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Regulation is often portrayed as placing a substantial burden on US businesses and the overall US economy. Moreover, policy options of “cutting red tape” and “reducing federal bureaucracy” are often asserted to be a way to stimulate investment and, through this channel, a way to promote economic growth. This paper examines the relationship between growth in regulatory restrictions in the Code of Federal Regulations and manufacturing investment in the United States over the 1970-2009 period. An industry-level dataset is constructed by mapping the novel industry-specific RegData dataset from the Mercatus Center at George Mason University to the comprehensive industry-specific manufacturing data in the NBER-CES Manufacturing Industry Database. In total, the constructed dataset includes 337 manufacturing industries. This approach yields substantial evidence that increased business regulation is associated with decreased business investment. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to present an innovative model to evaluate the fair price of a subset of structured products for a hypothetical US structured bond. Design/methodology/approach – The authors assume that interest rates dynamics are described by the Cox–Ingersoll–Ross process. They conduct robustness checks by stress testing against parameter and model uncertainty. Findings – The fair value of the bond is robust under any parameter or model misspecification. In addition, a change in the price seems to be more sensitive to long-term yields rather than short-or mid-term yields. The authors provide a better understanding of the relationship between bond prices and business cycles: a slight change in the current structure would have a significant effect on the bond price only during economic expansions. Social implications – The recent global financial crisis has led policymakers and the financial press to blame financial innovation through accusations of structured products being highly complex. Much of the criticism is based on the fact that investors were not able to properly price and fully understand the risks of their investments. Regulators should ensure proper pricing of these products to protect both the investors and the system. Fair pricing is important for bond issuers, governments or corporations to design their product at an attractive price for investors. Originality/value – This paper fills a gap in the extant literature by providing an innovative model based on an Euler–Maruyama Monte Carlo scheme to price structured products. [ABSTRACT FROM AUTHOR]

In a recent issue of this journal, Beil et al. (2005, hereafter, BFJ) examined the relationship between telecommunications investment and economic growth in the United States over the period 1947-1996. Based on results from Granger-Sims test, BFJ conclude that '... investment by telecommunications firms is caused by, but does not cause, economic activity, and the findings are robust across lag lengths'. However, using another version of the Granger causality test due to Toda & Yamamoto (1995) and the same data set transformed into natural logarithms, the evidence in this paper indicates a feedback where there was a bi-directional causality between telecommunications investment and economic growth. This seems to suggest that policies aimed at stimulating the US economy by accelerating investment in the telecommunications sector may be successful. [ABSTRACT FROM AUTHOR]

The article presents a critical discussion of the two papers by Edgar M. Hoover and Joseph Shister on the factors related to investment for the individual firms. According to the author Hoover has demonstrated considerable dexterity in weaving into his model several of the more important institutional characteristics. But Hoover seems to stop short of asking the significant questions relevant to economic growth. The really important one would seem to be, do the institutional changes outlined make for more or less capital accumulation? The author remarks that if one fully accept the analysis as realistic of firm behavior, what changes are portended in the rate of economic growth? Turning now to Professor Shister, the impression which is immediately gained from his paper is the breadth of its scope and the transparency of its composition. Shister chose to deal with his subject on an over-all level, relating union practices and policies to the growth pattern of the American economy as a whole. This approach has both its merits and its shortcomings.

This paper sets out theory and measurement of how intangible investment might capture innovation and what data on intangibles look like for the EU, Japan, and the US. We also look at complementarities between information and communications technology (ICT) and intangibles, spillovers from intangibles to growth, and policy implications. [ABSTRACT FROM PUBLISHER]

In this paper, we examine the relationship between inventory levels and one-year-ahead earnings of retailers using publicly available financial data. We use benchmarking metrics obtained from operations management literature to demonstrate an inverted-U relationship between abnormal inventory growth and one-year-ahead earnings per share for retailers. We also find that equity analysts do not fully incorporate the information contained in retailers' abnormal inventory growth in their earnings forecasts, resulting in systematic biases. Finally, we show that an investment strategy based on abnormal inventory growth yields significant abnormal stock market returns. [ABSTRACT FROM AUTHOR]

The first depression of the twenty-first century appears to contain some unusual properties in the United States. In the midst of an economy in its fourth year of oscillating between stagnation and recession, the companies in the Standard & Poor's 500 stock index were expected to report record profits in 2011, and corporate profit as a share of the economy is at a fifty-year high. Productivity growth in the past decade, at more than 2.5 percent, is higher than in the 1970s, 1980s, and 1990s. And yet there is little appetite or competitive drive to invest. Two questions come to mind: Why are profits high, and why not invest them? High rates of exploitation, low taxes, and speculation generate high profits in production, and rents captured from debt-laden households and commodity prices explain the high profitability. The divorce of the capitalist class from its domestic economy, the debts of which are so high as to make investments too uncertain, explains the low investment rate. The paper examines the theoretical implications of these developments, with particular attention to their implications for theorizing the capitalist drive to accumulate. [ABSTRACT FROM AUTHOR]

In this paper we use a dynamic general equilibrium growth model to quantify the contribution to productivity growth from different technological sources in the three leading economies of the world: Germany, Japan, and the United States. The sources of technology are classified into neutral progress and investment-specific progress. The latter can be split into two different types of equipment: information and communication technologies (ICT) and non-ICT equipment. We find that in the long run, neutral technological change is the main source of productivity growth in Germany and Japan. For the United States, the main source of productivity growth arises from investment-specific technological change, mainly associated with ICT. We also find that a non-negligible part of productivity growth in the three countries has been due to the technology specific to non-ICT equipment. [ABSTRACT FROM PUBLISHER]

This paper investigates the effects of financialisation and functional income distribution on aggregate demand in the USA by estimating the effects of the increase in rentier income (dividends and interest payments) and housing and financial wealth on consumption and investment. The redistribution of income in favour of profits suppresses consumption, whereas the increase in the rentier income and wealth has positive effects. A higher rentier income decreases investment. Without the wealth effects, the overall effect of the changes in distribution on aggregate demand would have been negative. Thus a pro-capital income distribution leads to a slightly negative effect on growth, i.e. the USA economy is moderately wage-led. [ABSTRACT FROM AUTHOR]

The papers included in this symposium provide a compelling rationale for the role of health as an engine of economic growth, and thus for investing in health improvement as an important step in improving economic growth in the Mississippi Delta. This newer model of the relation between health and wealth, positioning health as an investment and as an important determinant of economic growth, has substantial implications for health-related public policy and for the business sector. Societal support of health promoting initiatives through public policy, especially for children and for the poor, are important efforts for improving health and for realizing the economic benefits of health improvement. [ABSTRACT FROM AUTHOR]

The article discusses the work of Hans Heymann, John H. Kaufmann and Wilfred Owen on transportation and economic development in the U.S. Heymann's paper is concerned with the necessity of air transport, and therefore refers only to the prestige allure of an international service. This is political economy through the looking glass. Instead of the classical end of greatest wealth and the classical means of, this is what one does, it should start with, this is what one does and end with greatest wealth subject to this constraint. The most obvious is a tendency to reduce the importance of international specialization. This may be wise, in the sense that the area previously specialized in some product which is due to become a drug on the international market. It may be unwise, in the sense that the country has overwhelming comparative advantages and disadvantages. The tendency to reduce international specialization may be the occasion for a growth, or an accelerated growth, in real income-due to the application of a dynamic policy in an area which is customarily viewed by economists as a problem in comparative statics, or it may impede or even reverse economic growth.

The new economic growth in nonmetropolitan areas of the U.S. has been the result of numerous economic, social, and political forces. One of these forces has been the location and expansion of export-oriented businesses. This is characterized by the relatively faster growth of manufacturing and some nonmanufacturing employment opportunities compared to the metropolitan changes (Haren and Holling 1979; Petrulis 1979). The export base expansion will have the well-known multiplier effect on total employment. While the central logic of the economic base multiplier is generally accepted, questions continue to abound regarding its apparent instability. Richardson (1978) commented on the wide variability of multiplier estimates. Many reports of economic impact warn the reader that actual results may vary from anticipated results because of type of stimulus, location of spending, timing, etc. However, a search of the literature has yielded few reports that have systematically examined community factors which influence the size of the local multiplier or the impacts from the multiplier. The purpose of this paper then is to present the results of a systematic examination of community characteristics which condition the magnitude of local multiplier impacts. The central hypothesis to be tested here is that community economic growth or decline is a function of the type of exogenous employment change and a vector of community characteristics, including location and population. It is the contention of this study that community characteristics affect consumption, production, and investment decisions and account for much of the variation in the estimated size of economic multipliers among communities, The remainder of this paper presents an argument for consideration of forces that influence the expression of the local multiplier, and the results of a regression model using a 10% stratified random sample of nonmetropolitan counties. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to measure the impact of investment in education on U.S. economic growth. Education is treated as an investment in human capital, since benefits accrue to an educated individual over a lifetime of activities. One of the most important benefits is higher income from labor market participation. This is the key to understanding the link between investment in education and economic growth. Our most important finding is that investment in human and nonhuman capital accounts for an overwhelming proportion of the growth of the U.S. economy during the postwar period. Educational investment will continue to predominate in the investment requirements for more rapid growth. [ABSTRACT FROM AUTHOR]

This paper estimates, using data from the United States and the Euro Area, a two-country stochastic growth model in which both neutral and investment-specific technology shocks are nonstationary but cointegrated across economies. The results point to large and persistent swings in productivity, both favorable and adverse, originating in the United States but not transmitted to the Euro Area. More specifically, the results suggest that while the Euro Area missed out on the period of rapid investment-specific technological change enjoyed in the United States during the 1990s, it also escaped the stagnation in neutral technological progress that plagued the United States in the 1970s. [ABSTRACT FROM AUTHOR]

By demonstrating the superiority of the present-value to the recoupment-period criterion, Peter Lindert [2] has made a major contribution to the analysis of foreign investment controls. In fact, after reading Lindert's analysis, one wonders how the recoupment-period criterion got a foothold in the first place' the assessment of the net impact of a control program is clearly dependent on a comparison of capital inflows and outflows occurring at different points in time; and the accepted and traditional way to make such intertemporal comparisons is by a present value calculation. [ABSTRACT FROM AUTHOR]

The past decade has seen a dramatic shift toward public sector financing of large hotels in the United States. This dialectic analysis examines trends in public participation in hotel development and examines why governments are investing in these projects. It looks at the different types of public participation and considers the market implications of these subsidies on private sector hotel development. The case is made that there is a need for accountability and more thorough review of these public investments. The paper proposes various ways that this can be achieved and discusses barriers to such reforms. doi:10.1300/J452v08n04_03 [ABSTRACT FROM PUBLISHER]

This paper presents new data on the sources of growth for the US economy over the period 1977-2000. Our principal innovation is the incorporation of detailed information for individual industries, including those involved in the production of information technology equipment and software. We show that economic growth is dominated by investments in information technology and higher education, both for individual industries and the economy as a whole. We also show that a jump in information technology investment, gains in the employment of college-educated workers, and the revival of productivity growth account for the resurgence of the US economy since 1995. [ABSTRACT FROM AUTHOR]

This paper describes an empirical study of the implications of agents' heterogeneity for theories of macroeconomic fluctuations based on the role of financial variables. Models of explicit distribution dynamics are applied to company account data from a panel of US manufacturing firms to investigate the dynamics of the entire cross-section distribution of firms' financial positions and the interactions with aggregate activity. It is found that the pattern of cyclical co-movements is consistent with models where aggregate fluctuations are endogenously and jointly determined with financial conditions. The dynamics of different parts of the leverage distribution contain significant predictive information for aggregate investment growth. The distribution dynamics reveal substantial intra-distribution mobility, although there is little evidence of significant interactions with aggregate economic activity. Intra-distribution mobility is higher for small firms than for large firms, and displays asymmetric patterns across business cycle phases. [ABSTRACT FROM AUTHOR]

Abstract--This paper examines the sources of productivity growth for the U.S. telecommunications industry from 1935 to 1987. These years encompass both the pre- and post-AT&T divestiture periods. We formulate a structural model that accounts for both changes in the cost and the demand side of the industry. We measure the contributions of aggregate demand, information intensity of the economy, price-cost margins, relative factor prices, direct and indirect effects of technological progress, and R&D investment on total-factor productivity (TFP) growth rate. We show that TFP growth rate as conventionally measured is a seriously biased measure of rate of technical change in this industry. [ABSTRACT FROM AUTHOR]

This paper develops a historically contingent understanding of patterns of uneven economic development in the U.S. South. We conceptualize spatial variation in economic development and its consequences for inequality to be embedded in both local and international dynamics. The character of local economic development, it is argued, reflects the organizational base and heterogeneity of local elites, the divisions and relative power of nonelites, and the embeddedness of the local political economy in national and world systems of politics and production. These ideas are developed and made historically and spatially specific through an analysis of uneven development in one Southern state, North Carolina. Our findings suggest that contemporary patterns of uneven development and the resulting income deprivations and inequality reflect conditional interactions between elite economic projects and racial divisions within the working class. We find that outside investment seems to reproduce rather than disrupt local patterns of inequality and poverty. [ABSTRACT FROM AUTHOR]

The article examines the status and role of private investment in the American economy in 1940. Investment opportunities in 1940 are very limited, that is, provided measures to expand power of consumers are vigorously pushed forward. Discussion in this paper is only limited to phases of the long-run investment problem. The role of inadequacy of plant and equipment as an important factor limiting economic expansion was investigated. The economic frontier most able to provide a large-scale permanent outlet for investment funds is determined.

This article focuses on the economic development of a nation. Not only does economic development command more discussion in its own name than any other economic subject before the United Nations and other international organizations; it is impossible to debate or pass a resolution on other subjects, for example, full employment, without also again giving consideration to economic development. Despite all the excesses of oratory and polemics which have been uttered in the name of economic development, it would be a great mistake, lightly to dismiss the reality and the intensity of the "drive" for economic development. It is prestige and economic nationalism, political nationalism, and standards of living all mixed together. It is intimately linked with the stirrings toward greater political self-government or independence among the peoples of many of the underdeveloped areas of the world. In this period of ferment, the aspirations toward economic development take on significance for political and security reasons.

This paper considers the allocation of national technological resources to different sectors of the economy. The impact of economic investments in technology is related to national, industry, and company growth. In some sectors of the economy investments in research and development (R and D) are well below the saturation level, where increasing the investment level and fraction of scientific and engineering manpower devoted to R and D may be expected to yield increased economic growth. A comparison is made of the sources and consumers of R and D funds in the U. S. and Israel, particularly as related to size of firms. Conclusions are obtained in the form of magnitude and allocation of R and D investments and utilization of scientific and engineering manpower for industrial R and D in Israel. [ABSTRACT FROM AUTHOR]

We measure the overall impact of railroad investment on economic development in the antebellum period in the United States using a vector autoregressive approach. Our results can be summarized as follows. First, we find bidirectional causality between railroad infrastructure investment and GDP. Second, we estimate a marginal product of $4.2 for railroad investment which corresponds to a 15.5% rate of return when considering a 10-year lifetime for railroad capital. While about two-thirds of this effect stems from the supply side, short run demand side effects also are substantial. Third, given the low effective tax rates practiced in the 1830s and the magnitude of the effects of railroad investment we estimate, it is very likely that these investments were not self-financing and may, therefore, have contributed to the high levels of public indebtedness observed in the period. [ABSTRACT FROM AUTHOR]

We take up Cochrane's (2011) challenge to identify the firm characteristics that provide independent information about average U.S. monthly stock returns by simultaneously including 94 characteristics in Fama-MacBeth regressions that avoid overweighting microcaps and adjust for data-snooping bias. We find that while 12 characteristics are reliably independent determinants in non-microcap stocks from 1980 to 2014 as a whole, return predictability sharply fell in 2003 such that just two characteristics have been independent determinants since then. Outside of microcaps, the hedge returns to exploiting characteristics-based predictability also have been insignificantly different from zero since 2003. [ABSTRACT FROM AUTHOR]

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The ‘Internet Revolution’ induced an unbalanced perspective on future economic growth strategies. Because information technology (IT) largely constitutes an infrastructure upon which other economic activity is based, its economic role is to facilitate the productivity of investment in a wide range of products and services that meet final demand. Other economies around the world can and are investing in the same infrastructure, so the efficiency advantages now being realized by the U.S. economy will be fleeting unless U.S. R&D efforts produce a new and broad range of innovative products and services that take advantage of this infrastructure. A deep and diverse technology-based manufacturing sector must be a core objective of a national R&D strategy. United States' manufacturing contributes $1.5 trillion to GDP, employs 20 million workers, accounts for more than 70% of industrial R&D, and constitutes the main source of technology for the larger service sector. While knowledge-based services are the largest source of economic growth for the U.S. economy, their long-term performance is highly dependent on synergies with a domestic manufacturing sector. These synergies will be even more important in the future because services are increasingly exposed to foreign competition. Knowledge-based services can be supplied from anywhere in the world—as long as these foreign sources can rapidly access and assimilate the necessary technology components. This caveat is the critical point for economic growth policy. Considerable research supports the argument that hardware and software components are most efficiently supplied to services by a manufacturing sector that is geographically close and institutionally integrated with the service applications. Policy debates have raged for decades over the nature and magnitude of underinvestment in manufacturing R&D. The need to resolve the relevant policy issues has increased, as industry is funding less of the long-term, high-risk research that creates the technology platforms supporting new industries and future economic growth. Unfortunately, only about a third of U.S. manufacturing is high-tech by conventional definitions. Some of the remaining industries develop technologies internally, but most purchase a large proportion of their technology from the high-tech sector. Because a technology acquisition strategy can be more easily imitated by foreign competitors, traditional industries are much more susceptible to exchange rate variations, global economic cycles, and secular shifts in foreign competition. Thus, with global technological capabilities relentlessly increasing, the long-term prospects for the moderate and low R&D-intensive portions of U.S. manufacturing are not good. This paper presents a conceptual framework and available data as inputs for the analysis of Federal R&D investment strategies. Such strategies must recognize the full range of public and private technology assets constituting a national innovation system. A developed and efficient innovation system has characteristics making imitation by foreign competitors difficult and thereby enables sustained competitive advantage. [ABSTRACT FROM AUTHOR]

In recent years increasing attention has been focused on the relationship between the quality of a state's system of higher education and the rate of economic growth in that state. The purpose of this paper is to examine the effect of this renewed emphasis on quality in higher education using a coalitional model of organizations as a basic framework. We operationalize two alternative models of quality, assess the costs and benefits of investments in each type of quality, and discuss prospects for educational reform. Oklahoma is used as an example of a state heavily involved in this issue. [ABSTRACT FROM AUTHOR]

Reports on the economic growth in the United States. Rise of the productivity residual during the twentieth century; Change in the bias of technological and organizational progress; Rate of return on investments.

The article presents major issues on the question of appropriate fiscal policy for encouraging economic growth, particularly in developed economies, although in part the analysis applies to underdeveloped economies as well. The first issue is that of whether the prime obstacle to more rapid economic growth is an inadequacy of savings at full employment or an inadequacy of investment necessary to allow attainment of the potential rate of capital formation as permitted by the volume of savings at full employment. A second and related issue is that of whether investment is restricted below levels regarded as optimum primarily by taxes, such as the corporate income tax, which, if not shifted, directly reduce the net return from investment, or primarily by inadequate demand for the products made with the investment goods. A third major issue is that of the conflict between considerations of equity and those relating to economic growth. Regardless of the merits of the two points of view on the question of the prime determinants of the level of investment, it would appear rather obvious that certain types of tax concessions, present or possible, affecting the return on capital should encourage investment, particularly by reducing the risk element. At the same time they violate usually accepted standards of equity.

The use of aggregate production functions of the Cobb-Douglas type to explain the sources of growth and of differences in growth rates, in recent years among eight European countries and the United States is discussed in the article. Output is related to inputs of labor and capital, together with a residual not accounted for by these factor inputs, whether measured conventionally or in efficiency units. Until recently such procedures, when applied to European countries, required the use of balance-sheet data to measure capital, but ignorance of prices and valuation methods implicit in such data has been a serious weakness. Thanks mainly to the enterprise of economists Simon Kuznets, Moses Abramovitz and their co-workers, supported by the Social Science Research Council, historical series on gross investment have recently become available for some European countries. Despite uncertainties surrounding deflation procedures and the paucity of data for estimating useful lives, such capital estimates are greatly to be preferred to figures resting on balance sheet valuations. The availability of these new data prompted the present study, preliminary results of which are given in this paper.

This paper attempts to marshal available, albeit imperfect, evidence on the relationship between water availability and economic growth in the United States over the 1950-1960 decade. Since water resource investments are currently being planned on a very large scale as tools for promoting regional economic development (e.g. Appalachia and the Southwest) and since past water resource developments have frequently been defended in terms of their favorable impact on regional development. [ABSTRACT FROM AUTHOR]

This article focuses on investment prospects in the U.S. The article is the result of early research conducted by the Committee for Economic Development, but not a product of that body. The author discusses the immediate prospect of high employment and successful investment, then addresses concerns that the form of financing of investment may lead to depression and unemployment, and finally, addresses possible forms of investment financing that will successfully avoid depression and stagnation. The author presents strategies that will facilitate the flow of cash into equity as opposed to debt, including fiscal policy recommendations relative to tax structure and state and local regulations.

The article focuses on the role imported funds play in California's (CA) economic development. It comments on the role that out-of-state mortgage investments have played in the provision of real estate facilities such as housing. It states there are six primary sources for mortgage investment funds in CA: savings and loan associations, life insurance companies, the U.S. Federal National Mortgage Association, mutual savings banks, commercial banks, and the domestic Cal-Vet program, with the single largest out-of-state investor being life insurance companies. It comments on transmission belts for capital imports with the most significant transmission belt being federal housing credit programs.

Outside the US, the commercial development of shale gas and oil will need to overcome significant legal and regulatory challenges if it is ever to take off. This study identifies several key features that have contributed to shale’s economic success in the US and applies them to three country settings where policy decisions have been taken to advance a shale resources agenda: Argentina, Colombia and the United Kingdom. Each country is at an initial stage in the development of its resources and has explored various legal instruments to advance its policy aims. In reviewing their experiences, we may be able to identify the emergence of a dedicated body of good or best practices. The study confirms that governments tend initially to rely heavily on established hydrocarbons regulatory approaches, where they exist, but that these quickly prove fragile or insufficient, and need to be supplemented by new measures and institutions targeted specifically at meeting the challenges arising from ownership, infrastructure (including local content) and consent which may otherwise inhibit investment in this energy sector. [ABSTRACT FROM AUTHOR]

US states have offered billions of dollars in film industry incentives, but despite the popularity of these incentives, the effects of these investments are unclear. This study adopts an ecological framework and tests the hypothesis that film incentives are effective when they produce changes in the composition of organizational communities. The results of longitudinal linear mixed-effects models, centred around incentive introduction in each state, show that above the impact of their dollar value, the simple presence of economic incentives, organizational diversity and the presence of dominant organizational populations are associated with increases in filming, employment and new establishments. Theoretical and policy implications are discussed. [ABSTRACT FROM AUTHOR]

Brownfield redevelopment is traditionally associated with private investments and often through public-private partnerships to result in economically beneficial ventures. Public sector investments have, therefore, traditionally not been considered as viable options due to some persistent arguments and general beliefs. This commentary discusses five common arguments against public investments in brownfield redevelopment and addresses each one by presenting approaches, views, and examples that would aim to persuade researchers, practitioners, and local governments to think otherwise. Addressing the argument that brownfield redevelopment has higher costs than benefits and that greenfield development is more economical than brownfield redevelopment, one has to see beyond perceived costs and benefits and understand the true nature of infrastructure costs and the intangible benefits of redeveloping inner-city, deteriorated, and blighted areas to be able to fully justify brownfield redevelopment. Addressing other arguments that state brownfield redevelopment is not an effective use of public funds as it does not generate tax revenue and is too complex an issue for public agencies, is that an effective use of public funds is anything, in general, that benefits residents, be it econommic, environmental, social, or health-related. Even though public investments in brownfield redevelopment might not result in an economic endeavor, it does have a positive ripple effet on nearby communities and leads to increased assessed property values that ultimately result in increased tax revenue. Finally, increasing political interest and local capacity is vital to ensuring successful brownfield redevelopment projects by public agencies. [ABSTRACT FROM AUTHOR]

The article discusses various reportedly flexible economic development tools such as tax increment financing (TIF) which are apparently used in conditions of scarcity to facilitate growth in America, focusing on Community Benefit Agreements, private gain, and public use in the U.S. Investments in local communities and the concept of self-determination are mentioned, along with social justice and human rights in America. Economic development incentives (EDIs) and collaboration are examined.