lead to numerous economic failures rather emphasis should be placed on the relatively few big successes to achieve noteworthy success with appreciable confidence a sizeable array of projects must often be supported the outcome distributions are sufficiently skewed that even with large numbers of projects it is not possible to diversify away substantial residual variability through portfolio strategies

admissible monetary aggregates for the euro area we use the fleissig and whitney fleissig a r whitney g a 2003 a new pc based test for varian s weak separability conditions journal of business and economics statistics 21 1 133 144 weak separability test to determine admissible levels of monetary aggregation for the euro area we find that the euro area monetary assets in m2 and m3 are weakly separable and construct admissible divisia monetary aggregates for these assets we show that real growth of the admissible divisia aggregates enters the euro area is curve positively and significantly for the period from 1980 to 2005 out of sample we show that divisia m2 and m3 appear to contain useful information for forecasting euro area inflation

a real options perspective on r d portfolio diversification abstract this paper shows that the conditionality of investment decisions in r d has a critical impact on portfolio risk and implies that traditional diversification strategies should be reevaluated when a portfolio is constructed real option theory argues that research projects have conditional or option like risk and return properties and are different from unconditional projects although the risk of a portfolio always depends on the correlation between projects a portfolio of conditional r d projects with real option characteristics has a fundamentally different risk than a portfolio of unconditional projects when conditional r d projects are negatively correlated diversification only slightly reduces portfolio risk when projects are positively correlated however diversification proves more effective than conventional tools predict

towards an ecological theory of unequal exchange articulating world system theory and ecological economics abstract the focus of this paper is on how an ecological perspective might provide us with an analytically more precise way of defining unequal exchange it is only by looking at the ecological conditions of human economies that we can adequately conceptualize the mechanisms which generate inequalities in distribution considerations of market power aside neoclassical economic ideology has dispelled all possible criteria for assessing a market transaction as unequal or unfair one way to assess the occurrence of unequal exchange may be to look at the direction of net flows of energy and materials concrete productive potential but without falling into the trap of equating productive potential with economic value on the contrary it can be analytically demonstrated that unequal exchange emerges from a kind of inverse relationship between productive potential and economic value the notion of a reasonable market price conceals the fact that what is being exchanged are intact resources for products representing resources already spent if we consider longitudinally along the production process any given set of fuels and raw materials destined to be transformed into a given product plus waste its content of available energy will be inversely related to its utility or price in other words the more of its original energy that has been dissipated the higher its price this means that production i e the dissipation of resources will continuously be rewarded with ever more resources to dissipate generating ecological destruction and global core periphery inequalities as two sides of the same coin

the embodiment of knowledge universities as engines of growth as universities open themselves up to the marketplace for knowledge and ideas to a greater degree than in the past debates over university missions has been common how can universities match their third mission contribution to society with their main missions of education and curiosity driven basic research to achieve their full growth potential this will require a change in policy attention from targeting university patenting and faculty spin offs to taking a broader view on universities contribution to economic development including other pathways most notably collaborative modes and mobility of trained human capital from academe to industry

the optimal level of monetary aggregation in this paper i have three objectives 1 to describe the aggregation theoretic procedure for selecting the optimal monetary aggregates 2 to survey the available empirical evidence for information on the optimal aggregates and 3 to describe the procedures that should be followed to complete a redefinition of the monetary aggregates although all of the federal reserve board s current official aggregates are rejected as targets some newer aggregates are found to be substantially preferable to the official aggregates the board s staff recently completed the official redefinition of its monetary aggregates in a manner largely unrelated to aggregation and index number theory my own research in recent years has sought to remedy that shortcoming except for monetary aggregates most of the data provided by governmental agencies are constructed in accordance with aggregation and index number theory since aggregation theory can be applied to monetary aggregation 1 i constructed new monetary aggregates that are consistent with the economic theory 2 recently the empiri

risky innovation the impact of internal and external r d strategies upon the distribution of returns a b s t r a c t external innovation increases the profits of the median firm but also increases dispersion and the kur tosis of the distribution of profits this means that external strategies are risky and may require a very large number of attempts before average returns are obtained this puts smaller firms into a position of disproportionately high risk despite the earlier evidence that the rewards from innovation are positively skewed we find no effect of innovation strategies upon the skewness of the distribution of firms profits

valuing patents on cost reducing technology a case study we present an approach for valuing patents on production process improvements specifically we focus on valuing a patent on cost reducing process improvements from the viewpoint of the patent holding firm we do this by considering the relevant cash flows that result from owning the patent the patent value is determined by 1 licensing fees and royalty income 2 competitive advantage resulting from the patent 3 patent maintenance costs we discuss a case study that presents the difficulties and challenges in finding the relevant information that is needed to estimate the cash flows we show that valuation of patents on production process improvements cannot be done without good knowledge of technology markets and competitors

university patenting and its effects on academic research the emerging european evidence this paper surveys the existing fragmentary data on the growth of university owned patents and university invented patents in europe we find evidence that university patenting is growing but this phenomenon remains heterogeneous across countries and disciplines we found some evidence that university licensing is not profitable for most universities although some do succeed in attracting substantial additional revenues this might be due to the fact that patents and publications tend to go hand in hand in a dynamic setting however we fear that the increase in university patenting exacerbates differences across universities in terms of financial resources and research outcome

the impact of r d cooperations and mergers in pharmaceuticals on research activities and drugs offered on the market in the last 10 years the pharmaceutical industry has experienced steep unprecedented price increases which are frequently attributed to increasing drug development costs to cope with rocketing development costs companies engage in research and development r d cooperations we study the impact of r d cooperations on firms research activities and drugs offered on the market using a comprehensive dataset we find that r d cooperations formed at the early stage of the drug development process increase the number of r d projects and the number of drugs offered on the market late stage r d cooperations formed among larger firms in technology and product markets increase firms research activities but reduce the number of drugs launched on the product market results suggest that large firms cooperating in the late research stage re optimize their r d pipelines and eliminate similarly aligned research projects

returns to r d on new drug introductions in the 1980s abstract this study finds that the mean irr for 1980 1984 u s new drug introductions is 11 1 and the mean npv is 22 million 1990 dollars the distribution of returns is highly skewed the results are robust to plausible changes in the baseline assumptions our work is also compared with a 1993 study by the ota despite some important differences in assumptions both studies imply that returns for the average nce are within one percentage point of the industry s cost of capital this is much less than what is typically observed in analyses based on accounting data

results of a study of the stability of cointegrating relations comprised of broad monetary aggregates abstract we find strong evidence of a stable money demand relationship for mzm and m2m through the 1990s though the m2 relation breaks down somewhere around 1990 evidence has been accumulating that the disturbance is well characterized as a permanent upward shift in m2 velocity which began around 1990 and was largely over by 1994 taken together our results support the hypothesis that households permanently reallocated a portion of their wealth from time deposits to mutual funds although this reallocation may have been induced by depository restructuring we argue that the substitution could be explained by appropriately measured opportunity cost

estimates of the value of patent rights in european countries during the post 1950 period this paper examines the distribution of the values of patent rights in the united kingdom france and germany during the post 1950 period these values are inferred from the behavior of patentees with respect to payment of renewal fees on their patents a simple economic model of renewal decisions is combined with data on the proportion of patents renewed at alternative ages and the renewal fee schedules to produce estimates of the distribution and the total value of patent rights in these countries moreover the data indicate that there have been changes in the value distribution and we follow these changes over the period the empirical results of particular interest concern the total value of patent rights and the relationship between changes in it and changes in the quantity of patents the skew in the distribution of patent values and the rate of obsolescence on the returns to patents

on the distribution of patent citations and its fundamentals this paper analyzes features of the distribution of 3 7 mn patent family applications from patstat in 34 countries 17 industries and 11 years power law regressions suggest that higher levels of r d intensity and outward foreign direct investment in a country and sector are associated with a reduced concentration of patent citations

measuring money growth when financial markets are changing abstract this article considers constructing monetary aggregates in the presence of financial market innovations and changes in the relationship between individual assets and output we propose two procedures for constructing a monetary aggregate with the objective of providing a reliable monetary leading indicator of nominal gdp in the first subaggregates discretely switch in and out in the second the aggregate s growth is a time varying weighted average of the growth of the subaggregates where the weights follow a multivariate random walk these procedures are used to examine augmenting m2 with stock and or bond mutual funds the alternative aggregates are broadly similar to m2 but during 1992 1993 they outperform m2

patents as options some estimates of the value of holding european patent stocks in many countries holders of patents must pay an annual renewal fee in order to keep their patents in force this paper uses data on the proportion of patents renewed and the renewal fees faced by post world war ii cohorts of patents in france the united kingdom and germany in conjunction with a model of patent holders renewal decisions to estimate the returns earned from holding patents in these countries since patents are often applied for at a nearly stage in the innovation process the model allows agents to be uncertain about the sequence of returns that will be earned if the patent is kept inforce formally then the paper presents and solves a discrete choice optimal stochastic control model derives the implications of the model on aggregate behaviour and then estimates the parameters of the model from aggregate data the estimates enable a detailed description of the evolution of the distribution of returns earned from holding patents over their life spans and calculations of both the annual returns earned from holding the patents still in force or the patent stocks in the alternative countries and the distribution of the discounted value of returns earned from holding the patents in a cohort this abstract was borrowed from another version of this item

monetary aggregates as indicators of economic activity in canada empirical evidence empirical evidence linking monetary aggregates to variables such as inflation and economic growth has weakened over the past two decades in this study we re examine these relationships by creating composite monetary aggregates that switch among existing monetary aggregates using quarterly data over the sample 1971 99 overall composite monetary aggregates appear to be useful in explaining or forecasting short run movements in gdp growth and inflation also the most successful composite monetary aggregates produce switch dates that overlap with the introduction of financial innovations these subsequently prompted the bank of canada to revise or introduce new monetary aggregates jel classification e51 e52 c52 c53 les agregats monetaires en tant qu indicateurs de l activiteeconomique resultats empiriques les resultats empiriques jaugeant les liens entre les agregats monetaires et des variables telles que l inflation et la croissance economique montrent que ces liens se sont affaiblis au cours des deux dernieres decennies ce memoire examine ces relations en creant des agregats monetaires composites qui se deplacent entre les agregats usuels selon certains criteres statistiques l etude utilise des donnees trimestrielles pour la periode 1971 99 dans l ensemble les agregats monetaires composites semblent plus utiles pour expliquer ou prevoir les mouvements a court terme dans le niveau de croissance du pib et de l inflation de plus les agregats monetaires composites qui ont le plus de succes suggerent des moments de deplacement qui correspondent a des discontinuites marquant la mise en place d innovations financieres celles ci ont entraine la banque du canada a reviser les agregats monetaires usuels ou a en suggerer de nouveaux

experiential learning competitive selection and downside risk a new perspective on managerial risk taking it is part of managerial wisdom that managers need to take risks in order to succeed this is in stark contrast to the prominent agent based theories of experiential learning and competitive selection that are known to be biased against risky alternatives in the long run how can the positive managerial view on risk taking prevail given these results qualitative surveys of managers suggest risks to be acceptable if their outcome distribution meets certain criteria we argue in this paper that these criteria are widely congruent with low downside risk using a novel simulation design we analyze the effects of experiential learning and competitive selection on downside risk preferences in an ecology of agents in the long run experiential learning implies weak downside risk seeking whereas competitive selection leads to strong downside risk aversion furthermore competitive selection leads to the prevalence of outcome distributions with low downside risk in an ecology even if they have a significantly higher level of total risk than comparable distributions with more downside risk we draw implications for empirical studies on managerial behavior the online appendix is available at https doi org 10 1287 orsc 2017 1149

international copper flow network a blockmodel analysis industrial ecology is looking for new tools to combine social and economic dimensions with the already well developed physical flow analysis of the human economic system this article introduces a tool from social network analysis as complementary to the existing multilevel substance flow analysis by exploring the concept of space and region in which substance flows happen we use the blockmodel from network analysis in the characterization of the multilevel anthropogenic copper cycle to group countries according to their structural equivalence in the international trade networks related to copper instead of using a priori aggregation standards such as geographical proximity gdp per capita or widely accepted classification of industrial developing countries this approach depicts the patterns of material movement through trade which reflects the inherent structure of the world system regarding copper production and consumption the results highlight the uneven distribution of global copper stocks and flows across countries in the middle 1990s and illustrate the core peripheral structure among different country groups in which a close interconnected core exist with sparse ties to peripheral groups and copper are flowing from the peripheral to the core in terms of net flows

the value of u s patents by owner and patent characteristics abstract this paper uses renewal data to estimate the value of u s patents controlling for patent and owner characteristics estimates of u s patent value are substantially larger than estimates for european patents however the ratio of u s patent value to r d for firms is only about 3 contrary to a common assertion patents issued to small patentees are much less valuable than those issued to large corporations litigated patents are more valuable as are highly cited patents however patent citations explain little variance in value suggesting limits to their use as a measure of patent quality

late stage pharmaceutical r d and pricing policies under two stage regulation 2016 elsevier b v we present a model combining the two regulatory stages relevant to the approval of a new health technology the authorisation of its commercialisation and the insurer s decision about whether to reimburse its cost we show that the degree of uncertainty concerning the true value of the insurer s maximum willingness to pay for a unit increase in effectiveness has a non monotonic impact on the optimal price of the innovation the firm s expected profit and the optimal sample size of the clinical trial a key result is that there exists a range of values of the uncertainty parameter over which a reduction in uncertainty benefits the firm the insurer and patients we consider how different policy parameters may be used as incentive mechanisms and the incentives to invest in r d for marginal projects such as those targeting rare diseases the model is calibrated using data on a new treatment for cystic fibrosis

are risky assets substitutes for monetary assets i introduction financial innovation over the past couple of decades has enhanced the liquidity of many financial assets particularly noncapital certain risky assets further financial assets previously not regarded as monetary assets such as mutual funds and particularly money market mutual funds now provide monetary services such as liquidity and transactions services l given the increased liquidity of such funds the question arises as to whether risky assets are substitutes for capital certain monetary assets if noncapital certain assets are indeed substitutes for capital certain assets and are also being used for transactions purposes then agents may be treating risky assets as money although this issue has been addressed in the united states in the context of the addition of bond funds to m2 by for example duca 1995 no such research has yet been conducted in the united kingdom including risky assets in the analysis contradicts the work of ando and shell 1975 spencer 1986 appendix i pp 184 93 and spencer 1994 broadly they argue that since some nonrisky assets provide monetary services and probability also liquidity individuals would not hold risky assets for these purposes 2 in contrast hicks 1935 states that falling transaction costs and rising wealth encourages individuals to increase the proportion of risky assets in portfolio holdings most studies generally assume that risky assets fail to provide significant monetary services and for example have been excluded from the asset demand analysis of barr and cuthbertson 1991a drake fleissig and swofford 1997 and money demand studies such as taylor 1987 belongia and chrystal 1991 drake and chrystal 1994 and drake 1996 alternatively barr and cuthbertson 1991b use only risky assets in their asset demand system analysis the degree of substitution between risky assets and capital certain assets is an empirical issue while noncapital certain risky assets mutual funds and other financial assets may well be becoming closer substitutes for what people are using as money they are in no way perfect substitutes for the highly liquid cash assets to evaluate the role of noncapital certain assets we construct a noncapital certain risky divisia aggregate consisting of equities government bonds and unit trusts the divisia index allows for less than perfect substitution between assets and weights component assets according to their differing degrees of moneyness which may vary over time due to many factors for example financial innovation see barnett 1980 this methodology has been widely applied to monetary aggregation and money demand studies in a number of countries as in belongia 1996 drake 1996 drake and chrystal 1997 and anderson jones and nesmith 1997 to determine whether risky assets are substitutes for capital certain assets we use two other divisia aggregates constructed from traditional measures of money the first of these is an aggregate of highly liquid zero yield cash assets given that the component assets all have zero own rates of return however divisia aggregation is equivalent in this case to simple summation the second aggregate is a divisia aggregate of interest bearing capital certain assets including risky assets complicates the analysis because the degree of risk aversion will affect the estimates of substitution between capital certain and noncapital certain assets thus we also analyze how different degrees of risk aversion affect the results the substitution relationship between assets is estimated from an asymptotically ideal model aim the choice of an aim is in line with the recommendation of barnett fisher and serletis 1992 that flexible systems of demand equations should be used that allow for nonlinear optimizing behavior by economic agents furthermore this paper can be seen as an extension of the recent application of this model to u

a new empirically weighted monetary aggregate for the united states i introduction this article uses an approach to long run econometric modeling proposed by pesaran et al 2001 hereafter pss to develop an empirically weighted broad monetary aggregate for the united states and to demonstrate the advantages of this type of aggregate from a monetary policy perspective in particular we examine the ability of this type of approach to deal with periods of significant financial innovation and money demand instability a key requirement for monetary aggregates to provide a useful role in guiding monetary policy is that they should be stably related to the objectives of policy such as inflation or nominal income growth in this context the united states has exhibited periodic evidence of significant money demand instability most notably these have been goldfeld s 1976 case of the missing m1 in 1973 74 and the missing m2 episode of the early 1990s feldstein and stock 1996 in both cases the aggregate in question experienced a significant velocity increase and as a consequence previously established and apparently stable money demand relationships began to seriously overpredict the growth in these aggregates the missing m1 episode in 1973 74 together with subsequent evidence that m2 was more predictable than m1 led many economists to use m2 as an indicator of nominal activity hence during the 1980s m2 became the primary intermediate target of monetary policy furthermore the primacy of m2 appeared to be well supported by the available empirical evidence feldstein and stock 1994 for example established that the rate of change of m2 was a statistically significant predictor of the rate of change of nominal gross domestic product gdp over the period 1959 92 furthermore m2 remained statistically significant when short term interest rates were added to the relationship subsequent research such as miyao 1996 and estrella and mishkin 1997 however cast doubt on the robustness of this result carlson et al 2000 p 34 for example summarize the current situation by arguing that the promising empirical conclusions of feldstein and stock 1994 that established predictive content for m2 in a vector error correction setting do not seem to find support in data that extend through the mid 1990s the key factor behind the breakdown in the m2 relation appears to have been the substitution away from time deposits and into mutual funds particularly stock and bond mutual funds in the low interest rate environment of the early 1990s although the definition of m2 has been expanded by the federal reserve in the past to include money market mutual funds mmmfs and money market deposit accounts mmdas for example a number of analysts duca 1995 darin and hetzel 1994 orphanides et al 1994 have advocated that m2 should be expanded further to include these stock and bond mutual funds m2 significantly these studies typically use the simple sum aggregation approach in which all component assets are given equal and constant weights over time this approach does not seem consistent however with the accumulating evidence of a significant shift in wealth holders preferences sometime in the early 1990s carlson et al 2000 for example add to the empirical evidence that had accumulated during the 1990s by suggesting that the instability was associated with a permanent upward shift in m2 velocity between 1990 and 1994 furthermore they argue that our results support the hypothesis that households permanently reallocated a portion of their wealth from time deposits to mutual funds p 381 clearly simple sum aggregation is not able to take account of these changes in preferences more significantly however simple sum aggregation cannot take account of any changes in the relationship between component assets and nominal income over time although carlson et al 2000 do manage to reestablish a stable money demand relationship for the mzm money at zero maturity and m2m m2 minus small time deposits aggregates through the 1990s this is only possible by specifically accounting for the financial innovation that occurred in the early 1990s