Pros and Cons of Backing Winners in Innovation Policy

In the economics profession there is a fierce debate whether industrial and innovation policy should be targeted to specific sectors or firms. This paper discusses the welfare effects of such targeted policies in a third-market international trade model under imperfect competition. A theoretical case for picking winners through a preferential innovation policy is discussed, which is shown to hold without evoking retaliation from foreign competitors. However, in practice information uncertainties remain a concern. The question whether in this case ‘backing winners’ is a wise policy option depends on the characteristics of the information asymmetries and on the extent the government is able to design selection procedures in a way to minimize the transaction costs that may be caused from the market participants’ opportunistic behavior.Innovation policy; R&D subsidies, strategic trade policy, asymmetric information, spill-over effects

A cointegration model for search equilibrium wage formation

In flow models of the labor market, wages are determined by negotiations between workers and employers on the surplus value of a realized match. From this perspective, this paper presents an econometric analysis of the influence of labor market flows on wage formation as an alternative to the traditional specification of wage equations in which unemployment represents Phillips-curve or wage-curve effects. The paper estimates a dynamic wage equation for the Netherlands using a cointegration approach. It finds that labor flows, and notably flows from outside the labor market, are important determinants of both short-run and long-run wage setting.wage curve, labor market flows, cointegration model

A rare cause of chronic mesenteric ischemia from fibromuscular dysplasia: a case report

<p>Abstract</p> <p>Introduction</p> <p>Chronic mesenteric ischemia is a condition that is classically associated with significant atherosclerosis of the abdominal arteries, causing postprandial abdominal pain out of proportion to physical examination. The abdominal pain is exacerbated after meals due to the shunting of blood away from the intestines to the stomach, causing relative ischemia. More than 95% of chronic mesenteric ischemia cases are due to atherosclerosis. We report the first known case of chronic mesenteric ischemia from fibromuscular dysplasia. To the best of our knowledge, this is also the first known case in the literature where postprandial abdominal pain was the presenting symptom of fibromuscular dysplasia.</p> <p>Case presentation</p> <p>A 44-year-old Caucasian woman with a history of hypertension and preeclampsia, who had taken oral contraceptive pills for 15 years, presented with an intractable, colicky abdominal pain of two weeks duration. This abdominal pain worsened with oral intake. It was also associated with diarrhea and vomiting. Physical examination revealed stage III hypertension out of proportion to her risk factors and diffuse abdominal pain without peritoneal signs. An abdominal computed tomography scan, completed in the emergency room, revealed nonspecific colitis. Laboratory work revealed leukocytosis with a left shift, an erythrocyte sedimentation rate of 79 and a C-reactive protein level of 100. She was started on intravenous flagyl and intravenous ciprofloxacin. However, all microbial cultures were negative including three cultures for clostridium difficile. Urine analysis revealed nephritic range proteinuria. The laboratory profile was within normal limits for perinuclear-anti-neutrophil cytoplasmic antibody, cytoplasmic-anti-neutrophil cytoplasmic antibody, anti-saccharomyces cerevisiae antibody, antinuclear antibody test, celiac profile, lactate, carbohydrate antigen-125 and thyroid stimulating hormone. A colonoscopy was completed, which revealed diffuse colonic lymphoid reactive hyperplasia. A small bowel series was negative for any inflammation. An indium scan, pan-computed tomography scan and transvaginal ultrasound were also negative. Magnetic resonance angiography of her abdomen revealed proximal superior mesenteric artery stenosis, which was confirmed by computed tomography angiogram findings of severe proximal and distal superior mesenteric artery stenosis, consistent with the appearance of fibromuscular dysplasia on angiography in the absence of vasculitis or atherosclerotic disease. The patient's superior mesenteric artery stenosis was subsequently angioplastied suboptimally and had to be stented with an Angioplus stent. One month after she was admitted, her abdominal pain and tolerance to oral feeds improved tremendously.</p> <p>Conclusion</p> <p>Fibromuscular dysplasia most commonly presents with renal artery stenosis, which rarely causes abdominal pain. This case illustrates how fibromuscular dysplasia can present as a rare cause of chronic mesenteric ischemia, similar to chronic mesenteric ischemia from atherosclerosis.</p

Are entrepreneurs' forecasts of economic indicators biased?

Insight into the investment behaviour of firms is central in understanding economic dynamics. A critical question, however, is whether firms provide sufficiently reliable data to enable them to make plausible forecasts at the meso (regional or sectoral) level. This paper analyses Dutch investment forecasts at different levels of aggregation. The central research question is whether entrepreneurs, individually or as a group, make systematic errors in their investment forecasts. A statistical test reveals that investment forecasts are not biased at the aggregated (regional and sectoral) level. At the micro level, however, there is a significant bias. Hence, using aggregated (regional and sectoral) data to test the lack of bias (unbiasedness) of forecasts may lead to the wrong conclusions. Moreover, aggregated investment forecasts may then be an inappropriate source for policy recommendations, despite their seemingly high reliability. This finding may in principle be valid for many European countries, since data collection on investment is organized in similar ways throughout Europe