Southern Economic Journal

Distinguished Guest Lecture The policy framework that led to the financial crisis in Asia is analyzed. Better outcomes could have resulted if a more formal decision theoretic framework based on adequate research was applied to the Asian situation. The failure to use the best available models and information may be attributed to decision makers' focus on the statistics on unemployment or gross domestic product rather than on data on social indicators. The significant role played by misguided ideas as well as by special i...

Mitigating agency problems by advertising, with special reference to managed health care.

The conflict that results in the agency relationship between middlemen and consumers is analyzed. To provide consumers with the information they need to address this agency conflict over drug prescriptions, an alternative solution involving the use of advertising by pharmaceutical manufacturers is examined. Further, the agency problem is investigated by employing a model wherein consumers choose to buy their health care from one of two health maintenance organizations.

International trade and the accumulation of human capital.

The role played by the effect of international trade on the distribution of income within a country in influencing the accumulation of human capital is analyzed. This role is examined using a model that shows the relation between the accumulation of human capital and the changes in the distribution of income because of trade. Findings suggest that trade has positive effect on the accumulation of human capital in countries wherein human capital is a scarce factor of production. In high income ...

On-the-job training, establishment size, and firm size: evidence for economies of scale in the production of human capital.

The effects of firm and establishment size on the outcomes of on-the-job training is analyzed by employing a unique data set that estimates the relation among employer size and the intensity, duration, and composition of different measures of training. Also, the link between the training cost advantages of large firms and steeper wage profiles is investigated. A model showing that lower per unit costs of formal training may be responsible for differences in training across establishments and ...

A positive model of reserve requirements and interest on reserves: a clearinghouse interpretation of the Federal Reserve System.

A positive model of Federal Reserve System's requirements and interest payments on reserves is presented. In contrast with previous methods, the model considers the Fed as a clearinghouse and it replaces the stabilization theme with one that is based on public finance considerations, particularly optimal tax considerations. At the center of the model is a government whose goal is to fulfill a revenue requirement by raising revenue from several sources, such as levy on money issue.

Virtual patent extension by cannibalization.

The impact on consumers, patentable and generic drug producers of the patentable drug producer's strategy of introducing a generic version of their product before its patent expires is examined using a game-theoretic model. The presence of price-sensitive and brand-loyal segment of buyers is assumed who, respectively, switch and do not switch to the generic product if its price is below the price of the brand-name product. Models of two periods, namely the period when the brand-name product's...

Tariff and quota reform with international capital mobility.

A tariff and quota reform with international capital is analyzed by modeling an Arrow-Debreu economy. The model allows intermediate goods and joint production with an arbitrary number of goods and factors, as well as a convex production set for the economy with a linearly homogenous technology in each activity. Results show that on one subset of imports, international capital mobility increases the cost of tariff protection, even if the remainder of the imports are irremovable quotas.

Have air pollutant emissions converged among U.S. regions? Evidence from unit root tests.

A study was conducted, using both cross-sectional and time-series techniques, to investigate whether income convergence in the US from 1929-94 was accompanied by air pollutant emission convergence. The study analyzes data on two indicators of environmental quality, namely emissions of sulfur dioxides and nitrogen oxides. Some evidence from unit root tests show that per capita emissions of nitrogen oxides and sulfur dioxides have conditionally converged across the regions.

Uncertainty and optimally uniform commodity taxes.

The implications of uncertainty for the structure of optimal commodity taxes in the presence of a linear income tax are analyzed. It is found that if the subutility of optimal commodity taxes is logarithmic, they are uniform within the category of noncommitted goods. On the other hand, if both of their subutilities are logarithmic, they are uniform within the two categories. Further, it is shown that optimal commodity taxes are nonzero across the two categories, with the tax rate on committed...

Input decisions and price-quality schedules.

Conditions on relationships between choices and pricing incentives for quality when output necessitates an input-conditioned distribution of products over the quality spectrum are developed. The conditions involved impose integral and differential requirements on the differences between price-quality schedules as well as integral and differential requirements on the quality-conditioned marginal product function. The findings were obtained by combining standard integration-by-parts methods wit...

Exchange rate volatility and international trade.

The implications of exchange rate uncertainty for the behavior of a competitive firm, particularly the impact of exchange rate volatility on the optimal export policy are analyzed. A model of this firm is presented with ex post flexibility as to the sale of its products in a domestic or foreign market. Results show an increase in exchange rate volatility increases the production volume and international trade if relative risk aversion is less than unity, thus exchange rate volatility may have...

Reputation effects in bargaining games.

Reputation effects in a dynamic simultaneous-offer bilateral bargaining game wherein one player might have some irrational commitment that requires him to demand on some specific bargaining allocation are analyzed. It is found that if this player demands on this allocation, the bargaining game will end in the first few rounds and he can get an expected payoff close to that allocation. Moreover, the upper bound within which the bargaining game ends does not depend on the relative strength of t...

The Evolution of Retirement: An American Economic History, 1880-1990.

Review

Analytic Narratives.

Review

Designing Incentive Regulation for the Telecommunications Industry.

Review

Luxury Fever: Why Money Fails to Satisfy in an Era of Excess.

Review

Statistical Visions in Time: A History of Time Series Analysis, 1662-1938.

Review

Money and Good Intentions Are Not Enough.

Review

On Voting: A Public Choice Approach.

Review

Public Policy Toward Cable Television: The Economics of Rate Controls.

Review