"Unfunded liabilities" and uncertain fiscal financing

A rational expectations framework is developed to study the consequences of alternative means to resolve the "unfunded liabilities" problem--unsustainable exponential growth in federal Social Security, Medicare, and Medicaid spending with no plan to finance it. Resolution requires specifying a probability distribution for how and when monetary and fiscal policies will change as the economy evolves through the 21st century. Beliefs based on that distribution determine the existence of and the nature of equilibrium. We consider policies that in expectation combine reaching a fiscal limit, some distorting taxation, modest inflation, and some reneging on the government's promised transfers. In the equilibrium, inflation-targeting monetary policy cannot successfully anchor expected inflation. Expectational effects are always present, but need not have large impacts on inflation and interest rates in the short and medium runs.

WHERE IS THE WALRASIAN AUCTIONEER FOR AGRICULTURAL MARKETS? AN EXAMINATION OF THE MARKETING INSTITUTION

In the classical development of economic equilibrium and efficiency, transaction costs are seldom considered. This study develops a micro- market model of an agricultural market based on quality differences. The study then develops a model of market structure based on the New Theory of the Firm. Using the two models, we draw conclusions about economic potential for E-Commerce.Marketing,

The brave new world: imperfect information, segregation costs, and genetically modified organisms

The introduction of genetically modified (GM) crops in the mid 1990s appeared to be the latest in a string of technological innovations in agriculture. However, consumer resistance, particularly in Europe has limited the sector’s enthusiasm. One response to the limited enthusiasm has been the emergence of segregated markets for GM and non-GM products. These separated markets reduce economic welfare because they require additional costs in the marketing system. Offsetting these segregation costs, however, the introduction of GM technologies offers increased economic welfare through reduced commodity prices for consumers who are indifferent to the presence of GM traits and increased profits to producers who adopt GM technologies. This study develops the combinations of segregation costs and increased supplies that leave societal surplus unchanged. Any GM technology that yields a larger increase in supply for any segregation cost depicted in this relationship meets the compensation principle and, thus, improves societal welfare. In this case, market based adoption of these technologies improve economic surplus. On the other hand, technologies that yields less increase in supply for any segregation cost reduces societal welfare. Under this scenario, market based adoption will not be welfare improving and, hence, government regulation may be required.genetically modified (GM) crops, compensation principle, segregation costs, Pareto principle, immiserizing growth, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,

TWO APPROACHES TO MEASURING THE ECONOMIC IMPACT OF STARLINK CORN ON U.S. PRODUCERS

The discovery of StarLink corn in U.S. food products caused considerable disruption in the corn markets in 2000 and 2001. We estimated two models on the impact of StarLink corn over the 2000/2001 marketing year. In the first model, to segregate the U.S. corn market, identity preservation costs (IP costs) were imposed on the U.S. grain handling system to deal with both domestic and export sales of food corn and export sales of non food corn to Japan. In the second model, structural changes in corn demand were taken into account. Without taking into account Loan Deficiency Payment Program (LDP) payments, significant costs were incurred by producers as a result of StarLink. However, the effectively reduced the loss in revenue that would have been caused by StarLink, since there were periods of time immediately following the discovery of StarLink during which the market price dropped below the loan rate for corn. It was estimated that StarLink caused U.S. producers to lose between $25 and$290 million in revenue.Research and Development/Tech Change/Emerging Technologies,

Methodology for Comparison of Algorithms for Real-World Multi-objective Optimization Problems: Space Surveillance Network Design

Space Situational Awareness (SSA) is an activity vital to protecting national and commercial satellites from damage or destruction due to collisions. Recent research has demonstrated a methodology using evolutionary algorithms (EAs) which is intended to develop near-optimal Space Surveillance Network (SSN) architectures in the sense of low cost, low latency, and high resolution. That research is extended here by (1) developing and applying a methodology to compare the performance of two or more algorithms against this problem, and (2) analyzing the effects of using reduced data sets in those searches. Computational experiments are presented in which the performance of five multi-objective search algorithms are compared to one another using four binary comparison methods, each quantifying the relationship between two solution sets in different ways. Relative rankings reveal strengths and weaknesses of evaluated algorithms empowering researchers to select the best algorithm for their specific needs. The use of reduced data sets is shown to be useful for producing relative rankings of algorithms that are representative of rankings produced using the full set

INSTITUTIONAL ECONOMICS AND THE EMERGENCE OF E-COMMERCE IN AGRIBUSINESS

The emergence of E-commerce in the 1990s heralded the arrival of the New Economy. However, the failure of numerous dotcoms since early 2001 has led to a debate regarding the future direction of E-commerce and its potential relevance for agribusiness. This study examines the economic implications of E-commerce for agribusiness within the framework of New Institutional Economics. The New Institutional Economics implies that E-commerce has the potential to reduce direct transactions costs in agricultural markets, but that it also may add additional indirect transactions costs. Depending upon the tradeoff between these costs, an institutional innovation which reduces the transactions costs may provide the impetus for an alternative marketing channel for agricultural output. Two models of institutional change are explored. The North model of changes in the rules of the game is found to be more consistent with the advent of E-commerce than the model of technological change suggested by Schumpeter.E-commerce, marketing channels, New Institutional Economics, Schumpeter, Agribusiness, Institutional and Behavioral Economics,

Evaluation of a Maximum A-Posteriori Slope Estimator for a Hartmann Wavefront Sensor

Current methods for estimating the wavefront slope at the aperture of a telescope using a Hartmann wavefront sensor are based upon a centroid shift estimator. The centroid shift estimator determines the displacement, or shift, of the centroid off the optical axis using a moment calculation of the intensity distributions recorded in each subaperture. This centroid shift is proportional to the average slope of the wavefront in each subaperture. A maximum a-posteriori (MAP) slope estimator takes advantage of a-priori knowledge of the wavefront slope statistics and total irradiance falling on the subaperture detector arrays when determining the shift estimate. In order to derive a closed form solution for the MAP estimator, several assumptions were made: infinite resolution on the detector arrays, no read noise in the detection process, and no intensity spillover into adjacent subapertures. By implementing the Hartmann wavefront sensor and MAP estimator in simulation, the performance of the MAP estimator was evaluated using realizable wavefront sensor parameters. While the MAP estimator mean square error (MSE) performance decreased relative to the centroid estimator MSE performance as a result of spillover, finite detector resolution, and read noise, the MAP estimator MSE performance was found to be upper bounded by the centroid estimator MSE in all cases

Detecting mistakes in engineering models: the effects of experimental design

This paper presents the results of an experiment with human subjects investigating their ability to discover a mistake in a model used for engineering design. For the purpose of this study, a known mistake was intentionally placed into a model that was to be used by engineers in a design process. The treatment condition was the experimental design that the subjects were asked to use to explore the design alternatives available to them. The engineers in the study were asked to improve the performance of the engineering system and were not informed that there was a mistake intentionally placed in the model. Of the subjects who varied only one-factor-at-a-time, fourteen of the twenty-seven independently identified the mistake during debriefing after the design process. A much lower fraction, one out of twenty-seven engineers, independently identified the mistake during debriefing when they used a fractional factorial experimental design. Regression analysis shows that relevant domain knowledge improved the ability of subjects to discover mistakes in models, but experimental design had a larger effect than domain knowledge in this study. Analysis of video tapes provided additional confirmation as the likelihood of subjects to appear surprised by data from a model was significantly different across the treatment conditions. This experiment suggests that the complexity of factor changes during the design process is a major consideration influencing the ability of engineers to critically assess models.Charles Stark Draper LaboratorySUTD-MIT International Design Centr

Oral history interview transcript with Janet Anderson

Oral history interview transcript with Janet Anderson. Her topic concerns Title 9 and her work on the Cheney Free Press. Interviewer: Troy Prah