On a Class of Production Functions

In this paper, the author pays close attention to the production process where at the microeconomic level it seems plausible to assume that at the time when a piece of equipment is installed in the firm, there is no or very little room for variations in the factor proportions. However, what seems more reasonable is that at the micro economic level, for any specific type of equipment one may not only assume that the elasticity of substitution is zero or very near zero at the time when the equipment is installed, but that the elasticity of substitution would be greater the longer the period of time has elapsed. This is to say that it is more reasonable to assume that the elasticity of substitution is a variable over time. And the rest of the paper talks about this same concept and uses graphs and diagrams to aid understanding of the user.

Globalization and Country-Specific Service Links

The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A cross-section analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.Conflicting claims, Division rules, Operators, Minimal rights, Maximal claims, Duality, Convexity.

Globalization and Country-Specific Service Links

The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A crosssection analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.

A Framework For Fragmentation

Our discussion in the present paper builds upon our two earlier analyses of international fragmentation (1990, 1998), focussing upon the importance of service links in connecting fragmented production blocks. The next section of this paper probes the fundamentals of the fragmentation process and how prices may adjust in global markets. The key role of services and the importance of increasing returns are highlighted in section 3. Section 4 explores in more detail possible causes of the increased degree of fragmentation now observed in world markets. A phenomenon of utmost interest in current policy debates is the effect of globalization on the distribution of income within a country, especially in the United States. Section 5 investigates the connection between fragmentation and wage rates for less skilled workers. The final section of the paper suggests various further consequences of the fragmentation phenomenon, especially as regards the changing nature of markets in the global economy.Chapter 3 in: Arndt, S. W., & Kierzkowski, H. (2001). Fragmentation: New production patterns in the world economy. Oxford: Oxford University Press

A New Global Automotive Industry

W ciągu najbliższych dziesięcioleci w globalnym sektorze motoryzacyjnym nastąpią przełomowe zmiany. Ogromnie wzrośnie liczba użytkowników samochodów, najwięcej w krajach rozwijających się, przede wszystkim w Chinach i w Indiach. Powstają tam także nowe fabryki i przenosi się produkcję z Europy i Stanów Zjednoczonych. Prawdopodobnie przewagę na rynku uzyskają samochody zasilane prądem elektrycznym. Przyczyni się do tego rosnące zaniepokojenie zanieczyszczeniem środowiska i kurczeniem się zasobów ropy naftowej oraz skonstruowanie znacznie lepszych akumulatorów. Znaczna część spodziewanych zmian technologicznych zajdzie poza tradycyjnym sektorem motoryzacyjnym wraz z wejściem na rynek produktów takich jak superwydajne baterie, kondensatory i akumulatory nowej generacji. Koszty eksploatacji samochodów elektrycznych będą znacznie niższe niż tradycyjnych. Przemiany na rynku motoryzacyjnym powinny uzyskać wsparcie władz chińskich i indyjskich. W artykule przedstawiono propozycje takich działań.The global automotive sector will experience groundbreaking changes over the coming decades. The number of carowners will increase significantly, especially in developing countries such as China and India, where new factories are established or moved from Europe and the US. Electric cars will probably have an important share of the market because of the growing public concern for climate change, the diminishing supply of oil and better car batteries. Much of the anticipated radical change in automotive technologies will occur outside the traditional automotive sector, with products such as new potent batteries and capacitators. The cost of maintenance of the new cars will be much lower than of traditional vehicles. The changes in the automotive sector will likely be supported by the governments of China and India. The article proposes some of the actions that should be undertaken