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To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1467-8586.2008.00302.x Byline: Mark A. Roberts (*) Keywords: equity; finance; growth; imperfect competition; profits Abstract: ABSTRACT If households have finite lives, the effect of imperfect competition in the financial sector on economic growth depends also on how its profits are returned. The return may be exogenous though fiscal transfers to the young and/or the old or endogenous through dividend payments to a subset of old households that have acquired financial sector equity. Returning financial profits to the old, either exogenously or endogenously, unambiguously reduces growth, but through the two respective mechanisms of consumption-smoothing and of encouraging 'unproductive saving'. As the latter is the more powerful, a public pension paid for by taxing financial profits will raise steady-state growth rate. However, the main results are that if profits are returned to the young, growth will be highest with monopolistic finance, if the elasticity of intertemporal substitution is sufficiently low; and, generally, the number of Nash-Cournot financial firms that maximizes growth is increasing in the value of this parameter. Author Affiliation: (*)University of Nottingham, Nottingham, UK Article note: Correspondence: School of Economics, University of Nottingham, University Park, Nottingham, NG7 2RD, UK. Tel: +44-1159-515460; Fax: +44-1159-514159; Email: mark.roberts@nottingham.ac.uk. I thank two anonymous referees and Mike Bleaney for useful comments on an earlier version of this paper, as well as the participants of the Centre for Growth and Business Cycle Research Conference, Manchester, July 2007, and the attendants at an Economic Theory Workshop at the University of Nottingham, November 2007, for comments on this present version. I alone, of course, am responsible for any remaining shortcomings.

An estimable structural model of the joint export-investment decision is presented. Firms invest in research and development (R&D) and physical capital which can affect future productivity for the firm in this model. This model provides equations for the policy functions of R&D investment, physical investment, and exporting decisions.

Results of previous studies regarding conditional convergence are usually interpreted within a neoclassical growth framework. Because of this, findings may be thought to discriminate against other approaches to growth, specifically the Kaldorian approach to growth. Results of a study disprove this premise. Findings show that the Kaldor-Dixon-Thirlwall model predicts conditional convergence of a qualitatively identical nature to that which is predicted by the neoclassical growth framework.

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1468-0262.2007.00769.x Byline: Sanghamitra Das (*), Mark J. Roberts (**), James R. Tybout (1) Keywords: Dynamic export supply; plant heterogeneity; sunk costs; uncertainty Abstract: As the exchange rate, foreign demand, and production costs evolve, domestic producers are continually faced with two choices: whether to be an exporter and, if so, how much to export. We develop a dynamic structural model of export supply that characterizes these two decisions. The model embodies plant-level heterogeneity in export profits, uncertainty about the determinants of future profits, and market entry costs for new exporters. Using a Bayesian Monte Carlo Markov chain estimator, we fit this model to plant-level panel data on three Colombian manufacturing industries. We obtain profit function and sunk entry cost coefficients, and use them to simulate export responses to shifts in the exchange-rate process and several types of export subsidies. In each case, the aggregate export response depends on entry costs, expectations about the exchange rate process, prior exporting experience, and producer heterogeneity. Export revenue subsidies are far more effective at stimulating exports than policies that subsidize entry costs. Author Affiliation: (*)Planning Unit, Indian Statistical Institute, 7SJS Sansanwal Marg, New Delhi 110016, India;dasm@isid.ac.in (**)Dept. of Economics, Pennsylvania State University, 513 Kern Building, University Park, PA 16802, U.S.A., and National Bureau of Economic Research;mroberts@psu.edu (***)Dept. of Economics, Pennsylvania State University, 517 Kern Building, University Park, PA 16802, U.S.A., and National Bureau of Economic Research;jtybout@psu.edu Article History: Manuscript received November, 2001; final revision received October, 2006.

We reconsider pay-as-you-go (PAYG) pension policy in a version of the Diamond overlapping generations model with an imperfectly competitive financial sector and with a low rate of tax on its profits. PAYG then has two effects on capital: the well-known negative crowding-out effect in displacing savings and a positive effect in reducing a second form of crowding-out caused by the displacement of 'productive savings' in capital by 'non-productive savings' in financial sector equity. These two countervailing effects may generate a hump-shaped steady-state relationship between the PAYG contribution rate and the capital stock.

This paper studies coverage extension in a simple general equilibrium model with a dual labour market. The union sector is characterized by two-stage bargaining whereas the firms set wages in the non-union sector. In this model firms and unions of the union sector have a commonality of interest in extending coverage of a minimum wage to the non-union sector. Furthermore, the union sector does not seek to increase the non-union wage to a level above the market-clearing wage. In fact, it is optimal for the union sector to impose a market-clearing wage on the non-union sector. Finally, coverage extension increases welfare in this model.

An analysis of market entry with sunk costs as in the case of Colombian firms' decision to export reveals that sunk costs and prior exporting experience can have a significant effect on management decisions. A model based on panel data of large Colombian manufacturing firms is presented to quantify unpredictable responses of trade flows to exchange rate movements. The model demonstrates that sunk costs are significant and that prior export experience can increase the probability of exporting by as much as 60%.

This paper examines how output prices and markups vary across the size distribution of producers. It uses unique plant-level data on physical output, revenue, and input expenditures for six homogeneous U.S. manufactured products. The results reveal that, for five of the six products, output prices decline systematically with increases in plant size. In the most extreme case, corrugated boxes, the smallest producers have prices that average 20 percent above the mean price while the largest producers average 10 percent below the mean. At the other extreme, the price dispersion for gasoline is small and unrelated to plant size. Plant-specific markups of price over marginal cost vary across the size distribution of producers for five of the products. In three cases they decline, in two cases they increase, and one product, gasoline, shows no systematic variation. Keywords: Price dispersion; Markups; Establishment data

Within a broader setting of rational expectations, where agents do not fully know the parameter values of the model, expectations errors from past observable and persistent shocks will lead to systematic effects. In particular, observable lagged current account shocks will affect the exchange rate within a Mundell-Flemming model even where there is perfect capital mobility. Moreover, the process of agents learning unknown parameter values and revising the values of the forecast parameters would suggest the use of a variable coefficient estimation method to capture the data-generating process outside strong-form rational expectations. Key words: Exchange rate; Rational expectations; Imperfect information; Trade account; Learning

Analysis of the rational expectations hypothesis (REM) reveals that it can be applied to explain the liquidity trap theory of Keynes analysis of the gold standard. However, certain conceptual problems may arise in arriving at deductions if REM is applied to analyze equity fluctuations in the market.

Background Whole genome sequencing (WGS) surveillance and electronic health record data mining have the potential to greatly enhance the identification and control of hospital outbreaks. The objective was to develop methods for examining economic value of a WGS surveillance-based infection prevention (IP) program compared to standard of care (SoC). Methods The economic value of a WGS surveillance-based IP program was assessed from a hospital's perspective using historical outbreaks from 2011–2016. We used transmission network of outbreaks to estimate incremental cost per transmission averted. The number of transmissions averted depended on the effectiveness of intervening against transmission routes, time from transmission to positive culture results and time taken to obtain WGS results and intervene on the transmission route identified. The total cost of an IP program included cost of staffing, WGS, and treating infections. Results Approximately 41 out of 89 (46%) transmissions could have been averted under the WGS surveillance-based IP program, and it was found to be a less costly and more effective strategy than SoC. The results were most sensitive to the cost of performing WGS and the number of isolates sequenced per year under WGS surveillance. The probability of the WGS surveillance-based IP program being cost-effective was 80% if willingness to pay exceeded $2400 per transmission averted. Conclusions The proposed economic analysis is a useful tool to examine economic value of a WGS surveillance-based IP program. These methods will be applied to a prospective evaluation of WGS surveillance compared to SoC. [ABSTRACT FROM AUTHOR]

Using data envelopment analysis, we calculate indices of total factor productivity (TFP), efficiency and technological change for the manufacturing sectors of 68 European NUTS1 regions over the period 1986-2002. We subsequently examine these indices using exploratory spatial data analysis (ESDA) techniques, before considering tendencies towards convergence in both TFP and technical efficiency levels. While the ESDA reveals significant spatial autocorrelation, the convergence analysis uncovers no tendency for regions with initially lower TFP to catch up with regions with initially higher TFP. However, convergence is found in levels of technical efficiency, although towards a relatively lower average level.

A logit analysis of the vote on the Indian Removal Act of 1830 and Preemption Act which authorized the president of the United States to exchange land west of the Mississippi River for Indian land in the east is presented. The findings suggest that willingness of squatters to illegally occupy federal lands greatly raised the cost of enforcing property rights which was significant factor behind the passage of the first general Preemption Act in 1830.

We use micro panel data for producers in seven two-digit manufacturing industries in South Korea and Taiwan and identify a number of systematic differences in industry structure between the countries. Our empirical findings indicate Taiwanese industries are characterised by less concentrated market structure, more producer turnover, smaller within-industry productivity dispersion across producers, a smaller percentage of plants operating at low productivity levels, and smaller productivity differentials between surviving and failing producers. These patterns are consistent with strong competitive pressures in Taiwan that lead to market selection based on productivity differences. The patterns in Korea are consistent with the presence of some impediments to exit or entry that insulate inefficient producers from market pressures.

High rates of firm entry and exit have accompanied the rapid and sustained growth of output in Taiwan's manufacturing sector. A high rate of firm turnover can contribute to industry productivity growth if it reflects a transfer of resources from less efficient to more efficient producers. Using comprehensive firm-level panel data from the Taiwanese Census of Manufactures for 1981, 1986, and 1991, we measure total factor productivity for entering, exiting, and continuing cohorts of firms and quantify the contribution of firm turnover to industry productivity improvements. Across manufacturing firms, we find significant differences in productivity that are reflected in turnover patterns. Cohorts of new firms have lower average productivity than incumbents but are themselves a heterogeneous group. The more productive members of the group, on average, survive and, in many cases, their productivity converges to the productivity level of older incumbents. Exiting firms are less productive than survivors. The productivity differential between entering and exiting firms is an important source of industry-level productivity growth in Taiwanese manufacturing, accounting for as much as one-half of industry improvement in some industries and time periods. JEL classification: O12; D24; O47; F14 Keywords: Total factor productivity; Entry; Exit; Taiwan manufacturing

Objective: Multiple treatment options are available for patients who do not respond to initial treatment for major depressive disorder. Previous results show that bupropion, sertraline, and venlafaxine are comparable in terms of therapeutic effectiveness following unsuccessful treatment with citalopram. In this study, we extended these results by incorporating costs of treatment to determine if one option was more cost-effective relative to others.Methods: In the STAR*D (Sequenced Treatment Alternatives to Relieve Depression) trial, 727 patients were randomly assigned to a switch drug treatment during level 2; 239 (33%) were assigned to bupropion, 238 (33%) to sertraline, and 250 (34%) to venlafaxine. For each study medication, the total costs included the costs of the medication, other concomitant medication and antidepressants, and health care facility utilization. Effectiveness was measured as remission and response. Cost-effectiveness was assessed as net health benefits. Stochastic analysis was performed by using the bootstrapping method.Results: During level 2, mean medication costs were significantly higher for venlafaxine than for bupropion and sertraline ($968, $607, and $703, respectively). There were no significant differences among the switch medications in costs for other medications and health care facility utilization. Although the total costs were significantly different for the three medications (p=.025), none of the pairwise differences between medications were significant. Also, after jointly estimating costs and effects, the analyses found that net health benefits were not significantly different among the three drugs.Conclusions: After unsuccessful treatment with citalopram, the switch options of bupropion, sertraline, and venlafaxine were not significantly different from each other in terms of cost-effectiveness. [ABSTRACT FROM AUTHOR]

The authors analyze the role of competing interest groups in the determination of regulated prices. They first develop a general model of regulatory support maximization and demonstrate how observed prices can be used to identify the role of competing interest groups in the regulatory process. They then apply the methodology to electricity rates in 1978 for a sample of 65 privately owned utilities. The empirical results show that industrial customers face the highest Ramsey numbers and that this difference is explained largely by the utility's profit, relative size of the industrial sector, and oil dependence within the state. (Reprinted by permission of the publisher.), Ramsey Numbers and the Role of Competing Interest Groups in Electric Utility Regulation The study of the role of interest groups in the regulatory process has led to recognition that [...]

Three measures of economies of density and size are developed to analyze the costs to electric utilities for delivering electricity to geographically dispersed customers. The measures estimate firm size differences in the average cost of supplying power by taking into account the ways in which changes in output can occur. The empirical results suggest that: there is no substantial decline in the average cost of delivered power when output is increased to serve an increased number of customers; no significant economies result from increased customer density; and there is no substantial decline in the average cost of delivered power when output is increased to serve a larger geographic area. There are significant reductions in ray average costs by increasing output to existing customers.

Background: The prevalence of hepatitis C virus (HCV) in U.S. prisoners is high; however, HCV testing and treatment are rare. Infected inmates released back into society contribute to the spread of HCV in the general population. Routine hepatitis screening of inmates followed by new therapies may reduce ongoing HCV transmission.Objective: To evaluate the health and economic effect of HCV screening and treatment in prisons on the HCV epidemic in society.Design: Agent-based microsimulation model of HCV transmission and progression of HCV disease.Data Sources: Published literature.Target Population: Population in U.S. prisons and general community.Time Horizon: 30 years.Perspective: Societal.Interventions: Risk-based and universal opt-out hepatitis C screening in prisons, followed by treatment in a portion of patients.Outcome Measures: Prevention of HCV transmission and associated disease in prisons and society, costs, quality-adjusted life-years (QALYs), incremental cost-effectiveness ratio (ICER), and total prison budget.Results Of Base-case Analysis: Implementing risk-based and opt-out screening could diagnose 41,900 to 122,700 new HCV cases in prisons in the next 30 years. Compared with no screening, these scenarios could prevent 5500 to 12,700 new HCV infections caused by released inmates, wherein about 90% of averted infections would have occurred outside of prisons. Screening could also prevent 4200 to 11,700 liver-related deaths. The ICERs of screening scenarios were $19,600 to $29,200 per QALY, and the respective first-year prison budget was $900 to $1150 million. Prisons would require an additional 12.4% of their current health care budget to implement such interventions.Results Of Sensitivity Analysis: Results were sensitive to the time horizon, and ICERs otherwise remained less than $50,000 per QALY.Limitation: Data on transmission network, reinfection rate, and opt-out HCV screening rate are lacking.Conclusion: Universal opt-out HCV screening in prisons is highly cost-effective and would reduce HCV transmission and HCV-associated diseases primarily in the outside community. Investing in U.S. prisons to manage hepatitis C is a strategic approach to address the current epidemic.Primary Funding Source: National Institutes of Health. [ABSTRACT FROM AUTHOR]

Background In the current report, we ask if targeting a cognitive behavioral therapy ( CBT)-based intervention aimed at reducing hazardous alcohol consumption to HIV-infected persons in East Africa would have a favorable value at costs that are feasible for scale-up. Methods Using a computer simulation to inform HIV prevention decisions in East Africa, we compared 4 different strategies for targeting a CBT intervention-(i) all HIV-infected persons attending clinic; (ii) only those patients in the pre-antiretroviral therapy ( ART) stages of care; (iii) only those patients receiving ART; and (iv) only those patients with detectable viral loads (VLs) regardless of disease stage. We define targeting as screening for hazardous alcohol consumption (e.g., using the Alcohol Use Disorders Identification Test and offering the CBT intervention to those who screen positive). We compared these targeting strategies to a null strategy (no intervention) or a hypothetical scenario where an alcohol intervention was delivered to all adults regardless of HIV status. Results An intervention targeted to HIV-infected patients could prevent 18,000 new infections, add 46,000 quality-adjusted life years ( QALYs), and yield an incremental cost-effectiveness ratio of $600/ QALY compared to the null scenario. Narrowing the prioritized population to only HIV-infected patients in pre- ART phases of care results in 15,000 infections averted, the addition of 21,000 QALYs and would be cost-saving, while prioritizing based on an unsuppressed HIV-1 VL test results in 8,300 new infections averted, adds 6,000 additional QALYs, and would be cost-saving as well. Conclusions Our results suggest that targeting a cognitive-based treatment aimed at reducing hazardous alcohol consumption to subgroups of HIV-infected patients provides favorable value in comparison with other beneficial strategies for HIV prevention and control in this region. It may even be cost-saving under certain circumstances. [ABSTRACT FROM AUTHOR]

There is significant academic evidence that growth in one country has a positive impact on growth in neighbouring countries. This paper contributes to this literature by analysing the heterogeneous strength of growth spillovers across world regions and by investigating the contribution of transport and communication infrastructure to explain this heterogeneity and promote neighbourhood effects. By defining neighbourhood on the basis of membership of regional trade agreements, we focus on spillovers that work through regional integration and trade. The analysis finds significant evidence for heterogeneity in growth spillovers, which are strong between OECD countries and essentially absent in sub-Saharan Africa (SSA). We further find strong interaction between infrastructure and being a landlocked country. This suggests that growth spillovers from regional 'success stories' in SSA and other lagging world regions will depend on first strengthening the channels through which such spillovers can spread - most importantly connective infrastructure such as transport and telecommunication links. [ABSTRACT FROM AUTHOR]

This paper estimates a dynamic structural model of a producer's decision to invest in R&D and export, allowing both choices to endogenously affect the future path of productivity. Using plant-level data for the Taiwanese electronics industry, both activities are found to have a positive effect on the plant's future productivity. This in turn drives more plants to self-select into both activities, contributing to further productivity gains. Simulations of an expansion of the export market are shown to increase both exporting and R&D investment and generate a gradual within-plant productivity improvement. (JEL D24, F14, G31, L63, O31, O33) [ABSTRACT FROM AUTHOR]

It has long been an article of faith amongst regional economists that increasing returns to scale are necessary to explain the punctiform location of economic activity and population. However, there is no consensus in the empirical literature over whether returns to scale are constant or increasing. A notable example of this lack of agreement is provided by the static-dynamic Verdoorn law paradox. While the dynamic Verdoorn law (specified using growth rates) yields estimates of substantial increasing returns to scale, the static Verdoorn law (specified using log-levels) indicates only the presence of constant returns to scale. In this paper, we explain the static-dynamic Verdoorn law paradox by showing that estimates of returns to scale obtained using the static law are subject to a spatial aggregation bias, which biases the estimates towards constant returns to scale. We illustrate our arguments by means of simulation exercises. The results obtained hold general lessons for applied economic analysis using spatial data. [ABSTRACT FROM AUTHOR]

In this article the authors will combine elements from the entry, exit and growth literature to study the effect of entry on the structure of the U.S. chemical industries over the 1967-82 period. The research papers were considered to be state-of-the-art empirical papers. None, however, provided significant methodological advances. The limitations of the research studies were enumerated. Generic questions that should provide guidance to a reader trying to decide on the instructive value of the research papers were presented.

Argues that the property of independence in the forward-solution of a linear dynamic RE model is lost where a bubble component has non-zero higher-order moments. Effects of implicit agents which are not risk-neutral; Impact of nonstationary conditional higher-order moments; Details on the study.

The article discusses research on the hospitalization of young women and adolescents for treatment of pelvic inflammatory disease (PID). The aim of the study was to determine the economic feasibility of the hospitalization of nulliparous women for PID. The study has revealed that routinely hospitalizing young women and adolescents for PID is not economically sensible, even if material improvements in complication rates are assumed.