Lall Ramrattan

Samuelsonian Economics and the Twenty-First Century

This volume illuminates and critically assesses Paul A. Samuelsons voluminous and groundbreaking contributions to the field of economics. The volume includes contributions from eminent scholars, including 6 Nobel Laureates, covering the extraordinary depth and breadth of Samuelsons contributions. Samuelson, the first American economist to win the Nobel prize in 1970, was the foremost voice in economics in the latter half of the 20th century. He single-handedly transformed the discipline by creating a new way of presenting economics, making it possible for it to be cast all in mathematical terms. Samuelson developed broad frameworks, such as the neoclassical synthesis, a mixed economy, and the surrogate production function, which provided practitioners with a vision for research. Samuelsons contributions to economics are rich, complex, consequential, and relevant to the ordinary economics of life. The quality of Samuelsons output and methods leave no doubt that his contributions continue to be timely and relevant even in the 21st century. Ideal as a reference or an introduction to Samuelsons work, this is a must-have for students and academics alike. Contributors to this volume - James B. Cooper, Johannes Kepler University, Austria Rod Cross, University of Strathclyde, UK Paul Davidson, University of Tennessee Peter Diamond, MIT Avinash Dixit, Princeton University Franklin Fisher, MIT Milton Friedman, Stanford University Geoff Harcourt, Cambridge University Lawrence R. Klein, University of Pennsylvania Laurence J. Kotlikoff, Boston University Rachel McCulloh, Brandeis University Harry M. Marowitz, University of California, San Diego Robert C. Merton, Harvard University Paul Milgrom, Stanford University William D. Nordhaus, Yale University Luigi Pasinetti, Universita Cattolica del Sacro Cuore, Milano Robert A. Pollak, Washington University Lall Ramrattan, University of California, Berkeley Kenneth Rogoff, Harvard University Thomas Russell, Santa Clara University Robert M. Solow, MIT Joseph E. Stiglitz, Columbia University Michael Szenberg, Pace University Hal R. Varian, University of California, Berkeley

Reflections of Eminent Economists

Foreword by Kenneth Arrow Preface Introduction: Aron Gottesman, Lall Ramrattan and Michael Szenberg 1. Irma Adelman 2. Bela Balassa 3. Carolyn Shaw Bell 4. Barbara Bergmann 5. Mark Blaug 6. Martin Bronfenbrenner 7. Graciela Chichilnisky 8. Richard A. Easterlin 9. Ronald Ehrenberg 10. Victor R. Fuchs 11. Roger W. Garrison 12. Eli Ginzberg 13. Edward M. Gramlich 14. Everett E. Hagen 15. G.C. Harcourt 16. E. Malinvaud 17. Harry M. Markowitz 18. Allan H. Meltzer 19. Geoffrey H. Moore 20. Walter Y. Oi 21. Mark Perlman 22. Kurt W. Rothschild 23. F.M. Scherer 24. Julian L. Simon 25. Hirofumi Uzawa 26. Sir Alan Walters

Ranking of Economic Journals: A Statistical Survey and Analysis

This paper presents the results of a sample survey of economics journals and investigates the implications of unanswered questions raised in the literature especially those involving the supply side that is the production or input characteristics of journals. First, we explored the data using standard multivariate techniques. Based on the input characteristics, we were able to discern two rankings of 41 and 72 journals, respectively, depending on whether or not compensation data was included. Second, we specified a simultaneous econometric model using the Generalized Method of Moment estimator to extract significant coefficients for a priori specified parameters in the literature. The results offer newer insights on the ongoing question of the place of journals in the discipline of economics.

GLOBAL COMPETITION AND THE UNITED STATES PHARMACEUTICAL INDUSTRY

Within the background of the global economy, the authors evaluate competition among domestic firms, and ascertain impact on the domestic pharmaceutical industry. This paper analyzes the industrys structure, conduct and performance to show that the pharmaceutical industry did not escape the effects of free trade areas and global competition, despite the general view that it is a high-profit industry. The U.S. government aided the industry in the areas of lengthening of patents life, allowing mergers, and the negotiation of international property rights. Also, firms have come to embrace increased rivalries in the areas of non-price tactics. We found small firms reacting to a leader, such as Merck, previous R&D and advertising outlays, and that they find a haven in the area of generics rather then basic research. The industry embraces an array of price strategies, relating to generics and the lack of information about prices at home, and unfair competition from abroad, an area where the government could play a larger role. Several hypotheses based on the literature have been advanced to ascertain these results.

R&D Rivalry in the U.S. Automobile Industry: A Simultaneous Equation Model Approach to Bain's Hypothesis

This paper investigates rivalry in R&D expenditures for firms within the U. S. Automobile industry. It attempts to falsify Bains paradigm that firms in that industry collude in price, and compete primarily in advertising and secondarily in R&D expenditures. We start with a single equation model of an earlier specification that falsified R&D rivalry for the auto industry, using a smaller sample size. The result also was insignificant, lending credence to Bains idea that a more concerted effort is needed to ascertain R&D rivalry. To accommodate Bains hypothesis, we embedded the R&D equation within a system of equations framework, where interactions between advertising, dividend, investment, and finance are co-determined. The system model gained efficiency through explicit specifications for technological and marketing constraints. The results corroborate Bains hypotheses that R&D rivalry is present only when R&D expenditure is foiled with advertising and other financial ratios.

New frontiers in economics

Leading economists analyze the new directions that subdisciplines of economics have taken in the face of modern economic challenges. These essays represent invention and discovery in the areas of information, macroeconomics and public policies, international trade and development, finance, business, contracts, law, gaming, and government, as these areas of study evolve through the different phases of the scientific process. They offer a wealth of factual information on the current state of the economy. Theoretical and empirical innovations conceptualize reality and values in different ways from their predecessors. Together the essays offer the reader a balanced look at the various fields, approaches, and dimensions that comprise future directions in economic theory, research, and practice. The extensive introduction by the editors not only summarizes and reviews the implications of the contributions presented in the volume, but also examines how scientific progress takes place, with special reference to economics and finance.

ADVERTISING RIVALRY IN THE U. S. AUTOMOBILE INDUSTRY: A TEST OF BAIN'S HYPOTHESIS

This paper examines Bains Hypothesis that firms in the automobile industry engage in advertising competition and price collusion. It develops a game theoretic model, basing price on product characteristic and advertising on pure and mixed strategies. Solution concepts such as Cournot, Nash and Prisoners dilemma are possible. The paper then moves into regression results of advertising outlays in newspaper, general magazines, spot television, and network television, given the firms cashflow, OPEC influence, and Leader-follower hypotheses. When multicolinearity and serial correlation are adjusted for, the results corroborate Bains advertising hypothesis with price collusion.

Paul A. Samuelson: philosopher and theorist

Purpose – To assess not how Samuelsons individual models contributed to human knowledge but the very true foundation on which they rest, namely, sound theory, facts, and philosophy. Design/methodology/approach – This article has placed Samuelson as a philosopher seeking the truth, and as a theoretical contributor to the many sub-disciplines of economics. Findings – Shows that his truths bear the evidence of reality, and that his theoretical contributions are not different in kind from the logical theorists. Demonstrates how easily one could formulate a Samuelsonian impossibility theorem that places his thought on the level of the mathematical research started by Hilbert and concluded by Kurt Godel. Originality/value – The literature that has assessed his contributions in this regard is fragmented, and myopically sparse, leaving gaps to be filled in by a paper such as this.

TRADE ADJUSTMENT ASSISTANCE AND IMPORT COMPETITION: Experience in the U.S. Footwear Industry: 1980-1997

This article analyzes the Trade Adjustment Assistance (TAA) program within NAFTA, the U.S.-Israel Free Trade Agreement (FTA), U.S.-Canada-FTA, and the Orderly Market Agreement (OMA) for the footwear industry. It evaluates costs and benefits as well as factors affecting TAAs certification and denial processes following trade liberalization. A three-stage least-squares (3TLS) model correlates the a priori specifications we developed from the literature and evaluates TAAs enhancement of net consumer surplus. The benefits have significant, independent effects on four census regions of the United States engaged in footwear production. A simulation of the results indicates some robustness in the estimates and supports the Department of Labor (DOL) rule-of-thumb statements of job gains due to trade liberalization. The results are supportive of the bipartisan NAFTA agreement. Due to TAAs benefits to displaced workers, positive net benefits have been substantial from the inception of NAFTA, in 1994, to 1997.

Distribution Channels of the American Book Industry: A Play of Digital Technology

The classical economist, Alfred Marshall wrote that, “. . . the booksellers get too large a share of the price of those books which appeal to relatively small audiences. . . Authors work: publishers exercise judgment and take risks. But I cannot discover what booksellers do for the extension of knowledge.” Marshall would not be surprised at the rapid changes now taking place in the field of book distribution. He might have reasoned that the advent of new technology was wanting in order for booksellers to discover their proper place in the industry. He would have lauded the market forces that brought new entrants such as Amazon, Barnes and Nobles, and Book-a-Million into competition on the internet. The shifting structure of the American Book Industry, which appears as quicksand, might not have alarmed Marshall as “the forces of demand and supply have free play” when they are subject to displacement. Marshall would have witnessed that booksellers mediate the “blade of a pair of scissors” operating under market forces, and we eagerly await for the circumstance that like two balls “against one another in a bowl” they would come to rest as under the force of gravity.