Aggregate implications of innovation policy

In this paper we present a tractable model of innovating firms and the aggregate economy that we use to assess quantitatively the link between the responses of firms to changes in innovation policy and the impact of those policy changes on aggregate output and welfare. We show that, to a first-order approximation, a wide range of policy changes have a long-run impact in direct proportion to the fiscal expenditures on those policies, and that to evaluate the aggregate impact of a policy change, there is no need to calculate changes in firms' decisions in response to these policy changes. ; We use these results to compare the relative magnitudes of the impact on aggregates in the long run of three innovation policies in the United States: the Research and Experimentation Tax Credit, federal expenditure on R&D, and the corporate profits tax. We argue that the corporate profits tax is a relatively important policy through its negative effects on innovation and physical capital accumulation. We also use a calibrated version of our model to examine the absolute magnitude of the impact of these policies on aggregates. We show that, depending on the magnitude of spillovers, it is possible for changes in innovation policies to have very large impact on aggregates in the long run. However, over a 15-year horizon, the impact of changes in innovation policies on aggregate output is not very sensitive to the magnitude of spillovers. ; On the basis of these results we conclude that, while it is possible to make comparisons about the relative importance of different policies and sharp predictions about their aggregate impact in the medium term, it is very difficult to shed much light on the implications of innovation policies for long-run aggregate outcomes and welfare in the absence of direct quantitative evidence on the magnitude of spillovers.

Innovation, firm dynamics, and international trade

We present a general equilibrium model of the decisions of firms to innovate and to engage in international trade. We use the model to analyze the impact of a reduction in international trade costs on firms' process and product innovative activity. We first show analytically that if all firms export with equal intensity, then a reduction in international trade costs has no impact at all, in steady-state, on firms' investments in process innovation. We then show that if only a subset of firms export, a decline in marginal trade costs raises process innovation in exporting firms relative to that of non-exporting firms. This reallocation of process innovation reinforces existing patterns of comparative advantage, and leads to an amplified response of trade volumes and output over time. In a quantitative version of the model, we show that the increase in process innovation is largely offset by a decline in product innovation. We find that, even if process innovation is very elastic and leads to a large dynamic response of trade, output, consumption, and the firm size distribution, the dynamic welfare gains are very similar to those in a model with inelastic process innovation.

Pricing-to-market, trade costs, and international relative prices

International relative prices across industrialized countries show large and systematic deviations from relative purchasing power parity. We embed a model of imperfect competition and variable markups in a quantitative model of international trade. We find that when our model is parameterized to match salient features of the data on international trade and market structure in the US, it can reproduce deviations from relative purchasing power parity similar to those observed in the data because firms choose to price-to-market. We then examine how pricing-to-market depends on the presence of international trade costs and various features of market structure.Purchasing power parity

Innovation, firm dynamics, and international trade

We present a general equilibrium model of the response of firms' decisions to operate, innovate, and engage in international trade to a change in the marginal cost of international trade. We find that, although a change in trade costs can have a substantial impact on heterogeneous firms' exit, export, and process innovation decisions, the impact of changes in these decisions on welfare is largely offset by the response of product innovation. Our results suggest that microeconomic evidence on firms' responses to changes in international trade costs may not be informative about the implications of changes in these trade costs for aggregate welfare.

The Arousal Of Passions: Mob Rhetoric As An Antebellum Political Device

The Dominion of Voice is an intelligent study in the character of democratic politics before the Civil War, challenging the ideal that reasoned argument is the healthiest means to resolve political conflict. The underlying issue in the book is anti-slavery. Instead of viewing passion as an un...

Aggregate Implications of Innovation Policy

We present a tractable model of innovating firms and the aggregate economy that we use to assess the link between the responses of firms to changes in innovation policy and the impact of those policy changes on aggregate output and welfare. We argue that the key theoretical determinant of the relative long-run aggregate impact of alternative policies is their impact on the expected profitability of entering firms. We show that, to a first-order approximation, a wide range of policy changes have a long-run aggregate impact in direct proportion to the fiscal expenditures on those policies, and that to evaluate the aggregate impact of such policy changes, there is no need to calculate changes in firms' decisions in response to these policy changes. We use these results to compare the relative magnitudes of the impact on aggregates in the long run of three innovation policies in the United States: the Research and Experimentation Tax Credit, federal expenditure on R&D, and the corporate profits tax. We argue that the corporate profits tax is a relatively important policy through its negative effects on innovation and physical capital accumulation that may well undo the benefits of federal support for R&D. We also use a calibrated version of our model to examine the absolute magnitude of the impact of these policies on aggregates. We show that, depending on the magnitude of spillovers, it is possible for changes in innovation policies to have a very large impact on aggregates in the long run. However, over a 15-year horizon, the impact of changes in innovation policies on aggregate output is not very sensitive to the magnitude of spillovers. On the basis of these results we conclude that, while it is possible to make comparisons about the relative importance of different policies and sharp predictions about their aggregate impact in the medium term, it is very difficult to shed much light on the implications of innovation policies for long-run aggregate outcomes and welfare without accurate estimates as to the magnitude of innovation spillovers.

M Dwarfs from Hubble Space Telescope Star Counts. IV

We study a sample of about 1400 disk M dwarfs that are found in 148 fields observed with the Wide Field Camera 2 (WFC2) on the Hubble Space Telescope and 162 fields observed with pre-repair Planetary Camera 1 (PC1), of which 95 of the WFC2 fields are newly analyzed. The method of maximum likelihood is applied to derive the luminosity function and the Galactic disk parameters. At first, we use a local color-magnitude relation and a locally determined mass-luminosity relation in our analysis. The results are consistent with those of previous work but with considerably reduced statistical errors. These small statistical errors motivate us to investigate the systematic uncertainties. Considering the metallicity gradient above the Galactic plane, we introduce a modified color-magnitude relation that is a function of Galactic height. The resultant M dwarf luminosity function has a shape similar to that derived using the local color-magnitude relation but with a higher peak value. The peak occurs at $M_V \sim 12$ and the luminosity function drops sharply toward $M_V \sim 14$. We then apply a height-dependent mass-luminosity function interpolated from theoretical models with different metallicities to calculate the mass function. Unlike the mass function obtained using local relations, which has a power-law index $\alpha = 0.47$, the one derived from the height-dependent relations tends to be flat ($\alpha = -0.10$). The resultant local surface density of disk M dwarfs (12.2 +/- 1.6 M_sun pc^{-2}) is somewhat smaller than the one obtained using local relations (14.3 +/- 1.3 M_sun pc^{-2}). Our measurement favors a short disk scale length, H = 2.75 +/- 0.16 (statistical) +/- 0.25 (systematic) kpc.Comment: 20 pages, 10 ps figures, accepted for publication in Ap

A Participatory Information Management Framework for Patient Centred Care of Autism Spectrum Disorder

Patient-centred care (PCC) is grounded on the relationships formed between healthcare professionals, patients and patients’ family members. This network of stakeholders is frequently found to be disconnected due to the absence of an enabling framework. Active online participation and continuous engagement improves patients’ healthcare experience and healthcare professionals’ understanding of the illness. The community setting of PCC further generates crowd intelligence which in turn complements the knowledge of clinical experts. This body of evolving knowledge is a valuable resource with long term impact for both current and new patients as well as healthcare professionals. It is highly relevant for spectrum illnesses that usually span across the lifetime of a patient, such as Autism Spectrum Disorder (ASD). A framework provides structure to such a body of knowledge and defines functionality that delivers and sustains its use. This paper presents a participatory information management (PIM) framework for the delivery of PCC for ASD in a health, education and community service setting. The framework is founded on the updated IS participation theory. Driven by patient participation, it expands thereon to intersect community and clinician participation. As discussed in the paper, the potential outcomes are broad, ranging from improved healthcare quality to enabling translational research. An ongoing pilot project applying the framework to ASD is also reported in the paper