Using the idea that firm-specific assets associated with marketing, management, and product-specific R & D can be used to service production plants in countries other than the country in which these inputs are employed, I develop a simple general equilibrium model of international trade in which the location of plants in a differentiated product industry is a decision variable. The model is then used to derive predictions of trade pattern, volumes of trade, the share of intra-industry trade, and the share of intrafirm trade as functions of relative country size and differences in relative factor endowments.

In this paper we analyze the determinants of international movements of physical capital in a model with uncertainty and international trade in goods and securities. In our model, the world allocation of capital is governed, to some extent, by the asset preferences of risk-averse consumer-investors. In a one-good variant in the spirit of the MacDougall model, we find that relative factor abundance, relative labor force size, and relative production riskiness have separate but interrelated influences on the direction of equilibrium capital movements. These same factors remain important in a two-good version with Heckscher-Ohlin production structure. In this case, the direction of physical capital flow is determinate (unlike in a world of certainty) and may hinge on the identity of the factor that is used intensively in the industry with random technology

Barnett's Divisia monetary aggregates were derived to be elements of Diewert's class of superlative quantity index numbers. Relative to aggregation theory, Barnett's resulting monetary aggregates are strictly preferable to the official sum monetary aggregates, since the component monetary assets are not perfect substitutes. Formal empirical tests based on the relevant aggregation-theoretic criteria have likewise uniformly favored the Divisia monetary aggregates. The current article compares the Divisia with the sum monetary aggregates relative to numerous conventional policy-relevant criteria. The Divisia monetary aggregates, especially at high levels of aggregation, usually perform best in these tests.

This paper argues that contracts with payment based on a ranking of employee performance can provide performance incentives even under asymmetric information that prevents payment based on individual performance only being enforceable. Such contracts also fit with five features of labor markets that have aroused considerable interest: (1) hierarchical wage structures; (2) internal promotion; (3) wage rates that rise with seniority and experience more than productivity; (4) the variance of earnings increasing with experience; and (5) wage rates attached to jobs rather than individuals with differentials set by administrative procedures rather than by reference to external market wages

Entry is widely discussed but rarely subjected to empirical study. This study develops a competitive theory of entry, with primary focus on the relationship between entry and industry growth. The main ingredients are adjustment costs to firms already in the industry and the distribution of fixed entry cost to potential entrants. The theory suggests sufficient conditions under which the entry rate is an increasing, convex function of the industry growth rate. A regression model correcting for severe heteroscedasticity is applied to data from Swedish manufacturing industries. The results are consistent with the theoretical prediction for growth and other key variables expected to influence entry significantly.

This study, which covers a sample of 314 four-digit industries taken from an exhaustive set of 450 four-digit industries, shows that increases in concentration associated with rising productivity occur mainly in low-concentration industries, while decreases in concentration associated with rising productivity occur mainly in high concentration industries. The empirical results of this study indirectly lend support to a plausible hypothesis that a small group of firms makes a big impact on the productivity of an initially unconcentrated industry and thereby concentrates it. Later, the small firms imitate the now big firms, and concentration goes down while productivity keeps rising.

Conclusions concerning trends in natural resource scarcity may depend critically on the choice of scarcity index. Unfortunately, the prevalence of vertical integration in natural resource industries has hindered the use of some otherwise desirable scarcity measures. In this paper duality theory is used to derive an econometric procedure for estimating one such measure, the shadow price of the resource in situ. Empirical results for the Canadian metal mining industry indicate that resource scarcity as measured by this shadow price has decreased substantially over time

This paper examines the effects on firm behavior and industry structure of industry-wide price regulation by the state. Such regulation, wherein regulators set prices with regard to an industry-wide aggregate performance measure, has been (and still is) widely used and is shown to induce inefficiencies in firm operation. In general such regulation can result in setting prices high enough to maintain inefficient firms, and it encourages to inefficient firm operation due to incentives to inflate costs and Averch-Johnson effects

This paper reconsiders the effects of taxation on risky assets, recognizing the importance of variations in asset prices. We show that earlier analyses that assumed that depreciation rates are constant and that the future price of capital goods is known with certainty are very misleading as guides to the effects of corporate taxes. We then examine the concept of economic depreciation in a risky environment and show that depreciation allowances, if set ex ante, should be adjusted to take account of future asset price risk. Some empirical calculations suggest that these adjustments are large and have important implications for the burdens of, and nonneutralities in, the corporation income tax

The organization of the labor market for medical interns and residents underwent a number of changes before taking its present form in 1951. The record of these changes and the problems that prompted them provides an unusual opportunity to study the forces at work in markets of this kind. The present paper begins with a brief history and then presents a game-theoretic analysis to explain the orderly operation and longevity of the current market, in contrast to the turmoil that characterized various earlier short-lived attempts to organize the market. An analysis is also given of some contemporary problems facing the market. A subsidiary theme of the paper concerns the history of ideas: the problems encountered in the organization of this market, and some of the solutions arrived at, anticipated the discussion of such issues in the literature of economics and game theory