Recurrence of cocycles and stationary random walks

We survey distributional properties of $\mathbb{R}^d$-valued cocycles of finite measure preserving ergodic transformations (or, equivalently, of stationary random walks in $\mathbb{R}^d$) which determine recurrence or transience.Comment: Published at http://dx.doi.org/10.1214/074921706000000112 in the IMS Lecture Notes--Monograph Series (http://www.imstat.org/publications/lecnotes.htm) by the Institute of Mathematical Statistics (http://www.imstat.org

Standards, Innovation Incentives, and the Formation of Patent Pools

Technological standards give rise to a complements problem that affects pricing and innovation incentives of technology producers. In this paper I discuss how patent pools can be used to solve these problems and what incentives patent holders have to form a patent pool. I offer some suggestions how competition authorities can foster the formation of welfare increasing patent pools

Symmetric Gibbs measures

We prove that certain Gibbs measures on subshifts of finite type are nonsingular and ergodic for certain countable equivalence relations, including the orbit relation of the adic transformation (the same as equality after a permutation of finitely many coordinates). The relations we consider are defined by cocycles taking values in groups, including some nonabelian ones. This generalizes (half of) the identification of the invariant ergodic probability measures for the Pascal adic transformation as exactly the Bernoulli measures---a version of de Finetti's Theorem. Generalizing the other half, we characterize the measures on subshifts of finite type that are invariant under both the adic and the shift as the Gibbs measures whose potential functions depend on only a single coordinate. There are connections with and implications for exchangeability, ratio limit theorems for transient Markov chains, interval splitting procedures, `canonical' Gibbs states, and the triviality of remote sigma-fields finer than the usual tail field

Corporate restructuring and export performance in the transition process: The case of Eastern Germany

Economic restructuring in the transition from plan to market concerns the way enterprises try to achieve competitive advantage. Therefore, enterprises have to decide where to compete, that is to say with which product they should enter which markets, and how to compete, that is by which strategy they could succeed. During the seven years since unification, the eastern German economy has undergone considerable structural changes. However, the outcome is a poor market specialization: industries which sell their products mainly in local markets have remarkably increased their share in total output, while industries producing for world-wide markets have lost importance. Sailing into the safe harbour of local markets may be the need of the moment for many companies. But it is a dangerous strategy. In the long run, it may prove to be a trap without any escape. The paper provides a selective and interpretative account of the restructuring process in eastern German manufacturing. It starts with the given constraints - exchange rate and wage convergence - which constitute the wrong model for opening up a closed economy. It presents some stylized facts revealing a strong vertical differentiation between eastern and western German producers - with respect to product quality and product markets as well as with respect to technological and organizational environment. As a result, the division of labour between the eastern German economy and the rest of the world tends to be an inter-industry type rather than an intra-industry one. Finally, the paper turns to the key policy question of how to overcome these difficulties. It scrutinizes the main arguments for and against government's trade promotion towards eastern German enterprises.

Deutschmark appreciation and structural change: An overview of economic structural reports

Changes in exchange rates have become a prominent issue in Germany and Japan - due to the enormous appreciation of the Deutschmark and the Yen. Conventional wisdom suggests that economic activity will be negatively affected if a currency is going through a phase of appreciation. The paper emphasizes the impact of the strong Deutschmark appreciation on structural change and economic growth in Germany in the 1970s and 1980s. It re-examines the diverging arguments supported in the so-called Structural Reports of the five leading economic research institutes. The paper concentrates on three questions: - first, which was the theoretical background of the discussion, - second, which were the controversial issues, and - third, which could be the lessons for Japan's economic policy drawn from the reports? The author comes to the conclusion that the strong Deutschmark has positively affected the German economy as it has increased the pressure to adjust. However, while manufacturing industries were flexible enough to reduce their staff quickly, service industries were too inflexible to provide relief for the labour market. In this respect, Germany can hardly be a model for Japan. In realizing economic reforms, it has made only little progress.

Treuhandanstalt and investment acquisitions: How to ensure that contracts are kept?

The process of selling a state-owned company in former centrally planned economies (CPEs) differs greatly from that of buying a private company in western market economies. While a private seller is normally interested in selling his portfolio expensively, a privatizing agency in CPEs has additional goals: she intends to ensure, e.g., that the purchaser continues the company, makes certain investments or maintains a certain number of jobs. Consequently, these concerns are a potential source of conflict. This paper gives an overview of how the German Treuhandanstalt (THA) copes with the problem. It investigates o first what the THA has done in establishing a contractual framework reflecting her social goals and - second how effective this framework has been in realizing them. The results are mixed: the THA has been very successful in putting an investor on the chain. However, she has invested a lot of money. Time must tell whether the results make all these efforts worthwhile.