bluuebunny/crossref_metadata_2025 huggingface dataset:
NET MIGRATION, UNEMPLOYMENT, AND THE BUSINESS CYCLE*
Authors: Haurin Donald R. , Haurin R. Jean
Published: July 2006

ABSTRACT An empirical test of the effects of exogenous shocks upon a region's population size is conducted in the framework of an equilibrium locational model. The model emphasizes the separation of endogenous from exogenous factors, a point omitted in most empirical studies of aggregate migration. Exogenous changes are manifested in the local relative cost of living and the local relative unemployment rate. Hypotheses are tested using a national sample of youth, in addition to census, data. Surprisingly, a simple measure of the size of shock to a regional economy has the greatest explanatory power compared to more sophisticated measures based on prior business cycles.
MEASURING THE EFFECT OF COST VARIATION ON INDUSTRIAL OUTPUTS*
Authors: Liew Chong K. , Liew Chung J.
Published: July 2006

ABSTRACT. This paper introduces the household interactive variable input‐output (HIVIO) model to measure the effect of cost variation on industrial outputs. The model produces a variety of cost elasticities that separate out impacts on industrial prices, imports, and outputs, with “own” and “cross” elasticity components. Like the conventional input‐output multipliers, these cost elasticities can be useful parameters to evaluate the substituting behavior of firms and consumers. By using the 1980 Korean input‐output transactions table, we find the wage and import price effects on industrial prices, outputs, and import demands.
ON THE OPTIMUM LOCATION OF VERTICALLY RELATED FIRMS WITH SIMULTANEOUS ENTRY*
Authors: Hwang Hong , Mai Chao‐cheng
Published: July 2006

ABSTRACT This paper considers a case of bilateral monopoly and examines the possibility of an intermediate location for two vertically related firms under simultaneous entry, and then analyzes the welfare‐maximizing location for both firms. It shows that whatever the case, an intermediate location for both firms is unlikely to occur and that the pattern of industrial location under welfare maximization is equivalent to the one under perfect competition, but is different from the one under bilateral monopoly under certain circumstances.
CANADA DIVIDED: THE OPTIMAL DIVISION OF AN ECONOMY INTO REGIONS
Authors: Howe Eric C. , Stabler Jack C.
Published: July 2006

ABSTRACT We develop an objective methodology for forming large regions (called macroregions) from small regions (microregions). We observe that the aggregation of microregions in an interregional input‐output model causes aggregation error in the model. Our optimal regions are those that cause aggregation error to be minimized. We apply our methodology to Canada, and we compare our optimal regions for Canada to those of Statistics Canada and to those obtained using the well‐known heuristic of Kossov. Statistics Canada's regions as well as those produced using Kossov's technique are characterized by substantially greater aggregation error than are those produced with our methodology.
ON THE PLAUSIBILITY OF THE SUPPLY—DRIVEN INPUT‐OUTPUT MODEL: A THEORETICAL BASIS FOR INPUT‐COEFFICIENT CHANGE*
Authors: Gruver† Gene W.
Published: July 2006

ABSTRACT. Oosterhaven (1988) labels the supply‐driven input‐output model “theoretically implausible” and criticizes the straightforward use of the model for impact studies. This comment extends and corrects some of the issues addressed by Oosterhaven. We derive the characteristics which industry production relations must possess to be consistent with the implied changes in industry inputs and outputs when supply‐side input‐output models are employed for impact analysis. First, it is shown that an implicit assumption is the characteristic of perfect substitutability among all inputs in each industry production function. This is the polar opposite of the Leontief assumption of zero elasticity of factor substitution among all inputs, and is very unrealistic for large changes from the initially observed solution since it implies that all inputs are non‐essential in the production process and that any input can be substituted for all others simultaneously. Second, it is shown that the model may still be reasonable for approximating the effect of small changes since the implied production relation may be interpreted as a cost minimizing choice for a standard constant‐returns‐to‐scale production function linearized around the initial solution under the assumption that relative prices are unchanged. Under this alternative interpretation, the supply‐side model may be expected to provide a reasonable approximation, useful for analyzing changes in the neighborhood of the initial solution, but would appear to be inappropriate for analyzing large changes.
A PRACTICAL NOTE ON THE NEOCLASSICAL ECONOMIC‐BASE MARGINAL MULTIPLIER*
Authors: Merrifield John
Published: July 2006

Computation and usage of my neoclassical economic‐base marginal multiplier formula (Merrifield, 1987) is simplified. The note points out the economic parameters that must be estimated with some care and for which rough approximations suffice. It also indicates when the size of the multiplier will be significantly affected by the source of the exogenous stimulus (factor‐ or output‐price change). The traditional bifurcation effort must be supplemented with careful estimates of only a small subset of the other parameters. For most of the simulated parameter combinations, the multiplier based on exogenous factor‐price changes differed from the multiplier based on output‐price changes by less than 10 percent.
A DEMOGRAPHIC ANALYSIS OF THE POPULATION GROWTH OF STATES, 1950‐1980*
Authors: Smith Stanley K. , Ahmed Bashir
Published: July 2006

State populations in the United States are characterized by large differences in current growth rates and historical growth trends. What demographic factors account for these differences? Population growth has only three components: births, deaths, and migration. In this study, we estimated the contributions of births, deaths, and migration to changes in population size between 1950 and 1980 for the 48 contiguous states in the United States. We found that population momentum (i.e., the growth that would occur in a closed population if fertility and mortality rates remained constant) had the largest effect on population growth in most states, but that differences in net migration were the major cause of state‐to‐state differences in growth rates. We also found that net migration has been gaining in importance compared to natural increase as a component of population growth. We expect this trend to continue in coming decades.
SPATIAL COMPETITION AND THE JOINT CONSUMPTION OF SERVICES*
Authors: Ohsawa Yoshiaki
Published: July 2006

In Hotelling location models, an implicit assumption has been made that a customer uses the service provided by the firm, independent of other customers. However, for firms that supply meeting rooms, wedding halls, tennis courts, and golf links it is essential to incorporate the fact that the customer only uses the service in conjunction with other customers. The objective of this paper is to formulate the Hotelling location model n consideration of the interdependence among customers in one‐dimensional space, and to characterize the state of equilibrium. In our model, each group of members within a given distance enjoys a fixed amount of service of the firms, under the assumption that the travel cost incurred by each group is defined as the travel cost of the farthest customer in the group.
SERIAL CORRELATION IN MULTIREGIONAL MIGRATION MODELS*
Authors: Foot David K. , Milnet William J.
Published: July 2006

In this paper, we outline the specification and estimation of a time series of multiregional net‐migration equations subject to first‐order serial correlation. We show that the necessary nonstochastic adding‐up constraint, which requires that net migration in the system sum to zero, imposes restrictions on the serial‐correlation coefficients. We estimate equations under these restrictions using data for the ten Canadian provinces for the period 1962‐1985. The results confirm the significance of the serial‐correlation coefficient and, hence, the importance of incorporating this correction in future time‐series models of multiregional migration.
TARIFF PROTECTION IN AN OPEN SPATIAL ECONOMY*
Authors: Hatzipanayotou Panos , Heffley Dennis
Published: July 2006

Spatial pricing models have been used to illustrate a tariff's asymmetric effects on consumers located at different points in the protected economy, and to demonstrate that the optimum tariff for a small open spatial economy may be positive. In these models, the distribution of households has been taken as uniform and fixed.

We extend the spatial model by allowing households to optimally locate and consume variable amounts of land, as well as the domestic‐ or foreign‐produced good. Land consumption, location rents, and the distribution of consumers are endogenous, responding to tariff‐induced changes in the delivered prices of the domestic and foreign goods. Within this limited general equilibrium framework, a neoclassical result resurfaces: from the perspective of private consumers, the optimum tariff in a small open economy is zero. The possibility of a positive optimum tariff, however, may remain intact in a more integrated model where domestic profits and tariff revenues are redistributed within the spatial economy.
AN ECONOMIC INTERPRETATION OF KUHN'S DUAL FOR THE STEINER‐WEBER PROBLEM A NOTE*
Authors: Guccione Antonio , Gillen William J.
Published: July 2006

In this paper, we given an economic interpretation of Kuhn's dual of the Steiner‐Weber problem. It depends essentially on the notion that different transportation systems arerelevant for the primal and the dual. Moreover, the Euclidean metric underlies the interpretation of the primal, the block one that of the dual.
A NOTE ON THE FORMULATION OF A FULL‐ANALOGUE REGRESSION MODEL OF THE SHIFT‐SHARE METHOD
Authors: Patterson Murray G.
Published: July 2006

ABSTRACT. This paper presents a full‐analogue regression model of the deterministic shift‐share method, for analyzing the components of regional employment change. The model is formulated as a constrained least squares regression problem. This leads to a direct determination of estimates for the national, industrial, and regional growth coefficients. The statistical significance of these coefficients and the overall model can then be tested by using standard regression test statistics.
TRANSBOUNDARY INCOME AND EXPENDITURE FLOWS IN REGIONAL INPUT‐OUTPUT MODELS*
Authors: Rose Adam Z. , Stevens Benjamin H.
Published: July 2006

ABSTRACT. Nearly all regional input‐output models have been constructed without a proper accounting of inflows and outflows of personal income and personal consumption expenditures. Typically invoked is a no cross‐payments assumption, analogous to the no cross‐hauling assumption for commodities. We present a new accounting framework based on the classification of flows according to the location of income generation, receipt, and spending, and argue that only flows endogenous in all three respects should be part of a closed regional I‐O model. We use the framework to compute the upward bias in multipliers in a typical regional I‐O model. We also present several methods for estimating transboundary flows.
REVERSE COMMUTATION IN A MONOCENTRIC CITY*
Authors: Elliott Moore James , Seo Jong‐Gook
Published: July 2006

ABSTRACT. A general equilibrium multiperiod linear programming model of urban land use is used to identify reverse commutation as a rational response to economic change. Information about future economic conditions is complete, and capital is replaceable at finite cost. Export mixes are defined exogenously, and temporal shifts between activities of different land intensities are shown to induce reverse commutes as one way of avoiding the cost of land use change.
THE EFFECT OF PROPERTY TAX RATE DIFFERENTIALS ON SINGLE‐FAMILY HOUSING STARTS IN WISCONSIN, 1978–1989*
Authors: McGibany James M.
Published: July 2006

ABSTRACT. A pooled cross‐section time‐series approach is used to test the hypothesis that differences in property tax rates between and across regions exert an excise‐tax impact on housing starts. Synthesizing the research regarding property tax incidence on housing markets and residential location with that of regional housing studies, an empirical model that allows for inter‐ and intraregional influences on housing starts is developed. Using county data from Wisconsin over a twelve‐year span, I find that property tax rate differentials have a negative effect on the construction of single‐family houses.
SPATIAL MONOPSONY AND MONOPOLY PRICING IN A STOCHASTIC ENVIRONMENT*
Authors: Löfgren Karl‐Gustaf
Published: July 2006

ABSTRACT. In this paper some of the important properties of the behavior of a spatial monopsonist (monopolist) facing a stochastic supply (demand) curve are derived. Under uncertainty, price setting and quantity setting behavior are no longer equivalent. Hence, spatial price discrimination has to be compared with spatial quantity discrimination with respect to expected profits. I prove three general theorems on how the ranking of the behavioral modes, in terms of expected profit, depends on how the stochastic component enters the supply (demand) and supply (demand) price functions. In particular, I prove that under monopsony one would expect a high probability of excess demand, in the sense that the firm would accept all deliveries at the preset price.
SPATIAL EQUILIBRIUM WITH FOOTLOOSE FIRMS*
Authors: Anderson Simon P. , Palma André de
Published: July 2006

ABSTRACT. We determine the location equilibria in a duopoly model under a novel solution concept. Typically, spatial equilibrium is described as either a simultaneous price and location game, or else as a two‐stage location‐then‐price game. We introduce a new alternative, a two‐stage price‐then‐location game. It is well known that no (pure strategy) equilibrium usually exists under the two standard solution concepts when products are homogeneous. We show this is also true for the new concept. We then provide numerical results for a specific functional form (the logit model) which introduces product heterogeneity into the standard framework, restoring equilibrium when the degree of substitutability between products is not too small.
EQUILIBRIUM AND DISEQUILIBRIUM PERSPECTIVES ON REGIONAL LABOR MIGRATION*
Authors: Harrigan Frank J. , McGregor Peter G.
Published: July 2006

ABSTRACT. In this paper we consider the nature of possible equilibria in a regional economic system characterised by an absence of net migration flows but the presence of gross flows. We argue that the presence of gross flows in a stationary equilibrium is most easily generated through the introduction of stochastic elements into the decision maker's migration calculus. We observe that within such a stochastic setting there is, in stationary equilibrium, an implied inverse relationship between the probability of migration for the representative decision maker and the size of the regional population stock. We show that this relationship has some surprising implications in a world where decision makers have static expectations, but that its implications are quite natural in a world where decision makers form their expectations rationally. We then interpret the model of Schachter andathaus (1989) in terms of a rational expectations equilibrium, and demonstrate how their tests are incapable of discriminating between equilibrium and disequilibrium models of migration behavior. We propose a set of alternative tests which explicitly recognize the stuck‐flow interactions between net migration and the distribution of regional population stocks and which make a clean distinction between equilibrium in the temporal and in the market‐clearing sense.
CENTER POINTS, EQUILIBRIUM POSITIONS, AND THE OBNOXIOUS LOCATION PROBLEM
Authors: Kaiser Mark J. , Morin Thomas L.
Published: July 2006

ABSTRACT. Real variable analysis has een used to great benefit in a variety of classical problems in location theory. In this paper we explore basic complex variable techniques in one formulation of the obnoxious location problem. A general definition of center points is first given and used to formulate several alternate versions of the obnoxious location problem. A logarithmic transformation is then used to demonstrate some equivalences between these families of distinct location problems (defined via center points). A prototype logarithmic potential function which results from this formulation is then investigated, and it is demonstrated that the extremal solutions with this objective reside on the boundary of its domain of definition. An application using zero‐ and one‐dimensional centers is discussed, and a generalization to the spatial obnoxious problem is also briefly examined. We define a zero‐dimensional center as a critical point of the logarithmic potential function, and it is shown that these centers are equivalent to the solutions of the Complex Moment Problem.
REGIONAL VARIATIONS IN TECHNOLOGICAL CHANGE AND IN POTENTIAL GAINS FROM CONSOLIDATION AMONG U.S. COMMERCIAL BANKS
Authors: Hamid Shahid S. , Verma Satyendra K.
Published: July 2006

ABSTRACT. This paper investigates the regional variations in the impact of technological change and in gains from consolidation among U.S. commercial banks. We estimate a multiproduct translog cost function with the appropriate regional dummy variables. Technological change, ray scale economies and scale biases in technological change are estimated for each region. Furthermore, pairwise expansion path economies between all the regions are calculated to evaluate the potential gains from interregional consolidation. In general Southwest banks had the worst and Southeast the best technological change. There is substantial disparity across regions. It also appears that technological change increased the efficient size in the Midwest and Southwest regions and reduced it in the West, Northeast and Southeast. Banks in all regions show ray economies of scale, affirming the need for larger banks if output mix remains constant. Finally, the results support takeover of regional banks by the Money Center banks but not vice‐versa, and favor consolidation among regional banks. The biggest potential gains accrue from mergers of Southeast banks with either Midwest or Southwest banks and the least gains are derived from mergers between Midwest and Southwest banks.
MARKET CAPTURE BY TWO COMPETITORS: THE PREEMPTIVE LOCATION PROBLEM*
Authors: Serra Daniel , ReVelle Charles
Published: July 2006

ABSTRACT. We consider a location and allocation game for two competitor firms, A and B, that each seek to locate p facilities in a network. A market is captured by a particular firm if that market's closest facility belongs to that firm rather than a competitor. The question is as follows: Firm A wants to locate its p facilities so that B, which enters also with p facilities after Firm A has located its facilities, will capture the minimum market value possible. That is, Firm A wishes to preempt Firm B in its bid to capture market share to the maximum extent possible. A model is presented that addresses this issue, together with solution methods and computing times.
FLEXIBLE FORM METHODS FOR MEASURING RENT GRADIENTS*
Authors: Diamond Charles , Gerety Mason
Published: July 2006

ABSTRACT We develop and demonstrate an empirical methodology for measuring rent gradients in the presence of consumers that have varying tastes for distance to the city center. We derive easily calculated measures of rent gradients, own price elasticities, and income elasticities. We demonstrate the ease of calculation of these functions, even in the presence of consumers who have nonidentical preferences. We also demonstrate how to test for bias in rent gradient estimation that arises from assuming identical preference functions.
THE MARKET VALUE OF ENVIRONMENTAL IMPROVEMENTS IN ALTERNATIVE FISCAL REGIMES*
Authors: Crane Randall
Published: July 2006

ABSTRACT Land price differentials have long been used as a proxy for the value of environmental improvements in cost/benefit analysis. Both the empirical and theoretical literatures have largely ignored two important facts, however: Taxes financing local improvements are often distortionary, and amenities which influence property values in turn impact the fiscal budget, and hence the tax rate and final economic burden. Put another way, the economic cost of an improvement is endogenous to both the amenity level and the revenue structure. Extending the story in this direction for a system of open or closed spatial cities, the paper finds land rent measures to be a biased measure of the willingness to pay for amenities financed by either head taxes (benefit taxes), property taxes (excise taxes), or highway tolls (user fees). These results are used to correct the conventional specification of empirical property value regression models, which traditionally account for neither tax revenue effects nor the excess burden of distortionary taxation.
CAPITALIZATION OF URBAN TRAVEL IMPROVEMENTS INTO RESIDENTIAL AND COMMERCIAL REAL ESTATE: SIMULATIONS WITH A UNIFIED MODEL OF HOUSING, TRAVEL MODE AND SHOPPING CHOICES*
Authors: Anas Alex
Published: July 2006

ABSTRACT. An equilibrium model of multimodal travel time improvements is developed and calibrated for the New York Metropolitan Area. The model employs a unified treatment of housing type, residential location and commuting mode choices with shopping (destination, frequency and mode) choices. Benefits of halving subway headways are reflected in consumer surplus and capitalized into producer surplus, with the latter divided between housing and commercial real estate. Sensitivity tests and simulations on other modes are also presented. Unlike the subway mode, across‐the‐board travel time improvements for bus, auto and commuter rail reduce central area housing rents, but auto improvements yield higher total benefits and increases in commercial rents.
COMPETITIVE LOCATION UNDER UNCERTAINTY OF COSTS
Authors: Bhadury Joyendu
Published: July 2006

ABSTRACT. In this paper, we study the centroid problem from competitive location theory for a linear market with uniform demand, assuming that the leader has imperfect information about the follower's fixed and marginal costs. It is shown that the general version of this problem can be formulated as a nonlinear programming problem and the exact solution can be obtained analytically in a special case. A simple strategy is also given for the general problem, and it is proven that this strategy has a guaranteed error bound. It is demonstrated that uncertainty of costs might lead to market failure in the centroid problem, but this disappears if the game is repeated and the firms learn from observing each other's moves. It is also shown that it is possible for the leader to obtain optimal expected profit at a low perceived risk, with only sufficient, and not necessarily perfect, information. These two observations lead to our primary conclusion from the study that although cost uncertainty is a realistic feature of most competitive location models, there are very effective ways of dealing with it.
SUBSIDIES, ADDITIONALITY AND FINANCIAL CONSTRAINTS: A COMRIENT ON WREN*
Authors: Holden Darryl R. , Swales J. K.
Published: July 2006

ABSTRACT. This paper comprises a detailed investigation of the properties of the analytical model introduced in Wren (1994) to evaluate the effect of industrial subsidies on firm employment. We deal specifically with the link between additionality and whether the firm is finance constrained, adding a more flexible formulation for the financial constraint than the two given in Wren. We use the model to question Wren's view that additionality will be greatest in financially constrained firms. We argue that financial constraints potentially restrict leverage and therefore in important, relevant circumstances, limit the effectiveness of subsidies.
THE ADJUSTMENT OF SUPPLY
Authors: Neisser Hans
Published: July 2006

Summary: § I. Introduction. ‐ § 2. Modes of the suppliers' reaction. ‐ § 3. Adjustment of supply under fixed demand. ‐ § 4. Demand adjustment combined with supply adjustment. ‐ § 5. The effect of inventory speculation.
A NOTE ON STABILITY, WORKABILITY, AND DUALITY IN LINEAR ECONOMIC MODELS*
Authors: Chipman John S.
Published: July 2006

§ 1. Summary: ‐ § 2. Statement of the problem. ‐ § 3. Proof of the theorem. ‐ § 4. Static Leontif model. ‐ § 5. Dynamic Hawkins‐Leonteif Model.
A HIERARCHIAL OPTIMIZATION PROCEDURE FOR MAGROECONOMIC POLICY MODELS
Authors: Krouse Clement G.
Published: July 2006

Abstract

An area of difficulty in the effective application of econometric models to determine optimal macroeconomic policy is the specification of the welfare functional. In such models it is required to synthesize a scalar‐valued criterion which properly relates tho joint effects of various economic factors. This paper develops a systematic procedure for treating (his problem when the several variables of the criterion are set forth in preference by a lexicographic ordering. In capsule, the procedure gives sequential attention to the various factors, with the constraint set at a given optimization stage determined by the characteristics of the solution at all prior stages.
INTERTEMPORAL OPTIMIZATION IN AN AGRARIAN MODEL WITH Z‐ACTIVITIES*
Authors: Bautista Romeo M.
Published: July 2006

Abstract

This paper examines the optimal characteristics of an agrarian growth model in which two production activities are distinguished, viz., one producing the usual agricultural (consumption) goods F, and the other consisting of labor‐using Z‐activities directed toward substitute consumption for industrial goods and augmentation of agricultural capital.

Certain restrictive assumptions on the form of the utility function are made which reflect in part the nature of the three types of consumption goods being distinguished. Optimum conditions are derived using classical calculus of variations, yielding additional variables in the form of shadow prices. Non‐negativity of gross investment is shown to be the only relevant boundary constraint and is accordingly taken into account in the analysis. The phase diagram involving the capital‐labor ratio and the shadow price of Z‐goods indicates that the unique stationary point is a saddle‐point. Some segment of the two stable branches then represents the interior solution to the infinite horizon problem; if the initial capital‐labor ratio is ≪ sufficiently high ≫, the optimal path will entail zero gross investment in the initial phase. Where the period of optimization is finite, different patterns of optimum capital accumulation and valuation will emerge, depending on the initial and terminal values of the capital‐labor ratio. Two cases are illustrated, the optimal path in each being shown to exhibit the turnpike property.

It follows that optimal growth may be achieved by directly controlling the rate of capital accumulation or by having the planning authority set the shadow price of Z‐goods. Other means of optimization are in fact available, e.g., controlling imports of industrial consumption goods. That one policy instrument is sufficient to attain the single objective is consistent with the well‐known proposition in the theory of economic policy.
ON THE STABILITY OF OLIGOPOLY WITH NONDOGMATIC CONJECTURES
Authors: Tarr David G.
Published: July 2006

In recent years a number of authors have considered a variety of expectations assumptions in analyzing the stability of oligopoly. In this paper it is assumed that an oligopolist has a probability distribution for its competitors'outputs. This ≪ nondogmatic conjectures ≫ approach enables us to determine: (1) which of the stability results are not dependent on the expectation assumption made and (2) how the expectation assumptions themselves affect the stability results.
THE CONCEPT OF GENERAL EQUILIBRIUM IN A MARKET ECONOMY WITH IMPERFECTLY COMPETITIVE PRODUCERS*
Authors: Cornwall Richard R.
Published: July 2006

This paper formulates a general equilibrium market economy where consumers are « perfect competitors » but producers take advantage of their ability to influence prices. It is shown that in such a model it is not reasonable for producers to attempt to maximize profits. Conditions are presented under which there exists a solution for such an economy which is Pareto‐efficient for the owners of the firms. Finally, it is shown that a pecuniary externality makes the core a very weak solution concept to use in analysing rivalry among producers.
USE OF THE DURBIN‐WATSON STATISTIC WITH LAGGED DEPENDENT VARIABLES
Authors: Sapir Andre
Published: July 2006

It has been argued that the Durbin‐Watson Statistic “d” is biased towards 2 when lagged endogenous variables are included in an equation estimated by Ordinary Least‐Squares.

We show that the Durbin Statistics “h” does not generally contradict the D.‐W. test, and we conjecture that the inclusion of lagged dependent variables produces a real diminution of the dependence of the residuals over time.
ON THE OPTIMAL CONTROL OF NATIONAL ECONOMIC SYSTEM
Authors: Teo K. L. , Yeo L. T.
Published: July 2006

In this paper, optimal policies for a national economic system modelled and modified on the basis of the cyclical growth theory developed by Keynes – Phillips – Bergstrom (4) are investigated with the aid of Pontryagin Maximum Principle. Further, a numerical example is presented using the computer programme given in the reference (15, pp. 20–31) with some modification. Its details are discussed in Section 4.
POWERS OF A COMPANION MATRIX
Authors: Brissimis Sophocles N.
Published: July 2006

This note gives explicit expressions for the elements of powers of a companion matrix, i.e. the matrix of transformation of a higher than first order linear dynamic econometric model into a first order one. It can be used as a reference for understanding the derivation of dynamic multipliers in such a model.
STABILITY IMPLICATIONS OF INTER‐REGIONAL MOVEMENT IN MACRO DISEQUILIBRIUM MODELS
Authors: Meinster David , Mitchell Douglas
Published: July 2006

Abstract

This paper considers the global stability of disequilibrium macro models. Frequently past discussions of stability have ignored the possibility of movement between regimes, where regimes are defined by the combinations of quantity constraints which exist. The present paper shows the precise conditions for, and the implications of, such interregional movement. Conventionally derived assertions of either stability or instability may be mitigated by interregional movement.
ADVERTISING, PERCEIVED QUALITY AND STRATEGIC ENTRY DETERRENCE AND ACCOMODATION(*)
Authors: Bonanno G.
Published: July 2006

Abstract. When faced with the choice between two brands of a homogeneous good, consumers—cetevis paribus—have been observed to prefer the brand with which they have become familiar through advertising to the unadvertised brand. Some consumers are even prepared to pay a price premium for the advertised brand. Taking this behaviour as a datum, we show that an incumbent monopolist can use advertising to erect a barrier to entry or to influence the nature of entry (strategic entry accomodation).
COMPLEX DYNAMICS IN A SIMPLE INPUT‐OUTPUT MODEL WITHOUT THE FULL CAPACITY UTILIZATION HYPOTHESIS
Authors: Franke R. , Weghorst W.
Published: July 2006

The paper takes up a multi‐sectoral dynamic input‐output model of Duchin and Szyld (⇐A dynamic input‐output model with assured positive outputs ⇒, Metroeconomica, vol. 37, 1985) and develops it further in two respects. On the one hand, also a decrease of productive capacities is allowed for. On the other hand, an endogenously determined ⇐ correction term ⇒ is built into the investment function. It reflects a certain kind of risk‐aversion and serves to absorb the explosive tendencies to be found in the original model. Subsequently the one‐sector version, which nevertheless comprises already four state variables, is studied by means of computer simulations. Depending on the choice of a behavioural parameter, persistent but seemingly quite irregular cycles are generated. For a more sophisticated investigation spectral analysis is employed. The model itself could succintly be characterized as an elaborated multiplier‐accelerator model.
ERROR‐CORRECTION, ⇐ SURPRISE ⇒ MODELS AND THE DIFFERENTIAL APPROACH TO THE CONSUMPTION FUNCTION(*)
Authors: Rossi N. , Schiantarelli F.
Published: July 2006

The paper provides a general theoretical framework that allows a comparison and a possible reconciliation of error correction models of consumers’behaviour and the life cycle hypothesis under rational expectations. It is suggested that by relaxing the assumption of intertemporally strongly separable and homothetic preferences, a generalization of Hall's random walk model can be derived, containing an error correction mechanism.
RATIONAL FORMATION OF EXPECTATIONS: KEYNESIAN UNCERTAINTY AND DAVIDSON'S (NON)‐ERGODICITY‐CRITERIUM
Authors: Van Der Feltz W.J. , Hoogduin L.H.
Published: July 2006

In this paper Davidson's argument that expectations formation according to the Rational Expectations Hypothesis (REH) may be irrational is evaluated from the viewpoint of Keynes’probability theory. Although Davidson's conclusion is supported, it is contended that his arguments are not derived from and at some points are even incompatible with Keynes’theory of probability. It is further shown why (REH) should be rejected in the light of Keynes’probability theory. Finally, two alternative ways to treat expectations which are consistent with both rational behaviour and Keynes’probability theory are sketched.
ON THE HIERARCHY OF SOME QUALITATIVE STRUCTURES IN THE VON NEUMANN AND RELATED MODELS
Authors: Giorgi Giorgio , Meriggi Maria Rosa
Published: July 2006

In this paper we collect some old and new qualitative‐structural properties on the input and output matrices involved in the classical von Neumann model, properties relevant, from the formal and/or economic point of view, in the study of the equilibria of the said model. It is established the hierarchy, i.e. the relations of inclusion, partial overlapping and disjunction, among these properties, which permits to amend some current slips in the analysis of the von Neumann model (one due to von Neumann himself). The results obtained can be fitted to other production and exchange multisectorial models.
THE PRICE COST MARGIN ‐ INTERNAL RATE OF RETURN RELATION: A CONTRIBUTION TO AN ETERNAL DISPUTE
Authors: Jegers M.
Published: July 2006

It is shown that under some homogeneity conditions, the price cost margin and the internal rate of return rank firms identically.
ON PASLNETTI'S ‘G’ MATRIX
Authors: Steedman Ian
Published: July 2006

Pasinetti's vertically integrated H matrix has been much used in economic theory but his other vertically integrated matrix, G — which is of a quite different nature — has been little noticed. This paper considers the nature of the G matrix, its relationship to H, and varous issues — concerning consumption and growth, value added, sales revenue and differential growth or profit rates — for the analysis of which G is a very useful analytical tool.
THE LATENT CHOICE. WHEN IT IS WORTH POSTPONING THE DECISION
Authors: Indelli P.
Published: July 2006

We discuss choices among irreversible projects under uncertainty. This kind of problem was first posed studying natural resource utilization (Weisbrod, Arrow‐Fisher), but our analysis may be applied to a wide class of phenomena. In an uncertain world, an economic agent, instead of committing himself to an irreversible decision, could prefer to postpone his choice waiting for better information. In this paper, we discuss the projects characteristics and the information qualities that make postponing the preferred choice. We use a Markov process with a three‐period horizon, because it allows us to treat analitically the way in which information arrives over time.
PATTERNS OF TECHNOLOGICAL LEADERSHIP A SIMPLE MODEL WITH UNCERTAINTY
Authors: Delbono F.
Published: July 2006

This paper aims at combining dynamics and uncertainty in a simple model designed to investigate the relationship between market structure and innovation. We consider the case of two firms competing in a sequence of cost‐reducing technological races under uncertainty on the rival's R & D effort. Within an asymmetric duopoly it is shown under which conditions the expected evolution of technological leadership follows a pattern of Probabilistic Action‐Reaction or Probabilistic Increasing Dominance.
INPUT PRICE UNCERTAINTY, INVESTMENTS IN FLEXIBILITY AND COMPETITIVE INDUSTRY EQUILIBRIUM
Authors: Hiebert L. Dean
Published: July 2006

This paper assumes that firms can respond to input price uncertainty by selecting a flexible technology. A simple model of industry equilibrium is used to examine the choice of flexibility. It is shown that the industry equilibrium is not characterized by excess capacity. This contrasts with the result in the previous literature dealing with equilibrium under product demand uncertainty. It is also shown that the effect of an increase in input price dispersion on the optimal level of flexibility and the equilibrium number of firms depends on the interaction between flexibility and the optimal size of the firm.
HARROD'S KNIFE‐EDGE AND CONSUMPTION FUNCTIONS
Authors: Nakajima Tetsuya
Published: July 2006

This paper reconsiders Harrod's knife‐edge instability of the capitalist economy. An investment function of the type used by Harrod is combined with a consumption function of the relative income hypothesis type. It will be shown that, even under such an investment function, knife‐edge instability can be ruled out if a part of consumption behaves steadily and capitalists do not change their expectations very rapidly.
TRAINING AND LABOUR MARKET SEGMENTATION
Authors: Chapman Paul G.
Published: July 2006

A two period model of the training decision is analysed using a human capital approach. The segmented labour market model where training opportunities distinguish entrants is compared with a competitive structure with homogeneous entrants. The main conclusions in the paper are the clear effects of training wages and the different effects in the two market structures of both wages and employment prospects in the unskilled market on training.
AN ARBITRAGE INTERPRETATION OF CLASSICAL OPTIMIZATION
Authors: Ellerman David P.
Published: July 2006

The paper mathematically develops the heuristic idea that the first‐order necessary conditions for a classical constrained optimization problem are equivalent to a market being arbitrage‐free ‐ with the Lagrange multipliers being the arbitrage‐free market prices. The arbitrage notions start with the multiplicative Kirchhoff's Voltage Law and then generalize to matrix algebra. The basic result shows the normalized arbitrage‐free «market prices» (the Lagrange multipliers) resulting from a classical constrained optimizaton problem can always be obtained as a ratio of cofactors. The machinery also gives an economic interpretation of Cramer's Rule as a competitive equilibrium condition.
DOXASTIC INFORMATION PARTITIONS, AND AN ANTI‐NO‐TRADE THEOREM (*)
Authors: Ferrante Vittorioemanuele
Published: July 2006

Partitions of the set of states of nature are the traditional information structures in decision theory. In a multi‐person context, common knowledge of the choices, such as it occurs in a trade, implies common knowledge of relevant information: hence a well‐known impossibility theorem for trade based on differing belief can be obtained. A new set theoretic axiomatization of the beliefs held by decision makers allows here for the construction of doxastic, i.e. possibly incorrect instruments of measurement of the »outside« world, and allow traders to »agree to disagree«.
VARIABLE MARKUP IN A SMALL OPEN ECONOMY WITH INFLATION
Authors: Bianconi M.
Published: July 2006

This paper analyzes markup disturbances in a small open economy with flexible exchange rates and secular inflation. Specifically, I assume that the private sector fully controls a variable markup over costs. The markup is shown to vary (pro)anticyclically depending on the magnitude of the initial jump in the exchange rate following the disturbance.
OPTIMAL DYNAMIC PROFIT TAXATION: THE DERIVATION OF FEEDBACK STACKELBERG EQUILIBRIA
Authors: Gradus R.
Published: July 2006

In this paper we develop a framework for determining optimal profit taxation for a welfare maximising government. We show that there is a dynamic trade off between public consumption now and in the future. Two possible solutions are derived. The first solution, which is the formal outcome of an open‐loop Stackelberg equilibrium of a game between government and firms, is time‐inconsistent. The second solution, which corresponds to a feedback Stackelberg equilibrium, is time‐consistent, but yields a lower value of steady‐state utility. The outcome of the feedback Stackelberg equilibrium depends on the number of firms in this economy. If the number of firms is large, this equilibrium coincides with the open‐loop Nash equilibrium. Furthermore, we show the dynamic paths if the economy goes from its feedback to its open‐loop steady‐state.
THE MODIFICATION OF PASINETTI'S DYNAMIC LABOUR THEORY OF VALUE
Authors: Oda Sobei H.
Published: July 2006

This paper discusses how much labour is directly or indirectly necessary for present or future consumption of each commodity. Defining a vertically hyper‐integrated labour coefficient for every commodity. Pasinetti claims that it represents the labour which is dynamically necessary for a unit consumption of the commodity. However, if technology and annual growth rates of consumption demand are given, vertically hyper‐integrated labour coefficients are not determined uniquely. This paper demonstrates this result and formulates the improved vertically hyper‐integrated labour coefficients which are determined uniquely and thus readily applicable to both theoretical and empirical study of technical progress in non‐proportionally growing economies.
A NEOCLASSICAL FOUNDATION OF THE NON‐LINEAR INPUT‐OUTPUT MODEL
Authors: Iritani Jun , Nagatani Hiroaki
Published: July 2006

A non‐linear input‐output system is constructed on the basis of neoclassical production technologies. Four results are reported: (i) there exists a unique solution to the developed input‐output system; (ii) every real square matrix can be the Jacobi matrix of the function relating gross outputs to net outputs; (iii) if the system has a solution at a final demand vector, there is a solution at every final demand vector near it; and (iv) when the final demand for a commodity increases, its price never decreases.

The system is founded on a profit function of the economy, which represents a neoclassical production possibility. By this treatment, the system can deal with joint productions, as well as no‐joint productions.
AN INVESTIGATION OF ADVERTISING RIVALRY IN THE AUSTRALIAN BANKING INDUSTRY
Authors: Metwally M.M.
Published: July 2006

This paper examines advertising rivarly in the Australina Banking Industry. It offers a theoretical discussion of a number of criteria that may be used in distinguishing the role of advertising in an oligopolistic market framework. Empirical evidence is obtained by testing single and simultaneous equation models.
HETEROGENEOUS LABOUR, SCARCITY AND CHOICE OF TECHNIQUES
Authors: Erreygers Guido
Published: July 2006

A Sraffian model is presented in which commodities are produced by means of heterogeneous labour, and wages are (partially) determined by scarcity. Demand is explicitly taken into account, and therefore a “choice of techniques” perspective is adopted. It is shown that demand influences the choice of the cost‐minimizing technique, and that the cost‐minimizing technique may not always be unique. A dynamic extension of the model is briefly discussed. A numerical example illustrates how systems might behave over time.
THE COMPLEX DYNAMICS OF THE SIMPLE RICARDIAN SYSTEM: A NOTE
Authors: Freni Giuseppe
Published: July 2006

In a recent note, Bhaduri and Harris (1987) showed that a discrete‐time dynamic version of the ‘simple’Ricardian system (i.e. Blaug's (1978) popular version of Kaldor's (1955‐6) representation of Ricardian distribution theory, which includes linear agricultural productivity) can be endowed with an unstable stationary state, and that the system can also exhibit “chaotic” orbits (cfr. Collet and Eckmann, 1980), even if these phenomena cannot appear when the adjustment process is continuous.

This stationary state does not necessarily have to be unstable. A slightly generalized version of the ‘simple’Ricardian system (we dispense with the linearity assumption) is used in this paper to analyse a number of meaningful special cases in which the stationary state is stable.
A HARRODIAN KNIFE‐EDGE THEOREM FOR THE WAGE‐PRICE SECTOR
Authors: Flaschel Peter
Published: July 2006

This paper investigates a positive self‐reference of the rate of inflation onto itself as can exist in a standard medium run IS‐LM model with an appropriately formulated dynamic wage‐price sector. This self‐reference represents a three‐dimensional analogy to the one‐dimensional positive feedback mechanism of the Harrodian analysis of unstable steady growth. It is shown in particular that this self‐reference can overthrow the local asymptotic stability of such an IS‐LM model in a cyclical fashion by means of a so‐called Hopf bifurcation if the adjustment speed of the price level becomes sufficiently large.
AN ENVIRONMENTAL RESTRICTION AND INCOME DISTRIBUTION IN A CAPITALIST ECONOMY
Authors: Hosoda Eiji
Published: July 2006

Let us consider a growing economy where capitalists organize production emitting pollutants. The government is supposed to issue emission rights in order to control the amount of emitted pollutants, while capitalists must control their emission of pollutants in accordance with the amount of emission rights they buy. It is assumed that workers are also allowed to purchase emission rights. We show that the conventional inverse relationship holds between the wage rate and the profit rate, and between per capita consumption and the growth rate in this economy. We also study how economic variables such as the wage rate and per capita consumption are affected by the workers' purchase of emission rights.
ACCELERATING INFLATION OR RISING UNEMPLOYMENT ‐IS THERE AN ALTERNATIVE?
Authors: Vogt Winfried
Published: July 2006

Empirical observations suggest the existence of an unstable inflation‐unemployment trade‐off: whereas high levels of employment generate accelerating inflation rates, stability of the price level seems to require growing rates of unemployment. Under these conditions, macroeconomic policy has to produce countervailing economic fluctuations in order to limit the extent of the two‐sided instability. This is discussed within the framework of a macroeconomic model, in which prices and wages are determined by potential competition, and in which employment depends on monetary demand. The model is confronted with prevailing natural rate theories in which a stable equilibrium rate of employment is determined by supply conditions.
Mutilating palmoplantar keratoderma with oral involvement
Authors: Grau‐Massaés M. , Millán F. , Guillén C. , Febrer M.I. , Bonillo J. , Aliaga A.
Published: July 2006

We report a 26 year‐old man with bilateral progressive palmoplantar keratoderma, automutilation of the 3rd, 4th and 5th toes of the left foot, and recurrent episodes of gingivitis in childhood. The patient had signs common to both Papillon‐Lefevre and Vohwinckel syndromes. Acitretin was given (30 mg/day) with good results.
Postinflammatory mid‐dermal elastolysis
Authors: Barile Monica , Rivara Gian Piero , Parodi Aurora , Rebora Alfredo
Published: July 2006

A 70‐year‐old male presented with acute eczematous dermatitis apparently related to UV light exposure. Spontaneous healing left a fine wrinkling strictly limited to the skin areas involved. Histopathology revealed complete loss of elastic tissue in the mid‐dermis. There have been only three previous reports of antedating inflammatory process in such cases.