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Input–output model Input–output economics has been used to study regional economies within a nation, and as a tool for national and regional economic planning. A main use of input–output analysis is to measure the economic impacts of events as well as public investments or programs as shown by IMPLAN and Regional Input–Output Modeling System. It is also used to identify economically related industry clusters and also so-called "key" or "target" industries (industries that are most likely to enhance the internal coherence of a specified economy). By linking industrial output to satellite accounts articulating energy use, effluent production, space needs, and so on, input–output analysts have extended the approaches application to a wide variety of uses. The input–output model is one of the major conceptual models for a socialist planned economy. This model involves the direct determination of physical quantities to be produced in each industry, which are used to formulate a consistent economic plan of resource allocation. This method of planning is contrasted with price-directed Lange-model socialism and Soviet-style material balance planning. In the economy of the Soviet Union, planning was conducted using the method of material balances up until the country's dissolution. The method of material balances was first developed in the 1930s during the Soviet Union's rapid industrialization drive | https://en.wikipedia.org/wiki?curid=1036651 |
Input–output model Input–output planning was never adopted because the material balance system had become entrenched in the Soviet economy, and input–output planning was shunned for ideological reasons. As a result, the benefits of consistent and detailed planning through input–output analysis were never realized in the Soviet-type economies. The mathematics of input–output economics is straightforward, but the data requirements are enormous because the expenditures and revenues of each branch of economic activity have to be represented. As a result, not all countries collect the required data and data quality varies, even though a set of standards for the data's collection has been set out by the United Nations through its System of National Accounts (SNA): the most recent standard is the 2008 SNA. Because the data collection and preparation process for the input–output accounts is necessarily labor and computer intensive, input–output tables are often published long after the year in which the data were collected—typically as much as 5–7 years after. Moreover, the economic "snapshot" that the benchmark version of the tables provides of the economy's cross-section is typically taken only once every few years, at best. However, many developed countries estimate input–output accounts annually and with much greater recency | https://en.wikipedia.org/wiki?curid=1036651 |
Input–output model This is because while most uses of the input–output analysis focus on the matrix set of inter-industry exchanges, the actual focus of the analysis from the perspective of most national statistical agencies is the benchmarking of gross domestic product. Input–output tables therefore are an instrumental part of national accounts. As suggested above, the core input–output table reports only intermediate goods and services that are exchanged among industries. But an array of row vectors, typically aligned at the bottom of this matrix, record non-industrial inputs by industry like payments for labor; indirect business taxes; dividends, interest, and rents; capital consumption allowances (depreciation); other property-type income (like profits); and purchases from foreign suppliers (imports). At a national level, although excluding the imports, when summed this is called "gross product originating" or "gross domestic product by industry." Another array of column vectors is called "final demand" or "gross product consumed." This displays columns of spending by households, governments, changes in industry stocks, and industries on investment, as well as net exports. (See also Gross domestic product.) In any case, by employing the results of an economic census which asks for the sales, payrolls, and material/equipment/service input of each establishment, statistical agencies back into estimates of industry-level profits and investments using the input–output matrix as a sort of double-accounting framework | https://en.wikipedia.org/wiki?curid=1036651 |
Input–output model Despite the clear ability of the input–output model to depict and analyze the dependence of one industry or sector on another, Leontief and others never managed to introduce the full spectrum of dependency relations in a market economy. In 2003, Mohammad Gani, a pupil of Leontief, introduced consistency analysis in his book "Foundations of Economic Science", which formally looks exactly like the input–output table but explores the dependency relations in terms of payments and intermediation relations. Consistency analysis explores the consistency of plans of buyers and sellers by decomposing the input–output table into four matrices, each for a different kind of means of payment. It integrates micro and macroeconomics into one model and deals with money in a value-free manner. It deals with the flow of funds via the movement of goods. | https://en.wikipedia.org/wiki?curid=1036651 |
Report on Manufactures The Report on the Subject of Manufactures, generally referred to by its shortened title Report on Manufactures, is the third major report, and "magnum opus", of American founding father and first U.S. Treasury Secretary Alexander Hamilton. It was presented to Congress on December 5, 1791. It laid forth economic principles rooted in both the Mercantilist system of Elizabeth I's England and the practices of Jean-Baptiste Colbert of France. The principal ideas of the Report would later be incorporated into the "American System" program by Senator Henry Clay of Kentucky and his Whig Party. Abraham Lincoln, who called himself a "Henry Clay tariff Whig" during his early years, would later make the principles cornerstones, together with opposition to the institution and expansion of slavery, of the fledgling Republican Party. Hamilton's ideas formed the basis for the "American School" of economics. Hamilton reasoned that to secure American independence, the United States needed to have a sound policy of encouraging the growth of manufacturing and ensure its future as a permanent feature of the economic system of the nation. He argued these could be achieved through bounties or subsidies to industry, regulation of trade with moderate tariffs (not intended to discourage imports but to raise revenue to support American manufacturing through subsidy), and other government encouragement | https://en.wikipedia.org/wiki?curid=1038174 |
Report on Manufactures These policies would not only promote the growth of manufacturing but provide diversified employment opportunities and promoted immigration into the young United States. They would also expand the applications of technology and science for all quarters of the economy, including agriculture. Hamilton reasoned that tariffs issued in moderation would raise revenue to fund the nation. The tariff could also be used to encourage domestic (or national) manufacturing and growth of the economy by applying the funds raised in part towards subsidies (called bounties in his time) to manufacturers. Hamilton sought to use the tariff to: Hamilton reasoned that bounties (subsidies) to industry, which would rely on funds raised by moderate tariffs, would be the best means of growing manufacturing without decreasing supply or increasing prices of goods. Such encouragement through direct support would make American enterprise competitive and independent along with the nation as a whole. In part subsidies would be used to: Though Congress refused to accept Hamilton's proposals in 1791, due to opposition from James Madison and his supporters, much of Hamilton's third report would later be adopted by the United States Congress despite continued opposition to the support of industry through subsidy. Both sides agreed that manufacturing independence was desirable and necessary but disagreed on how to obtain it | https://en.wikipedia.org/wiki?curid=1038174 |
Report on Manufactures The Jeffersonian Democratic-Republican Party's main objection to subsidy was their fear that subsidy would lead to corruption and favoritism of certain sections of the new nation over others; namely the north over the agrarian south. This divide (north vs. south) would come up again and again in issues of economic policy until the outbreak of the American Civil War. It is often thought that Hamilton's report was completely ignored, but in fact "Hamilton worked to ensure that Congress enacted virtually every tariff recommendation in the report within five months of its delivery." Hamilton's revenue-based trade policy, with its more moderate tariffs, meant that, by 1794, manufacturers had switched their support from the Federalists to the Republicans. Leading opponents of Alexander Hamilton's economic plan included Thomas Jefferson (until later years) and James Madison, who were opposed to the use of subsidy to industry along with most of their fledgling Democratic-Republican Party. Instead of bounties they reasoned in favor of high tariffs and restrictions on imports to increase manufacturing; which was favored by the manufacturers themselves who desired protection of their home market. Although the Jeffersonian stance originally favored an "agrarian" economy of farmers, this changed over time to encompass many of Hamilton's original ideas, while "the Madison administration helped give rise to the first truly protectionist tariff in U.S. history." | https://en.wikipedia.org/wiki?curid=1038174 |
Homo Oeconomicus is a quarterly peer-reviewed academic journal covering studies in classical and neoclassical economics, public and social choice theory, law and economics, and philosophy of economics. It was established in 1983 as an occasional series concerned with aspects of the "Homo economicus concept". The founding editor-in-chief was Manfred J. Holler (University of Hamburg). The current editors-in-chief are Manfred J. Holler (University of Hamburg), John Hudson (University of Bath), Hartmut Kliemt (Frankfurt School of Finance & Management), and Martin Leroch (University of Mainz). Originally published in German, all articles have been in English since 1998. The mixture of German and English articles deterred some subscribers and subscriptions picked up after the journal stopped accepting German language submissions. | https://en.wikipedia.org/wiki?curid=1042642 |
Eurobond (external bond) A eurobond is an international bond that is denominated in a currency not native to the country where it is issued. Also called external bond; "external bonds which, strictly, are neither eurobonds nor foreign bonds would also include: foreign currency denominated domestic bonds…" It can be categorised according to the currency in which it is issued. London is one of the centers of the eurobond market, with Luxembourg being the primary listing center for these instruments. Eurobonds may be traded throughout the world, with Singapore and Tokyo being particular markets. Eurobonds are named after the currency they are denominated in. For example, Euroyen and Eurodollar bonds are denominated in Japanese yen and American dollars respectively. Eurobonds were originally in bearer bond form, payable to the bearer and were also free of withholding tax. The bank paid the holder of the coupon the interest payment due. Usually, no official records were kept. The word "eurobond" was originally created by Julius Strauss. The first eurobonds were issued in 1963 by Italian motorway network Autostrade, which issued 60,000 bearer bonds at a value of US$250 each for a fifteen-year loan of US$15m, paying an annual coupon of 5.5%. The issue was arranged by London bankers S. G. Warburg. and listed on the Luxembourg Stock Exchange. Allen & Overy, one of London's Magic Circle of law firms, were the lawyers on the transaction | https://en.wikipedia.org/wiki?curid=1043930 |
Eurobond (external bond) Their conception was largely a reaction against the imposition of the Interest Equalization Tax in the United States. The goal of the tax was to reduce the US balance-of-payment deficit by reducing American demand for foreign securities. Americans could bypass the costly tax and Europeans could keep open access to US capital. Like other commonly traded securities, virtually all Eurobonds now trade in dematerialized electronic book-entry form, rather than physical form. The bonds are held and traded within one of the clearing systems (Euroclear and Clearstream being the most common). Coupons are paid electronically via the clearing systems to the holder of the eurobond (or their nominee account). | https://en.wikipedia.org/wiki?curid=1043930 |
Intertemporal consumption Economic theories of intertemporal consumption seek to explain people's preferences in relation to consumption and saving over the course of their lives. The earliest work on the subject was by Irving Fisher and Roy Harrod, who described 'hump saving', hypothesizing that savings would be highest in the middle years of a person's life as they saved for retirement. In the 1950s, more well-defined models built on discounted utility theory and approached the question of inter-temporal consumption as a lifetime income optimization problem. Solving this problem mathematically, assuming that individuals are rational and have access to complete markets, Modigliani & Brumberg (1954), Albert Ando, and Milton Friedman (1957) developed what became known as the life-cycle model. See Intertemporal choice:Modigliani's Life Cycle Income Hypothesis for details. The life-cycle model of consumption suggests that consumption is based on average lifetime income instead of income at any given age. First, young people borrow to consume more than their income, next, as their income rises through the years, their consumption rises slowly and they begin to save more. Lastly, during their retirement these individuals live off of their savings. Furthermore this theory implies that consumption is smoothed out relative to a person's income which is the reason economists set consumption proportional to potential income rather than actual income. Attempts to test the life-cycle model against real world data have met with mixed success | https://en.wikipedia.org/wiki?curid=1045866 |
Intertemporal consumption In a review of the literature, Courant, Gramlich and Laitner (1984) note "but for all its elegance and rationality, the life-cycle model has not tested out very well". The main discrepancies between predicted and actual behaviour is that people drastically 'underconsume' early and late in their lifetime by failing to borrow against future earnings and not saving enough to adequately finance retirement incomes respectively. People also seem to 'overconsume' during their highest earning years, the elderly do not consume from their assets as would be expected (particularly from their household equity) and also treat windfall gains in a manner inconsistent with the life-cycle model. Specific alterations to the theory have been proposed to help it accommodate the data; a bequest motive, capital market imperfections such as liquidity constraints, a changing individual utility function over time or a particular form of expectation as to future income. Behavioural economists have proposed an alternate description of intertemporal consumption, the behavioural life cycle hypothesis. They propose that people mentally divide their assets into non-fungible mental accounts – current income, current assets (savings) and future income. The marginal propensity to consume (MPC) out of each of these accounts is different | https://en.wikipedia.org/wiki?curid=1045866 |
Intertemporal consumption Drawing upon empirical studies of consumption, superannuation and windfall gains they hypothesize that the MPC is close to one out of current income, close to zero for future income and somewhere in between with respect to current assets. These differing MPCs explain why people 'overconsume' during their highest earning years, why increasing superannuation contributions does not cause current savings to be reduced (as the life-cycle model implies) and why small windfall gains (which are coded as current income) are consumed at a high rate but a higher proportion of larger gains is saved. | https://en.wikipedia.org/wiki?curid=1045866 |
Shift work is an employment practice designed to make use of, or provide service across, all 24 hours of the clock each day of the week (often abbreviated as "24/7"). The practice typically sees the day divided into shifts, set periods of time during which different groups of workers perform their duties. The term "shift work" includes both long-term night shifts and work schedules in which employees change or rotate shifts. In medicine and epidemiology, shift work is considered a risk factor for some health problems in some individuals, as disruption to circadian rhythms may increase the probability of developing cardiovascular disease, cognitive impairment, diabetes, and obesity, among other conditions. can also contribute to strain in marital, family, and personal relationships. A marriage where one partner works an irregular shift is six times more likely to end in divorce than a marriage where both partners work days. increases the risk for the development of many disorders. sleep disorder is a circadian rhythm sleep disorder characterized by insomnia, excessive sleepiness, or both. is considered essential for the diagnosis. The risk of diabetes mellitus type 2 is increased in shift workers, especially men. People working rotating shifts are more vulnerable than others. Women whose work involves night shifts have a 48% increased risk of developing breast cancer | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work This may be due to alterations in circadian rhythm: melatonin, a known tumor suppressor, is generally produced at night and late shifts may disrupt its production. The WHO's International Agency for Research on Cancer listed "shift work that involves circadian disruption" as a probable carcinogen. may also increase the risk of other types of cancer. Working rotating shift work regularly during a two-year interval has been associated with a 9% increased the risk of early menopause compared to women who work no rotating shift work. The increased risk among rotating night shift workers was 25% among women predisposed to earlier menopause. Early menopause can lead to a host of other problems later in life. A recent study, found that women who worked rotating night shifts for more than six years, eleven percent experienced a shortened lifespan. Women who worked rotating night shifts for more than 15 years also experienced a 25 percent higher risk of death due to lung cancer. also increases the risk of developing cluster headaches, heart attacks, fatigue, stress, sexual dysfunction, depression, dementia, obesity, metabolic disorders, gastrointestinal disorders, musculoskeletal disorders, and reproductive disorders. also can worsen chronic diseases, including sleep disorders, digestive diseases, heart disease, hypertension, epilepsy, mental disorders, substance abuse, asthma, and any health conditions that are treated with medications affected by the circadian cycle | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work Artificial lighting may additionally contribute to disturbed homeostasis. may also increase a person's risk of smoking. The health consequences of shift work may depend on chronotype, that is, being a day person or a night person, and what shift a worker is assigned to. When individual chronotype is opposite of shift timing (day person working night shift), there is a greater risk of circadian rhythms disruption. Nighttime workers sleep an average of 1-4 hours less than daytime workers. Different shift schedules will have different impacts on the health of a shift worker. The way the shift pattern is designed affects how shift workers sleep, eat and take holidays. Some shift patterns can exacerbate fatigue by limiting rest, increasing stress, overworking staff or disrupting their time off. Muscle health is also compromised by Shift work: Altered sleep and altered eating times. Changes to appetite regulating hormones, more snacking and full center of the brain not working properly, changes in total energy expenditure. Increased snacking, increased binge drinking and reduced protein intake. All these factor can contribute to negative protein balance, increases in insulin resistance and increases in fat. Which can lead to weight gain and more long-term health challenge. Compared with the day shift, injuries and accidents have been estimated to increase by 15% on evening shifts and 28% on night shifts | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work Longer shifts are also associated with more injuries and accidents: 10-hour shifts had 13% more and 12-hour shifts had 28% more than 8-hour shifts. Other studies have shown a link between fatigue and workplace injuries and accidents. Workers with sleep deprivation are far more likely to be injured or involved in an accident. One study suggests that, for those working a night shift (such as 23:00 to 07:00), it may be advantageous to sleep in the evening (14:00 to 22:00) rather than the morning (08:00 to 16:00). The study's evening sleep subjects had 37% fewer episodes of attentional impairment than the morning sleepers. There are four major determinants of cognitive performance and alertness in healthy shift-workers. They are: circadian phase, sleep inertia, acute sleep deprivation and chronic sleep deficit. A cross-sectional study investigated the relationship between several sleep assessment criteria and different shift work schedules (3-day, 6-day, 9-day and 21-day shift) and a control group of day shift work in Korean firefighters. The results found that all shift work groups exhibited significant decreased total sleep time (TST) and decreased sleep efficiency in the night shift but efficiency increased in the rest day. Between-group analysis of the different shift work groups revealed that day shift sleep efficiency was significantly higher in the 6-day shift while night shift sleep efficiency was significantly lower in the 21-day shift in comparison to other shift groups ("p" < 0.05) | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work Overall, night shift sleep quality was worse in shift workers than those who just worked the day shift, whereas 6-day shift provided better sleep quality compared to the 21-day shift. has been shown to negatively affect workers, and has been classified as a specific disorder (shift work sleep disorder). Circadian disruption by working at night causes symptoms like excessive sleepiness at work and sleep disturbances. sleep disorder also creates a greater risk for human error at work. disrupts cognitive ability and flexibility and impairs attention, motivation, decision making, speech, vigilance, and overall performance. In order to mitigate the negative effects of shift work on safety and health, many countries have enacted regulations on shift work. The European Union, in its directive 2003/88/EC, has established a 48-hour limit on working time (including overtime) per week; a minimum rest period of 11 consecutive hours per 24-hour period; and a minimum uninterrupted rest period of 24 hours of mandated rest per week (which is in addition to the 11 hours of daily rest).<ref name="2003/88/EC">Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time.</ref> The EU directive also limits night work involving "special hazards or heavy physical or mental strain" to an average of eight hours in any 24-hour period | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work The EU directive allows for limited derogations from the regulation, and special provisions allow longer working hours for transportation and offshore workers, fishing vessel workers, and doctors in training (see also medical resident work hours). Fatigue due to shift work has contributed to several industrial disasters, including the Three Mile Island accident, the Space Shuttle Challenger disaster and the Chernobyl disaster. The Alaska Oil Spill Commission's final report on the "Exxon Valdez" oil spill disaster found that it was "conceivable" that excessive work hours contributed to crew fatigue, which in turn contributed to the vessel's running aground. The practices and policies put in place by managers of round-the-clock or 24/7 operations can significantly influence shift worker alertness (and hence safety) and performance. Air traffic controllers typically work an 8-hour day, 5 days per week. Research has shown that when controllers remain "in position" for more than two hours, even at low traffic levels, performance can deteriorate rapidly, so they are typically placed "in position" for 30-minute intervals (with 30 minutes between intervals) | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work These practices and policies can include selecting an appropriate shift schedule or rota and using an employee scheduling software to maintain it, setting the length of shifts, managing overtime, increasing lighting levels, providing shift worker lifestyle training, retirement compensation based on salary in the last few years of employment (which can encourage excessive overtime among older workers who may be less able to obtain adequate sleep), or screening and hiring of new shift workers that assesses adaptability to a shift work schedule. Mandating a minimum of 10 hours between shifts is an effective strategy to encourage adequate sleep for workers. Allowing frequent breaks and scheduling 8 or 10-hour shifts instead of 12 hour shifts can also minimize fatigue and help to mitigate the negative health effects of shift work. Multiple factors need to be considered when developing optimal shift work schedules, including shift timing, length, frequency and length of breaks during shifts, shift succession, worker commute time, as well as the mental and physical stress of the job. Even though studies support 12 hour shifts are associated with increased occupational injuries and accident (higher rates with subsequent, successive shifts), a synthesis of evidence cites the importance of all factors when considering the safety of a shift | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work was once characteristic primarily of the manufacturing industry, where it has a clear effect of increasing the use that can be made of capital equipment and allows for up to three times the production compared to just a day shift. It contrasts with the use of overtime to increase production at the margin. Both approaches incur higher wage costs. Although 2nd-shift worker efficiency levels are typically 3–5% below 1st shift, and 3rd shift 4–6% below 2nd shift, the productivity level, i.e. cost per employee, is often 25% to 40% lower on 2nd and 3rd shifts due to fixed costs which are "paid" by the first shift. The 42-hour work-week allows for the most even distribution of work time. A 3:1 ratio of work days to days off is most effective for eight-hour shifts, and a 2:2 ratio of work days to days off is most effective for twelve-hour shifts. Eight-hour shifts and twelve-hour shifts are common in manufacturing and health care. Twelve-hour shifts are also used with a very slow rotation in the petroleum industry. Twenty-four-hour shifts are common in health care and emergency services. The shift plan or rota is the central component of a shift schedule. The schedule includes considerations of shift overlap, shift change times and alignment with the clock, vacation, training, shift differentials, holidays, etc., whereas the shift plan determines the sequence of work and free days within a shift system | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work Rotation of shifts can be fast, in which a worker changes shifts more than once a week, or slow, in which a worker changes shifts less than once a week. Rotation can also be forward, when a subsequent shift starts later, or backward, when a subsequent shift starts earlier. Evidence supports forward rotating shifts are more adaptable for shift workers' circadian physiology. One main concern of shift workers is knowing their schedule more than two weeks at a time. is stressful. When on a rotating or ever changing shift, workers have to worry about daycare, personal appointments, and running their households. Many already work more than an eight-hour shift. Some evidence suggests giving employees schedules more than a month in advance would give proper notice and allow planning, their stress level would be reduced. Though shift work itself remains necessary in many occupations, employers can alleviate some of the negative health consequences of shift work. The United States National Institute for Occupational Safety and Health recommends employers avoid quick shift changes and any rotating shift schedules should rotate forward. Employers should also attempt to minimize the number of consecutive night shifts, long work shifts and overtime work. A poor work environment can exacerbate the strain of shift work. Adequate lighting, clean air, proper heat and air conditioning, and reduced noise can all make shift work more bearable for workers. Good sleep hygiene is recommended | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work This includes blocking out noise and light during sleep, maintaining a regular, predictable sleep routine, avoiding heavy foods and alcohol before sleep, and sleeping in a comfortable, cool environment. Alcohol consumption, caffeine consumption and heavy meals in the few hours before sleep can worsen shift work sleep disorders. Exercise in the three hours before sleep can make it difficult to fall asleep. Free online training programs are available to educate workers and managers about the risks associated with shift work and strategies they can use to prevent these. Algorithmic scheduling of shift work can lead to what has been colloquially termed as "clopening" where the shift-worker has to work the closing shift of one day and the opening shift of the next day back-to-back resulting in short rest periods between shifts and fatigue. Co-opting employees to fill the shift roster helps to ensure that the human costs are taken into account in a way which is hard for an algorithm to do as it would involve knowing the constraints and considerations of each individual shift worker and assigning a cost metric to each of those factors. Shift based hiring which is a recruitment concept that hires people for individual shifts, rather than hiring employees before scheduling them into shifts enables shift workers to indicate their preferences and availabilities for unfilled shifts through a shift-bidding mechanism | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work Through this process, the shift hours are evened out by human-driven market mechanism rather than an algorithmic process. This openness can lead to work hours that are tailored to an individual's lifestyle and schedule while ensuring that shifts are optimally filled, in contrast to the generally poor human outcomes of fatigue, stress, estrangement with friends and family and health problems that have been reported with algorithm-based scheduling of work-shifts. Missing income is also a large part of shift worker. Several companies run twenty-four hour shifts. Most of the work is done during the day. When the work dries up, it usually is the second and third shift workers who pay the price. They are told to punch out early or use paid time off if they have any to make up the difference in their paychecks. That practice costs the average worker $92.00 a month. Melatonin may increase sleep length during both daytime and nighttime sleep in people who work night shifts. Zopiclone has also been investigated as a potential treatment, but it is unclear if it is effective in increasing daytime sleep time in shift workers. There are, however, no reports of adverse effects. Modafinil and R-modafinil are useful to improve alertness and reduce sleepiness in shift workers. Modafinil has a low risk of abuse compared to other similar agents. However, 10% more participants reported adverse effects (nausea and headache) while taking modafinil | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work In post-marketing surveillance, modafinil was associated with Stevens–Johnson syndrome. The European Medicines Agency withdrew the license for modafinil for shift workers for the European market because it judged that the benefits did not outweigh the adverse effects. Using caffeine and naps before night shifts can decrease sleepiness. Caffeine has also been shown to reduce errors made by shift workers. According to data from the National Health Interview Survey and the Occupational Health Supplement, 27% of all U.S. workers in 2015 worked an alternative shift (not a regular day shift) and 7% frequently worked a night shift. Prevalence rates were higher for workers aged 18–29 compared to other ages. Those with an education level beyond high school had a lower prevalence rate of alternative shifts compared to workers with less education. Among all occupations, protective service occupations had the highest prevalence of working an alternative shift (54%). One of the ways in which working alternative shifts can impair health is through decreasing sleep opportunities. Among all workers, those who usually worked the night shift had a much higher prevalence of short sleep duration (44.0%, representing approximately 2.2 million night shift workers) than those who worked the day shift (28.8%, representing approximately 28.3 million day shift workers). An especially high prevalence of short sleep duration was reported by night shift workers in the transportation and warehousing (69 | https://en.wikipedia.org/wiki?curid=1051985 |
Shift work 7%) and health-care and social assistance (52.3%) industries. It is estimated that 15-20% of workers in industrialized countries are employed in shift work. is common in the transportation sector as well. Some of the earliest instances appeared with the railroads, where freight trains have clear tracks to run on at night. is also the norm in fields related to public protection and healthcare, such as law enforcement, emergency medical services, firefighting, security and hospitals. is a contributing factor in many cases of medical errors. has often been common in the armed forces. Military personnel, pilots, and others that regularly change time zones while performing shift work experience jet lag and consequently suffer sleep disorders. Those in the field of meteorology, such as the National Weather Service and private forecasting companies, also use shift work, as constant monitoring of the weather is necessary. Much of the Internet services and telecommunication industry relies on shift work to maintain worldwide operations and uptime. Service industries now increasingly operate on some shift system; for example a restaurant or convenience store will normally be open on most days for much longer than a working day. There are many industries requiring 24/7 coverage that employ workers on a shift basis, including: | https://en.wikipedia.org/wiki?curid=1051985 |
John Gray (philosopher) John Nicholas Gray (born 17 April 1948) is an English political philosopher with interests in analytic philosophy and the history of ideas. He retired in 2008 as School Professor of European Thought at the London School of Economics and Political Science. Gray contributes regularly to "The Guardian", "The Times Literary Supplement" and the "New Statesman", where he is the lead book reviewer. He is an atheist. Gray has written several influential books, including "" (1998), which argues that free market globalization is an unstable Enlightenment project currently in the process of disintegration; "Straw Dogs: Thoughts on Humans and Other Animals" (2003), which attacks philosophical humanism, a worldview which Gray sees as originating in religions; and "" (2007), a critique of utopian thinking in the modern world. Gray sees volition, and hence morality, as an illusion, and portrays humanity as a ravenous species engaged in wiping out other forms of life. Gray has written that "humans ... cannot destroy the Earth, but they can easily wreck the environment that sustains them." Gray was born into a working-class family, with a docker-turned-carpenter father, in South Shields, County Durham. He attended South Shields Grammar-Technical School for Boys from 1959 until 1967, then studied at Exeter College, Oxford, reading Philosophy, Politics and Economics (PPE), completing his B.A., M.Phil. and D.Phil | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) He formerly held posts as lecturer in political theory at the University of Essex, fellow and tutor in politics at Jesus College, Oxford, and lecturer and then professor of politics at the University of Oxford. He has served as a visiting professor at Harvard University (1985–86) and Stranahan Fellow at the Social Philosophy and Policy Center, Bowling Green State University (1990–1994), and has also held visiting professorships at Tulane University’s Murphy Institute (1991) and Yale University (1994). He was Professor of European Thought at the London School of Economics and Political Science until his retirement from academic life in early 2008. Among philosophers, he is known for a thoroughgoing rejection of Rawlsianism and for exploration of the uneasy relationship between value pluralism and liberalism in the work of Isaiah Berlin. Gray's political thought is noted for its mobility across the political spectrum over the years. As a student, Gray was on the left and continued to vote Labour into the mid-1970s. By 1976 he had shifted towards a right-liberal New Right position, on the basis that the world was changing irrevocably through technological inventions, realigned financial markets and new economic power blocs and that the left failed to comprehend the magnitude and nature of this change. In the 1990s Gray became an advocate for environmentalism and New Labour. Gray considers the conventional (left-wing/right-wing) political spectrum of conservatism and social democracy as no longer viable | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) On liberalism, Gray identified the common strands in liberal thought as being "individualist", "egalitarian", "meliorist", and "universalist". The individualist element avers the ethical primacy of the human being against the pressures of social collectivism, the egalitarian element assigns the same moral worth and status to all individuals, the meliorist element asserts that successive generations can improve their sociopolitical arrangements, and the universalist element affirms the moral unity of the human species and marginalises local cultural differences. More recently, he has criticised neoliberalism, the global free market and some of the central currents in Western thinking, such as humanism, while moving towards aspects of green thought, drawing on the Gaia theory of James Lovelock. It is perhaps for this critique of humanism that Gray is best known. Central to the doctrine of humanism, in Gray's view, is the inherently utopian belief in meliorism; that is, that humans are not limited by their biological natures and that advances in ethics and politics are cumulative and that they can alter or improve the human condition, in the same way that advances in science and technology have altered or improved living standards. Gray contends, in opposition to this view, that history is not progressive, but cyclical. Human nature, he argues, is an inherent obstacle to cumulative ethical or political progress | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) Seeming improvements, if there are any, can very easily be reversed: one example he has cited has been the use of torture by the United States against terrorist suspects. "What's interesting," Gray said in an interview in 032c magazine, "is that torture not only came back, but was embraced by liberals, and defended by liberals. Now there are a lot of people, both liberal and conservative, who say, 'Well, it's a very complicated issue.' But it wasn't complicated until recently. They didn't say that five or ten years ago." Furthermore, he argues that this belief in progress, commonly imagined to be secular and liberal, is in fact derived from an erroneous Christian notion of humans as morally autonomous beings categorically different from other animals. This belief, and the corresponding idea that history makes sense, or is progressing towards something, is in Gray's view merely a Christian prejudice. In "Straw Dogs" he argues that the idea that humans are self-determining agents does not pass the acid test of experience. Those Darwinist thinkers who believe humans can take charge of their own destiny to prevent environmental degradation are, in this view, not naturalists, but apostles of humanism. He identifies the Enlightenment as the point at which the Christian doctrine of salvation was taken over by secular idealism and became a political religion with universal emancipation as its aim | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) Communism, fascism and "global democratic capitalism" are characterised by Gray as Enlightenment "projects" which have led to needless suffering, in Gray's view, as a result of their ideological allegiance to this religion. The term agonistic liberalism appears in Gray's 1995 book "Isaiah Berlin". Gray uses this phrase to describe what he believes is Berlin's theory of politics, namely his support for both value pluralism and liberalism. More generally, agonistic liberalism could be used to describe any kind of liberalism that claims its own value commitments do not form a complete vision of politics and society, and that one instead needs to look for what Berlin calls an "uneasy equilibrium" between competing values. In Gray's view, many contemporary liberal theorists would fall into this category, for instance John Rawls and Karl Popper. Agonistic liberalism is an alternative to Berlin's theory of value pluralism and liberalism. While Berlin claimed equal validity for conflicting liberal views, agonistic liberalism holds that over time solutions may be found that determine which values are correct. Agonistic liberalism is the theory that conflict rather than discussion is the basis of social change. Gray's work has been praised by, amongst others, the novelists J. G. Ballard, Will Self and John Banville, the theologian Don Cupitt, the journalist Bryan Appleyard, the political scientist David Runciman, the venturer George Soros, the environmental scientist James Lovelock and the author Nassim Nicholas Taleb | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) Friedrich Hayek described Gray's 1984 book "Hayek on Liberty" as "The first survey of my work which not only fully understands but is able to carry on my ideas beyond the point at which I left off." Gray has discussed James Lovelock's new ideas on evolution's next step: a species beyond humanity that will be better able to co-exist with other species on this planet in the distant future. His 1998 book "" was praised by George Soros as "a powerful analysis of the deepening instability of global capitalism" which "should be read by all who are concerned about the future of the global economy". John Banville praised "", saying that "Gray's assault on Enlightenment ideas of progress is timelier than ever". His 2002 book "Straw Dogs: Thoughts on Humans and Other Animals" has received particular praise. J. G. Ballard wrote that the book "challenges most of our assumptions about what it means to be human, and convincingly shows that most of them are delusions" and described it "a powerful and brilliant book", "an essential guide to the new millennium" and "the most exhilarating book I have read since Richard Dawkins's "The Selfish Gene"." Will Self called the book "a contemporary work of philosophy devoid of jargon, wholly accessible, and profoundly relevant to the rapidly evolving world we live in" and wrote "I read it once, I read it twice and took notes. I arranged to meet its author so I could publicise the book – I thought it that good." In 2002 "Straw Dogs" was named a book of the year by J. G | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) Ballard in "The Daily Telegraph"; by George Walden in "The Sunday Telegraph"; by Will Self, Joan Bakewell, Jason Cowley and David Marquand in the "New Statesman"; by Andrew Marr in "The Observer"; by Jim Crace in "The Times"; by Hugh Lawson Tancred in "The Spectator"; by Richard Holloway in the "Glasgow Herald"; and by Sue Cook in "The Sunday Express". Nassim Nicholas Taleb has written that John Gray is the modern thinker for whom he has the most respect, calling him "prophetic". Gray's "Straw Dogs" has been criticised by Terry Eagleton, who has written: "mixing nihilism and New Ageism in equal measure, Gray scoffs at the notion of progress for 150 pages before conceding that there is something to be said for anaesthetics. The enemy in his sights is not so much a straw dog as a straw man: the kind of starry-eyed rationalist who passed away with John Stuart Mill, but who he has to pretend still rules the world". The academic and author Danny Postel of the University of Denver also took issue with "Straw Dogs". Postel stated that Gray's claim that environmental destruction was the result of humanity's flawed nature would be "welcome news to the captains of industry and the architects of the global economy; the ecological devastation they leave in their wake, according to Gray, has nothing to do with their exploits | https://en.wikipedia.org/wiki?curid=1053576 |
John Gray (philosopher) " Postel also claimed that too much of "Straw Dogs" rested on "blanket assertion", and criticised Gray's use of the term "plague of people" as an outdated "neo-Malthusian persiflage about overpopulation". Postel strongly condemned Gray for outlining "complete political passivity. There is no point whatsoever in our attempting to make the world a less cruel or more livable place." John Gray has made several broadcasts for BBC Radio 4's programme "A Point of View". In August and September 2011, he made six broadcasts: He presented a second sequence from November 2014, sharing his "Point of View" on: Other programmes include: Asteroid 91199 Johngray, discovered by astronomer Eric Walter Elst at ESO's La Silla Observatory in 1998, was named in his honor. The official was published by the Minor Planet Center on 18 June 2008 (). | https://en.wikipedia.org/wiki?curid=1053576 |
Roughneck is a term for a person whose occupation is hard manual labor. The term applies across a number of industries, but is most commonly associated with the workers on a drilling rig. The ideal of the hard-working, tough roughneck has been adopted by several sports teams who use the phrase as part of their name or logo. Originally the term was used in the traveling carnivals of 19th-century United States, almost interchangeably with roustabout. By the 1930s the terms had transferred to the oil drilling industry. In the United Kingdom's oil industry starting in the 1970s, roughneck specifically meant those who worked on the drill floor of a drilling rig handling specialised drilling equipment for drilling and pressure controls. In practice, these workers ranged from unskilled to highly skilled, depending subjectively on the individual worker's aptitude and experience. By contrast, a roustabout would perform general labor, such as loading and unloading cargo from crane baskets and assisting welders, mechanics, electricians and other skilled workers. The word roughneck was in use in the U.S. oil drilling industry even earlier and had a similar meaning. In oil fields, a roughneck's duties can include anything involved with connecting pipe down the well bore, as well as general work around a rig. The crew of a land-based oil rig can be further divided into several positions: In Canada on land-based rigs, the term "roughneck" refers to the floorhand | https://en.wikipedia.org/wiki?curid=1060644 |
Roughneck The Edmonton Oilers of the National Hockey League used to use an oil rigging roughneck with an ice hockey stick as one of their secondary logos. The roughneck, as a symbol of hard work and fortitude, was the inspiration for the Calgary Roughnecks lacrosse team, as well as the Tulsa Roughnecks of the North American Soccer League, the Tulsa Roughnecks of the United Soccer Leagues, and the Tulsa Roughnecks FC of the USL. The West Texas Roughnecks of the Indoor Football League also use this nickname. In the BAFA National Leagues, the Aberdeen Roughnecks have also adopted the nickname. In the AUDL (American Ultimate Disc League) the Dallas team is also the Roughnecks. One of the inaugural teams of the revamped XFL is the Houston Roughnecks Rubbermaid has used the name "Roughneck" for trash containers and storage totes since the mid-1970s. In Chapter 3 of "The Great Gatsby", on first meeting Jay Gatsby, Nick Carraway describes him as looking like "an elegant young rough-neck, a year or two over thirty, whose elaborate formality of speech just missed being absurd." Johnny Cash wrote and performed a song called "Born to Be a Roughneck". Several television programs have focused on the roughneck life, including "Oil Strike North" (1975), "Roughnecks" (1994–1995), and "Black Gold" (2008–2013). Stan Rogers's song "Free in the Harbour", about the migration of Atlantic fisherman to the oil industry for work, describes these migrants as "Calgary Roughnecks from Hermitage Bay." | https://en.wikipedia.org/wiki?curid=1060644 |
Brazilian cruzado The cruzado was the currency of Brazil from 1986 to 1989. It replaced the second cruzeiro (at first called the "cruzeiro novo") in 1986, at a rate of 1 cruzado = 1000 cruzeiros (novos) and was replaced in 1989 by the cruzado novo at a rate of 1000 cruzados = 1 cruzado novo. This currency was subdivided in 100 centavos and it had the symbol formula_1 and the ISO 4217 code "BRC". Stainless-steel coins were introduced in 1986 in denominations of 1, 5, 10, 20 and 50 centavos, and 1 and 5 cruzados, with 10 cruzados following in 1987. Coin production ceased in 1988. 100 cruzado coins commemorating the centenary of the abolition of slavery (the Lei Áurea) were produced in 1988. Although rare in circulation, the designs were carried over into the series issued between 1989 and 1991. The first banknotes were overprints on cruzeiro notes, in denominations of 10, 50 and 100 cruzados. Regular notes followed in denominations of 10, 50, 100 and 500 cruzados, followed by 1000 cruzados in 1987, 5000 and 10,000 cruzados in 1988. | https://en.wikipedia.org/wiki?curid=1062283 |
Tax wedge The tax wedge is the deviation from the equilibrium price/quantity (formula_1 and formula_2, respectively) as a result of the taxation of a good. Because of the tax, consumers pay more for the good (formula_3) than they did before the tax, and suppliers receive less for the good (formula_4) than they did before the tax . Put differently, the tax wedge is the difference between what consumers pay and what producers receive (net of tax) from a transaction. The tax effectively drives a "wedge" between the price consumers pay and the price producers receive for a product. Following from the Law of Supply and Demand, as the price to consumers increases, and the price received by suppliers decreases, the quantity that each wishes to trade will decrease. After a tax is introduced, a new equilibrium is reached, where consumers pay more formula_5, suppliers receive less formula_6, and the quantity exchanged falls formula_7. The difference between formula_3 and formula_4 will be equivalent to the size of the per-unit tax. The filled-in "wedge" created by a tax actually represents the amount of deadweight loss created by the tax. Deadweight loss is the reduction in social efficiency (producer and consumer surplus) from preventing trades for which benefits exceed costs. Deadweight loss occurs with a tax because a higher price for consumers, and a lower price received by suppliers, reduces the quantity of the good sold | https://en.wikipedia.org/wiki?curid=1632834 |
Tax wedge Thus, the equilibrium quantity of a taxed good is lower than the equilibrium quantity when the same good is not taxed. The deadweight loss created by the tax is equal to formula_10, represented by the shaded triangle in the figure. There are two types of tax incidence or tax burden created by a tax: the statutory incidence of a tax and the economic incidence of a tax. Typically, a general reference to "tax incidence" refers to the economic incidence of a tax. The statutory incidence of a tax falls on the party, producers or consumers, that has to physically send a check to the government in the amount of a tax. For example, if a person directly pays his or her income tax to the government (with no employer withholding), the statutory burden would fall on consumers. If a tax is imposed on the producers of gasoline, however, the statutory burden would fall on producers. The economic incidence of a tax falls on the party that bears the actual cost of the tax. Put another way, economic incidence reflects the actual change in an individual's or firm's resources due to the tax. The statutory incidence of the tax is irrelevant to the economic incidence of the tax. In fact, the economic incidence is completely determined by the elasticity of supply and demand. Typically, both producers and consumers bear some portion of the economic incidence of the tax, but these portions do not have to be equal. The party with the more inelastic (steeper) curve bears more of the tax | https://en.wikipedia.org/wiki?curid=1632834 |
Tax wedge For example, consumers of tobacco products typically bear more of the tax on tobacco, because they are addicted to the product and their consumption is not strongly affected by price changes (demand is inelastic). Producers bear more of the tax when supply is inelastic; for example, producers of beachfront hotels would bear more of a tax on hotels and accept lower prices for their product, because a change in price would not have a large effect on the quantity of beachfront hotels. These examples are illustrated graphically (right). The economic incidence on consumers is equal to formula_11, and the incidence on producers is equal to formula_12. Full shifting of a tax occurs when one party in a transaction bears all of the tax burden. When demand is perfectly inelastic, the tax burden is fully shifted onto consumers; when supply is perfectly inelastic, the tax burden is fully shifted onto producers. In the long run, however, supply and demand both become more elastic: consumers' preferences for a product can change (cigarette smokers can quit smoking), and suppliers can choose to reduce their investment in, or leave, the market (a hotel chain can decide to sell its beachfront properties). This means that the economic incidence on consumers and producers can change in the long run. | https://en.wikipedia.org/wiki?curid=1632834 |
Progressive discipline is a system of discipline where the penalties increase upon repeat occurrences. This term is often used in an employment or human resources context where rather than terminating employees for first or minor infractions, there is a system of escalating responses intended to correct the negative behavior rather than to punish the employee. In an employment context, the concept of just cause is usually at the root of progressive discipline practices. Just cause is a principle in collective bargaining contracts that forces employers to prove their grievances against employees. evolved out of labor disputes and collective bargaining practices. Prior to the widespread implementation of 'Just Cause' clauses in union contracts, it was not uncommon to see onerous hidden requirements of employment for workers. Among the most famous is Ford's insistence on investigating the personal lives of his employees and issuing terminations for those whose personal life he deemed unseemly. The typical stages of progressive discipline in a workplace are: The stage chosen for a particular infraction will depend on a variety of factors that include the severity of the infraction, the previous work history of the employee and how the choice will affect others in the organization. Also inherent in progressive discipline is regression to previous stages once enough time passes. | https://en.wikipedia.org/wiki?curid=1637972 |
Triangular arbitrage (also referred to as cross currency arbitrage or three-point arbitrage) is the act of exploiting an arbitrage opportunity resulting from a pricing discrepancy among three different currencies in the foreign exchange market. A triangular arbitrage strategy involves three trades, exchanging the initial currency for a second, the second currency for a third, and the third currency for the initial. During the second trade, the arbitrageur locks in a zero-risk profit from the discrepancy that exists when the market cross exchange rate is not aligned with the implicit cross exchange rate. A profitable trade is only possible if there exist market imperfections. Profitable triangular arbitrage is very rarely possible because when such opportunities arise, traders execute trades that take advantage of the imperfections and prices adjust up or down until the opportunity disappears. opportunities may only exist when a bank's quoted exchange rate is not equal to the market's implicit cross exchange rate. The following equation represents the calculation of an implicit cross exchange rate, the exchange rate one would expect in the market as implied from the ratio of two currencies other than the base currency. where If the market cross exchange rate quoted by a bank is equal to the implicit cross exchange rate as implied from the exchange rates of other currencies, then a no-arbitrage condition is sustained | https://en.wikipedia.org/wiki?curid=1643024 |
Triangular arbitrage However, if an inequality exists between the market cross exchange rate, formula_2, and the implicit cross exchange rate, formula_6, then there exists an opportunity for arbitrage profits on the difference between the two exchange rates. Some international banks serve as market makers between currencies by narrowing their bid-ask spread more than the bid-ask spread of the implicit cross exchange rate. However, the bid and ask prices of the implicit cross exchange rate naturally discipline market makers. When banks' quoted exchange rates move out of alignment with cross exchange rates, any banks or traders who detect the discrepancy have an opportunity to earn arbitrage profits via a triangular arbitrage strategy. To execute a triangular arbitrage trading strategy, a bank would calculate cross exchange rates and compare them with exchange rates quoted by other banks to identify a pricing discrepancy. For example, Citibank detects that Deutsche Bank is quoting dollars at a bid price of 0.8171 €/$, and that Barclays is quoting pounds at a bid price of 1.4650 $/£ (Deutsche Bank and Barclays are in other words willing to buy those currencies at those prices). Citibank itself is quoting the same prices for these two exchange rates. A trader at Citibank then sees that Crédit Agricole is quoting pounds at an ask price of 1.1910 €/£ (in other words it is willing to sell pounds at that price). While the quoted market cross exchange rate is 1.1910 €/£, Citibank's trader realizes that the implicit cross exchange rate is 1 | https://en.wikipedia.org/wiki?curid=1643024 |
Triangular arbitrage 1971 €/£ (by calculating 1.4650 × 0.8171 = 1.1971), meaning that Crédit Agricole has narrowed its bid-ask spread to serve as a market maker between the euro and the pound. Although the market suggests the implicit cross exchange rate should be 1.1971 euros per pound, Crédit Agricole is selling pounds at a lower price of 1.1910 euros. Citibank's trader can hastily exercise triangular arbitrage by exchanging dollars for euros with Deutsche Bank, then exchanging euros for pounds with Crédit Agricole, and finally exchanging pounds for dollars with Barclays. The following steps illustrate the triangular arbitrage transaction. The reason for dividing the euro amount by the euro/pound exchange rate in this example is that the exchange rate is quoted in euro terms, as is the amount being traded. One could multiply the euro amount by the reciprocal pound/euro exchange rate and still calculate the ending amount of pounds. Research examining high-frequency exchange rate data has found that mispricings do occur in the foreign exchange market such that executable triangular arbitrage opportunities appear possible. In observations of triangular arbitrage, the constituent exchange rates have exhibited strong correlation. A study examining exchange rate data provided by HSBC Bank for the Japanese yen (JPY) and the Swiss franc (CHF) found that although a limited number of arbitrage opportunities appeared to exist for as many as 100 seconds, 95% of them lasted for 5 seconds or less, and 60% lasted for 1 second or less | https://en.wikipedia.org/wiki?curid=1643024 |
Triangular arbitrage Further, most arbitrage opportunities were found to have small magnitudes, with 94% of JPY and CHF opportunities existing at a difference of 1 basis point, which translates into a potential arbitrage profit of $100 USD per $1 million USD transacted. Tests for seasonality in the amount and duration of triangular arbitrage opportunities have shown that incidence of arbitrage opportunities and mean duration is consistent from day to day. However, significant variations have been identified during different times of day. Transactions involving the JPY and CHF have demonstrated a smaller number of opportunities and long average duration around 01:00 and 10:00 UTC, contrasted with a greater number of opportunities and short average duration around 13:00 and 16:00 UTC. Such variations in incidence and duration of arbitrage opportunities can be explained by variations in market liquidity during the trading day. For example, the foreign exchange market is found to be most liquid for Asia around 00:00 and 10:00 UTC, for Europe around 07:00 and 17:00 UTC, and for America around 13:00 and 23:00 UTC. The overall foreign exchange market is most liquid around 08:00 and 16:00 UTC, and the least liquid around 22:00 and 01:00 UTC. The periods of highest liquidity correspond with the periods of greatest incidence of opportunities for triangular arbitrage | https://en.wikipedia.org/wiki?curid=1643024 |
Triangular arbitrage This correspondence is substantiated by the observation of narrower bid-ask spreads during periods of high liquidity, resulting in a greater potential for mispricings and therefore arbitrage opportunities. However, market forces are driven to correct for mispricings due to a high frequency of trades that will trade away fleeting arbitrage opportunities. Researchers have shown a decrease in the incidence of triangular arbitrage opportunities from 2003 to 2005 for the Japanese yen and Swiss franc and have attributed the decrease to broader adoption of electronic trading platforms and trading algorithms during the same period. Such electronic systems have enabled traders to trade and react rapidly to price changes. The speed gained from these technologies improved trading efficiency and the correction of mispricings, allowing for less incidence of triangular arbitrage opportunities. Mere existence of triangular arbitrage opportunities does not necessarily imply that a trading strategy seeking to exploit currency mispricings is consistently profitable. Electronic trading systems allow the three constituent trades in a triangular arbitrage transaction to be submitted very rapidly. However, there exists a delay between the identification of such an opportunity, the initiation of trades, and the arrival of trades to the party quoting the mispricing. Even though such delays are only milliseconds in duration, they are deemed significant | https://en.wikipedia.org/wiki?curid=1643024 |
Triangular arbitrage For example, if a trader places each trade as a limit order to be filled only at the arbitrage price and a price moves due to market activity or new price is quoted by the third party, then the triangular transaction will not be completed. In such a case, the arbitrageur will face a cost to close out the position that is equal to the change in price that eliminated the arbitrage condition. In the foreign exchange market there are many market participants competing for each arbitrage opportunity; for arbitrage to be profitable a trader would need to identify and execute each arbitrage opportunity faster than competitors. Competing arbitrageurs are expected to persist in striving to increase their execution speed of trades by engaging in what some researchers describe as an "electronic trading 'arms race'." The costs involved in keeping ahead in such a competition present difficulty in consistently beating other arbitrageurs over the long term. Other factors such as transaction costs, brokerage fees, network access fees, and sophisticated electronic trading platforms further challenge the feasibility of significant arbitrage profits over prolonged periods. | https://en.wikipedia.org/wiki?curid=1643024 |
Local multiplier effect The local multiplier effect (sometimes called the local premium) is the additional economic benefit accrued to an area from money being spent in the local economy. The concept has been taken up by advocates for "spend local" campaigns in addition to more formal treatments in the area of regional economic development. One perspective of the local multiplier effect focuses on the greater local economic return generated by money spent at locally-owned independent businesses compared to corporate chains or other absentee-owned businesses. Localisation advocates cite the multiplier effect as one reason, of many, for consumers to do more of their business locally. Two U.S.-based entities have published studies measuring the local multiplier. Civic Economics, a for-profit economic consultancy, has undertaken studies in Austin, TX, San Francisco, CA; Chicago, IL and Western Michigan. The Institute for Local Self-Reliance, a non-profit organization, executed a study looking at much smaller communities in the Central Coast of Maine. In the field of regional economic development, local multiplier effect refers to the spillover effect the presence of a particular type of job has on additional local economic activity. Current scholarly debate around local multipliers center around the magnitude of the effect from different industries and sectors on local employment | https://en.wikipedia.org/wiki?curid=1644518 |
Local multiplier effect This section will lay out the current theory as to how local multipliers operate in the local economy, its policy implications, and highlight current research into the magnitude of the effect. In discussing local multipliers, regional economists focus on differences in job creation in the tradable and non-tradable sectors of the economy. Whenever a new job is created, there is a chance that additional jobs may also be created via increased demand for local goods and services. Some economists argue that jobs in the tradable sector have a much higher local multiplier effect. This is due to the tradable sector market existing beyond the borders of a local region. This larger market allows the tradable sector to generate more revenue, have higher salaries, and increase in size independent of the local economic climate. The size of the multiplier effect on the non-tradable sector is determined by the interplay of three factors: consumer preference for non-tradables, the types of jobs created, and the elasticity of local labor and housing supply. Consumer preference refers to certain non-tradable goods and services requiring more workers to provide them than others. If the tradable industry has high demand for a type of non-tradable good that needs more workers to be produced then the multiplier will be higher. Types of jobs created refers to the fact that certain job categories generally have higher pay than others. Higher pay results in larger amounts of disposable income that can be spent on the local economy | https://en.wikipedia.org/wiki?curid=1644518 |
Local multiplier effect This results in a higher multiplier. Elasticity of local labor and housing supply refers to that the fact whenever there is an influx of new people with higher than average wages to an area, average prices will rise. This can in turn push out some residents with below average wages into lower cost areas. This results in a lower multiplier. Economists also argue that certain industries have stronger agglomeration economies than other industries, which can magnify the strength of the multiplier effect. Further, the magnitude is affected by local regional and political factors such as the unemployment levels and level of government intervention in the economy and labor market. Arguments for policy mechanisms to attract certain industries to a particular region often are based on analysis of local multiplier effects as justification for the associated costs of the policy. The perceived strength (or weakness) of a particular industry's local multiplier effect thereby affects what industries are most often targeted by policy makers. Other proponents disagree with the logic behind trying to attract whole industries to new areas. They cite the difficulty in attracting established industries with high local multipliers (such as the technology industry). Such industries are not easily engineered by government intervention as their current locations are often due to random coincidences during their founding periods | https://en.wikipedia.org/wiki?curid=1644518 |
Local multiplier effect An alternative solution proposed by Enrico Moretti is for the government to subsidize relocation costs for workers currently in areas with high unemployment to areas with industries that provide high local multipliers. Several scholars have found strong evidence for the presence of the local multiplier effect. Within tradable industries, Enrico Moretti discovered that, for each additional skilled job created, 2.5 jobs were also generated in the local non-tradable goods and services sectors, and an additional unskilled job created 1 job in the local non-tradable sector. Highly skilled sectors such as technology have the highest multiplier effect with five non-tradable jobs for each technology job. Moretti cites the example of Apple Computers which directly employs only 13,000 workers but generates 60,000 additional service jobs in the area. Of those 60,000, 36,000 are unskilled, such as restaurant or retail workers, while 24,000 are skilled jobs such as doctors or lawyers. Other academics have taken issue with the large magnitude of the local multiplier effect claimed by Moretti. One study reanalyzes the claim of Enrico Moretti that five non-tradable jobs are created for each highly skilled tradable job. Using a modified version of Moretti's method it found that the true multiplier effect was only 1.02 non-tradable jobs created. Furthermore the study finds that there is no difference on the local multiplier effect between whether the tradable job is skilled or unskilled | https://en.wikipedia.org/wiki?curid=1644518 |
Local multiplier effect A comparison study of local multiplier effects in Sweden revealed similar multiplier effects as those found in the United States. The study found that while sizable effects did occur, on average, they were smaller than the effects found in the United States. For Sweden, adding a high-skilled job to the traded sector resulted in the creation of 3 additional jobs in the non-traded sector, as opposed to the 5 additional jobs created in the United States. The authors argue the difference is due to the difference in local factors. For example, Sweden's relatively smaller wage difference between skilled and unskilled workers negatively impacts the overall multiplier effect. Another study conducted in Italy using the same methodology as Morretti concluded that, in Italy, there was no evidence of a local multiplier effect from the creation of tradable jobs on the rest of the local economy. The study found the local multiplier effect to be zero and occasionally negative in all regions of Italy. In explaining this discrepancy, the authors points to excessive government regulation in the non-tradable sector, the government's role in wage setting, and barriers to labor mobility. | https://en.wikipedia.org/wiki?curid=1644518 |
Stock keeping unit In the field of inventory management, a stock keeping unit (SKU ) is a distinct type of item for sale, such as a product or service, and all attributes associated with the item type that distinguish it from other item types. For a product, these attributes could include manufacturer, description, material, size, color, packaging, and warranty terms. When a business takes inventory of its stock, it counts the quantity it has of each SKU. SKU can also refer to a unique identifier or code that refers to the particular stock keeping unit. These codes are not regulated or standardized. When a company receives items from a vendor, it has a choice of maintaining the vendor's SKU or creating its own. This makes them distinct from Global Trade Item Number (GTIN), which are standard, global, tracking units. Universal Product Code (UPC), International Article Number (EAN), and Australian Product Number (APN) are special cases of GTINs. A good example of SKUs can be Sachets or Small Packs. These packs are brands of the company in a microform, that is, lesser amount at a reduced price. Mostly, microforms of the bigger sized packs presented by the companies these packs primarily provide the convenience of storage and handling and also offers the benefits of one time usage. Small sachets of chocolates, biscuits, soaps, oils, creams, shampoos, jams, ketchup, medicines, pickles and many more products are readily available in the market and are most convenient to carry, mostly during traveling. | https://en.wikipedia.org/wiki?curid=1644704 |
Canned response Canned responses are predetermined responses to common questions. In fields such as technical support, canned responses to frequently asked questions may be an effective solution for both the customer and the technical adviser, as they offer the possibility to provide a quick answer to common inquiries while requiring little human intervention. Improperly used, canned responses can prove frustrating to users by providing inadequate answers. In text-based technical support systems, the operator may insert a canned response triggered by keystrokes or from a drop-down menu, rather than typing the same answer repeatedly or pasting from some other resource. For example, if a support representative at an ISP's technical support team is asked to explain how to add an attachment to an email, rather than typing in all the details, the support representative may choose the response from a drop down menu, and it gets inserted into the response. The representative is more productive this way, and the user receives a more carefully crafted answer. Some programs have built-in functions which allow canned responses, and other software is available which can insert canned responses into any other application. Canned responses, however, can have disadvantages. Sloppy or pressured support people could end up using canned responses as a quick fix when they actually do not really resolve the customer's problem or are only tangentially relevant to the user's problem | https://en.wikipedia.org/wiki?curid=1647998 |
Canned response Chatbots can be used to provide users with a fully automated access to a broad set of canned responses. Chatbots can vary in sophistical, from rule-based programs offering the same answer to every user to programs using technologies such as artificial intelligence to adapt answers to the particular situation of the user. Since 2008, the term has also referred to quick answers that email clients provide to their users to reply to common messages they may receive. Gmail introduced the feature in 2011 as part of Gmail Labs. In 2015, the company rolled out Smart Reply, a feature that scans and recognizes the types of messages that need responses and uses machine learning to provide the user with personalised canned responses. A Chrome extension for canned responses | https://en.wikipedia.org/wiki?curid=1647998 |
No-arbitrage bounds In financial mathematics, no-arbitrage bounds are mathematical relationships specifying limits on financial portfolio prices. These price bounds are a specific example of good-deal bounds, and are in fact the greatest extremes for good-deal bounds. The most frequent nontrivial example of no-arbitrage bounds is put-call parity for option prices. In incomplete markets, the bounds are given by the subhedging and superhedging prices. The essence of no-arbitrage in mathematical finance is excluding the possibility of "making money out of nothing" in the financial market. This is necessary because the existence of arbitrage is not only unrealistic, but also contradicts the possibility of an economic equilibrium. All mathematical models of financial markets have to satisfy a no-arbitrage condition to be realistic models. | https://en.wikipedia.org/wiki?curid=1648293 |
Trigger strategy In game theory, a trigger strategy is any of a class of strategies employed in a repeated non-cooperative game. A player using a trigger strategy initially cooperates but punishes the opponent if a certain level of defection (i.e., the trigger) is observed. The level of "punishment" and the sensitivity of the trigger vary with different trigger strategies. | https://en.wikipedia.org/wiki?curid=1650025 |
Remuneration is the pay or other financial compensation provided in exchange for an employee's "services performed" (not to be confused with giving (away), or donating, or the act of providing to). A number of complementary benefits in addition to pay are increasingly popular remuneration mechanisms. is one component of reward management. can include: For wage withholding purposes under U.S. income tax law, the term "wage" means remuneration (with certain exceptions) for services performed by an employee for an employer. Under the faithless servant doctrine, a doctrine under the laws of a number of states in the United States, and most notably New York State law, an employee who acts unfaithfully towards his or her employer must forfeit all remuneration received during the period of disloyalty. The word "remuneration" is occasionally misspelled as "renumeration", which means counting or re-counting. | https://en.wikipedia.org/wiki?curid=1650660 |
Plantation economy A plantation economy is an economy based on agricultural mass production, usually of a few commodity crops grown on large farms called plantations. Plantation economies rely on the export of cash crops as a source of income. Prominent crops included cotton, rubber, sugar cane, tobacco, figs, rice, kapok, sisal, and species in the genus "Indigofera", used to produce indigo dye. The longer a crop's harvest period, the more efficient plantations become. Economies of scale are also achieved when the distance to market is long. Plantation crops usually need processing immediately after harvesting. Sugarcane, tea, sisal, and palm oil are most suited to plantations, while coconuts, rubber, and cotton are suitable to a lesser extent. Plantation economies are factory-like, industrialised and centralised forms of agriculture, owned by large corporations or affluent owners. Under normal circumstances, plantation economies are not as efficient as small farm holdings, since there is immense difficulty in proper supervision of labour over a large land area. However, when there are large distances between the plantations and their markets, processing to reduce the bulk of the crop greatly lowers shipping costs. Hence, large plantations which produce large quantities of the good are able to achieve economies of scale from these expensive processing machinery, as the per unit cost of processing is greatly diminished | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy This economy of scale can be achieved best with tropical crops that are harvested continuously through the year, fully utilising the processing machinery. Examples of crops that are suitable to be processed are sugar, sisal, palm oil, and tea. In the Thirteen Colonies, plantations were concentrated in the South. These colonies included Maryland, Virginia, North Carolina, South Carolina, and Georgia. They had good soil and almost year-round growing seasons, ideal for crops such as rice and tobacco. The existence of many waterways in the region made transportation easier. Each colony specialized in one or two crops, with Virginia standing out in tobacco production Planters embraced the use of slaves mainly because indentured labor became expensive. Some indentured servants were also leaving to start their own farms as land was widely available. Colonists tried to use Native Americans for labor, but they were susceptible to European diseases and died in large numbers. The plantation owners then turned to enslaved Africans for labor. In 1665, there were fewer than 500 Africans in Virginia but by 1750, 85 percent of the 235,000 slaves lived in the Southern colonies, Virginia included. Africans made up 40 percent of the South’s population. According to the 1840 United States Census, one out of every four families in Virginia owned slaves. There were over 100 plantation owners who owned over 100 slaves. The number of slaves in the 15 States was just shy of 4 million in a total population 12 | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy 4 million and the percentage was 32% of the population. Fewer than one-third of Southern families owned slaves at the peak of slavery prior to the Civil War. In Mississippi and South Carolina the figure approached one half. The total number of slave owners was 385,000 (including, in Louisiana, some free African Americans), amounting to approximately 3.8% of the Southern and Border states population. On a plantation with more than 100 slaves, the capital value of the slaves was greater than the capital value of the land and farming implements. The first plantations occurred in the Caribbean islands, particularly, in the West Indies on the island of Hispaniola, where it was initiated by the Spaniards in the early 16th century. The plantation system was based on slave labor and it was marked by inhumane methods of exploitation. After being established in the Caribbean islands, the plantation system spread during the 16th,17th and 18th century to Mexico, Brazil, Britain’s southern Atlantic colonies in North America and Indonesia. All the plantation system had a form of slavery in its establishment, slaves were initially forced to be labors to the plantation system, these slaves were primarily native Indians, but the system was later extended to include slaves shipped from Africa. Indeed, the progress of the plantation system was accompanied by the rapid growth of the slave trade | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy The plantation system peaked in the first half of the 18th century, but later on, during the middle of 19th century, there was a significant increase in demand for cotton from European countries, which means there was a need for expanding the plantation in the southern parts of United States. This made the plantation system reach a profound crisis, until it was changed from being forcing slave labour to being mainly low-paid wage labors who contained a smaller proportion of forced labour. In the late 19th century, the plantation system started to be owned by monopoly capital investments, were the foreign monopolies was placed in Asia, Latin America and later in Africa. The monopolies were insured high profits from the sale of plantation products by having cheap labours, forced recruitment, peonage and debt servitude. Enslaved Africans were brought from Africa by the English and other European powers, for their Western Hemisphere colonies. They were shipped from ports in West Africa to the New World. The journey from Africa across the Atlantic Ocean was called "the middle passage", and was one of the three legs which comprised the [trade] among the continents of Europe, the Americas, and Africa. By some estimates, it is said that some ten million Africans were brought to the Americas. Only about 6% ended up in the North American colonies, while the majority were taken to the Caribbean colonies and South America. A reason many did not make it to the colonies at all was disease and illness | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy Underneath the slave ship's decks, Africans were held chest-to-chest and could not do much moving. There was waste and urine throughout the hold; this caused the captives to get sick and to die from illnesses that could not be cured. As the plantation economy expanded, the slave trade grew to meet the growing demand for labor. Western Europe was the final destination for the plantation produce. At this time, Europe was starting to industrialize, and it needed a lot of materials to manufacture goods. Being the power center of the world at the time, they exploited the New World and Africa to industrialize. Africa supplied slaves for the plantations; the New World produced raw material for industries in Europe. Manufactured goods, of higher value, were then sold both to Africa and the New World. The system was largely run by European merchants Sugar has a long history as a plantation crop. Cultivation of sugar had to follow a precise scientific system to profit from the production. Sugar plantations everywhere were disproportionate consumers of labor, often enslaved, because of the high mortality of the plantation laborers. In Brazil, plantations were called "casas grandes" and suffered from similar issues. The slaves working the sugar plantation were caught in an unceasing rhythm of arduous labor year after year. Sugarcane is harvested about 18 months after planting and the plantations usually divided their land for efficiency | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy One plot was lying fallow, one plot was growing cane, and the final plot was being harvested. During the December–May rainy season, slaves planted, fertilized with animal dung, and weeded. From January to June, they harvested the cane by chopping the plants off close to the ground, stripping the leaves and then cutting them into shorter strips to be bundled off to be sent to the sugar cane mill. In the mill, the cane was crushed using a three-roller mill. The juice from the crushing of the cane was then boiled or clarified until it crystallized into sugar. Some plantations also went a step further and distilled the molasses, the liquid left after the sugar is boiled or clarified, to make rum. The sugar was then shipped back to Europe. For the slave laborer, the routine started all over again. With the 19th-century abolition of slavery, plantations continued to grow sugar cane, but sugar beets, which can be grown in temperate climates, increased their share of the sugar market. Indigofera was a major crop cultivated during the 18th century, in Venezuela, Guatemala—and Haiti until the slave rebellion against France that left them embargoed by Europe and India in the 19th and 20th centuries. The indigo crop was grown for making blue indigo dye in the pre-industrial age. Mahatma Gandhi's investigation of indigo workers' claims of exploitation led to the passage of the Champaran Agrarian Bill in 1917 by the British colonial government | https://en.wikipedia.org/wiki?curid=1653010 |
Plantation economy The currency for the Georgia colony was the Pound sterling, a gold coin or very light green bill with the national pound symbol. The currency is worth about one and one half U.S. dollar. The currency for the New York was at the time of the colony the New York pound. This currency was primarily used and made in the 1700s. | https://en.wikipedia.org/wiki?curid=1653010 |
Basic needs The basic needs approach is one of the major approaches to the measurement of absolute poverty in developing countries. It attempts to define the absolute minimum resources necessary for long-term physical well-being, usually in terms of consumption goods. The poverty line is then defined as the amount of income required to satisfy those needs. The 'basic needs' approach was introduced by the International Labour Organization's World Employment Conference in 1976. "Perhaps the high point of the WEP was the World Employment Conference of 1976, which proposed the satisfaction of basic human needs as the overriding objective of national and international development policy. The basic needs approach to development was endorsed by governments and workers’ and employers’ organizations from all over the world. It influenced the programmes and policies of major multilateral and bilateral development agencies, and was the precursor to the human development approach." A traditional list of immediate "basic needs" is food (including water), shelter and clothing. Many modern lists emphasize the minimum level of consumption of 'basic needs' of not just food, water, clothing and shelter, but also sanitation, education, and healthcare. Different agencies use different lists. The basic needs approach has been described as consumption-oriented, giving the impression "that poverty elimination is all too easy." Amartya Sen focused on 'capabilities' rather than consumption | https://en.wikipedia.org/wiki?curid=1657023 |
Basic needs In the development discourse, the basic needs model focuses on the measurement of what is believed to be an eradicable level of poverty. Development programs following the basic needs approach do not invest in economically productive activities that will help a society carry its own weight in the future, rather it focuses on allowing the society to consume just enough to rise above the poverty line and meet its basic needs. These programs focus more on subsistence than fairness. Nevertheless, in terms of "measurement", the basic needs or absolute approach is important. The 1995 world summit on social development in Copenhagen had, as one of its principal declarations that all nations of the world should develop measures of both absolute and relative poverty and should gear national policies to "eradicate absolute poverty by a target date specified by each country in its national context." Professor Chris Sarlo, an economist at Nipissing University in North Bay, Ontario, Canada and a senior fellow of the Fraser Institute, uses Statistics Canada's socio-economic databases, particularly the "Survey of Household Spending" to determine the cost of a list of household necessities. The list includes food, shelter, clothing, health care, personal care, essential furnishings, transportation and communication, laundry, home insurance, and miscellaneous; it assumes that education is provided freely to all residents of Canada. This is calculated for various communities across Canada and adjusted for family size | https://en.wikipedia.org/wiki?curid=1657023 |
Basic needs With this information, he determines the proportion of Canadian households that have insufficient income to afford those necessities. Based on his basic needs poverty threshold, the poverty rate in Canada, the poverty rate has declined from about 12% of Canadian households to about 5% since the 1970s. This is in sharp contrast to the results of Statistic Canada, Conference Board of Canada, the Organisation for Economic Co-operation and Development (OECD) and UNESCO reports using the relative poverty measure considered to the most useful for advanced industrial nations like Canada, which Sarlo rejects. OECD and UNICEF rate Canada's poverty rate much higher using a relative poverty threshold. Statistics Canada's LICO, which Sarlo also rejects, also result in higher poverty rates. According to a 2008 report by the Organisation for Economic Co-operation and Development (OECD), the rate of poverty in Canada, is among the highest of the OECD member nations, the world's wealthiest industrialized nations. There is no official government definition and therefore, measure, for poverty in Canada | https://en.wikipedia.org/wiki?curid=1657023 |
Basic needs However, Dennis Raphael, author of "Poverty in Canada: Implications for Health and Quality of Life" reported that the United Nations Development Program (UNDP), the United Nations Children’s Fund (UNICEF), the Organisation for Economic Co-operation and Development (OECD) and Canadian poverty researchers find that relative poverty is the "most useful measure for ascertaining poverty rates in wealthy developed nations such as Canada." In its report released the Conference Board The Municipality of Rosario, Batangas, Philippines implemented its Aksyon ng Bayan Rosario 2001 And Beyond Human and Ecological Security Plan using this concept as a core strategy through the "Minimum Basic Needs Approach to Improved Quality of Life - Community-Based Information System (MBN-CBIS)" prescribed by the Philippine Government. This approach helped the municipal government identify priority families and communities for intervention, as well as rationalize the allocation of its social development funds. In the United States, the equivalent measures are called "self-sufficiency standards" or "living income standards". Unlike the federal poverty level (FPL), which is calculated from a single, national variable (cost of food), these models assume that different households have different needs, based on factors such as the number and age of children in the household, and the cost of housing in the particular area (usually a county) that they live in | https://en.wikipedia.org/wiki?curid=1657023 |
Basic needs In keeping with the principles of basic needs, these measurements do not include any extra money for entertainment, savings, debt payment, or unusual or avoidable expenses, such as vehicle repairs. It assumes that adults will be working and pay taxes; it also includes costs of all government, charitable, and family subsidies, such as free medical care through Medicaid, free food from the USDA food stamps program or a food bank, or free childcare from a grandparent. All of these costs are ignored by the official FPL measurement, but included in a self-sufficiency standard. Minimum expenses vary by region. For housing, child care, food, transportation, health care, and other necessary expenses, plus net taxes, a family in middle-class Warren County in northwestern Pennsylvania of one adult and two children (one preschooler, one school-aged) needed a minimum income of $30,269 to pay its own way in 2006. Child care is the largest expense in this budget, followed by housing, taxes, and food. The same family, living in the wealthy Seattle region of Washington would need to earn $48,269 to be self-sufficient while remaining in that location. These figures contrast sharply with the FPL for that year, which was just $16,600 for any three-person household. Basic Needs in Development Planning, Michael Hopkins and Rolph Van Der Hoeven (Gower, Aldershot, UK, 1983) | https://en.wikipedia.org/wiki?curid=1657023 |
Journal of Financial Economics The is a peer-reviewed academic journal covering the field of finance. It is considered to be one of the premier finance journals. The editor-in-chief is G. William Schwert (Simon Business School). According to the "Journal Citation Reports", the journal has a 2017 impact factor of 5.162. The journal issues two annual prizes for economics research, Jensen Prize and Fama DFA Prize. | https://en.wikipedia.org/wiki?curid=1658507 |
Light industry is industries that usually are less capital-intensive than heavy industry and is more consumer-oriented than business-oriented, as it typically produces smaller consumer goods. Most light industry products are produced for end users rather than as intermediates for use by other industries. facilities typically have less environmental impact than those associated with heavy industry. For that reason zoning laws are more likely to permit light industry near residential areas. One definition states that light industry is a "manufacturing activity that uses moderate amounts of partially processed materials to produce items of relatively high value per unit weight". Light industries require fewer raw materials, space and power. While light industry typically causes little pollution, particularly compared to heavy industry, some light industry can cause significant pollution or risk of contamination. For example, electronics manufacturing, itself often a light industry, can create potentially harmful levels of lead or chemical wastes in soil without proper handling of solder and waste products (such as cleaning and degreasing agents used in manufacture). | https://en.wikipedia.org/wiki?curid=1659180 |
Distribution software refers to software which manages everything from order processing and inventory control to accounting, purchasing and customer service, supply chain management, sales, customer relationship management, and finance management. More sophisticated solutions can cover areas such as advanced forecasting and replenishment, warehouse management, pick, pack & shipping, EDI or Electronic Data Interchange, Trade Spend Management and more. helps companies to manage internal and external resources efficiently by minimizing stockouts but ensuring overstocking doesn't occur as well. Cloud-based distribution software began its rise in popularity in approximately 2010. The benefits of cloud-based distribution solutions include the ability to access the application from any device that uses a web browser and cost-savings resulting from reduced hardware requirements. | https://en.wikipedia.org/wiki?curid=1660841 |
Price–sales ratio Price–sales ratio, P/S ratio, or PSR, is a valuation metric for stocks. It is calculated by dividing the company's market capitalization by the revenue in the most recent year; or, equivalently, divide the per-share stock price by the per-share revenue. Also, justified p/s is calculated as (profit margin × payout × (1 + g)/(r − g)). Unless otherwise stated, P/S is "trailing twelve months" (TTM), the reported sales for the four previous quarters, although of course longer time periods can be examined. The smaller this ratio (i.e. less than 1.0) is usually thought to be a better investment since the investor is paying less for each unit of sales. However, sales do not reveal the whole picture, as the company may be unprofitable with a low P/S ratio. Because of the limitations, this ratio is usually used only for unprofitable companies, since they don't have a price–earnings ratio (P/E ratio). The metric can be used to determine the value of a stock relative to its past performance. It may also be used to determine relative valuation of a sector or the market as a whole. PSRs vary greatly from sector to sector, so they are most useful in comparing similar stocks within a sector or sub-sector. Comparing P/S ratios carries the implicit assumption that all firms in the comparison have an identical capital structure | https://en.wikipedia.org/wiki?curid=1661038 |
Price–sales ratio This is always a problematic assumption, but even more so when the assumption is made between industries, since industries often have vastly different typical capital structures (for example, a utility vs. a technology company). This is the reason why P/S ratios across industries vary widely. | https://en.wikipedia.org/wiki?curid=1661038 |
Lerner index The Lerner index, formalized in 1934 by Abba Lerner, is a measure of a firm's market power. It is defined by: formula_1 where P is the market price set by the firm and MC is the firm's marginal cost. The index ranges from 0 to 1. A perfectly competitive firm charges P = MC, L = 0; such a firm has no market power. An oligopolist or monopolist charges P > MC, so its index is L > 0, but the extent of its markup depends on the elasticity (the price-sensitivity) of demand and strategic interaction with competing firms. The index rises to 1 if the firm has MC = 0. The Lerner Rule or Lerner Condition is that if it is to maximize its profits, the firm must choose its price so that the Lerner Index equals -1 over the elasticity of demand facing the firm (note that this is not necessarily the same as the market elasticity of demand): A drawback of the Lerner Index is that while it is relatively easy to observe a firm's prices, it is quite difficult to measure its marginal costs. In practice, the average cost is often used as an approximation. The can never be greater than one. As a result, if the firm is maximizing profit, the elasticity of demand facing it can never be less than one in magnitude (|E|<1). If it were, the firm could increase its profits by raising its price, because inelastic demand means that a price increase of 1% would reduce quantity by less than 1%, so revenue would rise, and since lower quantity means lower costs, profits would rise | https://en.wikipedia.org/wiki?curid=1663747 |
Lerner index Put another way, a monopolist never operates along the inelastic part of its demand curve. The Lerner Rule comes from the firm's profit maximization problem. A firm choosing quantity Q facing inverse demand curve P(Q) and incurring costs C(Q) has profit equalling revenue (where R = PQ) minus costs: Under suitable conditions (that this is a convex maximization problem, e.g. P(Q) and C(Q) are linear functions), we can find the maximum by taking the derivative of profit with respect to Q and getting the first-order-condition: which gives the standard rule of MR = MC. To get the Lerner Rule, switch to the notation dC/dQ = MC and rewrite as Divide by P to get using the derivative definition of elasticity. | https://en.wikipedia.org/wiki?curid=1663747 |
Philosophy and economics Philosophy and economics, also philosophy of economics, studies topics such as rational choice, the appraisal of economic outcomes, institutions and processes, and the ontology of economic phenomena and the possibilities of acquiring knowledge of them. It is useful to divide philosophy of economics in this way into three subject matters which can be regarded respectively as branches of action theory, ethics (or normative social and political philosophy), and philosophy of science. Economic theories of rationality, welfare, and social choice defend substantive philosophical theses often informed by relevant philosophical literature and of evident interest to those interested in action theory, philosophical psychology, and social and political philosophy. Economics is of special interest to those interested in epistemology and philosophy of science both because of its detailed peculiarities and because it has many of the overt features of the natural sciences, while its object consists of social phenomena. The question usually addressed in any subfield of philosophy (the philosophy of "X") is "what is "X"?" A philosophical approach to the question "what is economics?" is less likely to produce an answer than it is to produce a survey of the definitional and territorial difficulties and controversies. Similar considerations apply as a prologue to further discussion of methodology in a subject | https://en.wikipedia.org/wiki?curid=1674993 |
Philosophy and economics Definitions of economics have varied over time from the modern origins of the subject, reflecting programmatic concerns and distinctions of expositors. Ontological questions continue with further "what is..." questions addressed at fundamental economic phenomena, such as "what is (economic) value?" or "what is a market?". While it is possible to respond to such questions with real verbal definitions, the philosophical value of posing such questions actually aims at shifting entire perspectives as to the nature of the foundations of economics. In the rare cases that attempts at ontological shifts gain wide acceptance, their ripple effects can spread throughout the entire field of economics. An epistemology deals with how we "know" things. In the philosophy of economics this means asking questions such as: what kind of a "truth claim" is made by economic theories – for example, are we claiming that the theories relate to reality or perceptions? How can or should we prove economic theories – for example, must every economic theory be empirically verifiable? How exact are economic theories and can they lay claim to the status of an exact science – for example, are economic predictions as reliable as predictions in the natural sciences, and why or why not? Another way of expressing this issue is to ask whether economic theories can state "laws". Philosophers of science and economists have explored these issues intensively since the work of Alexander Rosenberg and Daniel M. Hausman dating to 3 decades ago | https://en.wikipedia.org/wiki?curid=1674993 |
Philosophy and economics Philosophical approaches in decision theory focus on foundational concepts in decision theory – for example, on the natures of choice or preference, rationality, risk and uncertainty, and economic agents. Game theory is shared between a number of disciplines, but especially mathematics, economics and philosophy. Game theory is still extensively discussed within the field of the philosophy of economics. Game theory is closely related to and builds on decision theory and is likewise very strongly interdisciplinary. The ethics of economic systems deals with the issues such as how it is right (just, fair) to keep or distribute economic goods. Economic systems as a product of collective activity allow examination of their ethical consequences for all of their participants. "Ethics and economics" relates ethical studies to welfare economics. It has been argued that a closer relation between welfare economics and modern ethical studies may enrich both areas, even including predictive and descriptive economics as to rationality of behavior, given social interdependence. Ethics and justice overlap disciplines in different ways. Approaches are regarded as more philosophical when they study the fundamentals – for example, John Rawls' "A Theory of Justice" (1971) and Robert Nozick's "Anarchy, State and Utopia" (1974). 'Justice' in economics is a subcategory of welfare economics with models frequently representing the ethical-social requirements of a given theory | https://en.wikipedia.org/wiki?curid=1674993 |
Philosophy and economics "Practical" matters include such subjects as law and cost–benefit analysis Utilitarianism, one of the ethical methodologies, has its origins inextricably interwoven with the emergence of modern economic thought. Today utilitarianism has spread throughout applied ethics as one of a number of approaches. Non-utilitarian approaches in applied ethics are also now used when questioning the ethics of economic systems – e.g. rights-based (deontological) approaches. Many political ideologies have been an immediate outgrowth of reflection on the ethics of economic systems. Marx, for example, is generally regarded primarily as a philosopher, his most notable work being on the philosophy of economics. However, Marx's economic critique of capitalism did not depend on ethics, justice, or any form of morality, instead focusing on the inherent contradictions of capitalism through the lens of a process which is today called dialectical materialism. The philosophy of economics defines itself as including the questioning of foundations or assumptions of economics. The foundations and assumption of economics have been questioned from the perspective of noteworthy but typically under-represented groups. These areas are therefore to be included within the philosophy of economics. The "ethics of economic systems" is an area of overlap between business ethics and the philosophy of economics | https://en.wikipedia.org/wiki?curid=1674993 |
Philosophy and economics People who write on the ethics of economic systems are more likely to call themselves "political philosophers" than "business ethicists" or "economic philosophers". There is significant overlap between theoretical issues in economics and the philosophy of economics. As economics is generally accepted to have its origins in philosophy, the history of economics overlaps with the philosophy of economics. Some universities offer joint degrees that combine philosophy, politics and economics. These degrees cover many of the problems that are discussed in Philosophy and Economics, but are more broadly construed. A small number of universities, notably the LSE, the Erasmus University Rotterdam, Copenhagen Business School and the University of Bayreuth offer master's degree programs specialized in philosophy and economics. | https://en.wikipedia.org/wiki?curid=1674993 |
Heckscher–Ohlin model The (H–O model) is a general equilibrium mathematical model of international trade, developed by Eli Heckscher and Bertil Ohlin at the Stockholm School of Economics. It builds on David Ricardo's theory of comparative advantage by predicting patterns of commerce and production based on the factor endowments of a trading region. The model essentially says that countries export products that use their abundant and cheap factors of production, and import products that use the countries' scarce factors. Relative endowments of the factors of production (land, labor, and capital) determine a country's comparative advantage. Countries have comparative advantages in those goods for which the required factors of production are relatively abundant locally. This is because the profitability of goods is determined by input costs. Goods that require inputs that are locally abundant are cheaper to produce than those goods that require inputs that are locally scarce. For example, a country where capital and land are abundant but labor is scarce has a comparative advantage in goods that require lots of capital and land, but little labor—grains. If capital and land are abundant, their prices are low. As they are the main factors in the production of grain, the price of grain is also low—and thus attractive for both local consumption and export. Labor-intensive goods on the other hand are very expensive to produce since labor is scarce and its price is high. Therefore, the country is better off importing those goods | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The Ricardian model of comparative advantage has trade ultimately motivated by differences in labour productivity using different "technologies". Heckscher and Ohlin did not require production technology to vary between countries, so (in the interests of simplicity) the "H–O model has identical production technology everywhere". Ricardo considered a single factor of production (labour) and would not have been able to produce comparative advantage without technological differences between countries (all nations would become autarkic at various stages of growth, with no reason to trade with each other). The H–O model removed technology variations but introduced variable capital endowments, recreating endogenously the inter-country variation of labour productivity that Ricardo had imposed exogenously. With international variations in the capital endowment like infrastructure and goods requiring different factor "proportions", Ricardo's comparative advantage emerges as a profit-maximizing solution of capitalist's choices from "within" the model's equations. The decision that capital owners are faced with is between investments in differing production technologies; the H–O model assumes capital is privately held. Bertil Ohlin first explained the theory in a book published in 1933. Ohlin wrote the book alone, but he credited Heckscher as co-developer of the model because of his earlier work on the problem, and because many of the ideas in the final model came from Ohlin's doctoral thesis, supervised by Heckscher | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model "Interregional and International Trade" itself was verbose, rather than being pared down to the mathematical, and appealed because of its new insights. The original H–O model assumed that the only difference between countries was the relative abundances of labour and capital. The original contained two countries, and had two commodities that could be produced. Since there are two (homogeneous) factors of production this model is sometimes called the "2×2×2 model". The model has "variable factor proportions" between countries—highly developed countries have a comparatively high capital-to-labor ratio compared to developing countries. This makes the developed country capital-abundant relative to the developing country, and the developing nation labor-abundant in relation to the developed country. With this single difference, Ohlin was able to discuss the new mechanism of comparative advantage, using just two goods and two technologies to produce them. One technology would be a capital-intensive industry, the other a labor-intensive business—see "assumptions" below. The model has been extended since the 1930s by many economists. These developments did not change the fundamental role of variable factor proportions in driving international trade, but added to the model various real-world considerations (such as tariffs) in the hopes of increasing the model's predictive power, or as a mathematical way of discussing macroeconomic policy options | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model Notable contributions came from Paul Samuelson, Ronald Jones, and Jaroslav Vanek, so that variations of the model are sometimes called the Heckscher–Ohlin–Samuelson model (HOS) or the Heckscher–Ohlin–Vanek model in the neo-classical economics. The original, 2×2×2 model was derived with restrictive assumptions, partly for the sake of mathematical simplicity. Some of these have been relaxed for the sake of development. These assumptions and developments are listed here. This assumption means that producing the same output of either commodity "could" be done with the same level of capital and labour in either country. Actually, it would be inefficient to use the same balance in either country (because of the relative availability of either input factor) but, in principle this would be possible. Another way of saying this is that the per-capita productivity is the same in both countries in the same technology with identical amounts of capital. Countries have natural advantages in the production of various commodities in relation to one another, so this is an "unrealistic" simplification designed to highlight the effect of variable factors. This meant that the original H–O model produced an alternative explanation for free trade to Ricardo's, rather than a complementary one; in reality, both effects may occur due to differences in technology and factor abundances. In addition to natural advantages in the production of one sort of output over another (wine vs | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model rice, say) the infrastructure, education, culture, and "know-how" of countries differ so dramatically that the idea of identical technologies is a theoretical notion. Ohlin said that the H–O model was a long-run model, and that the conditions of industrial production are "everywhere the same" in the long run. In a simple model, both countries produce two commodities. Each commodity in turn is made using two factors of production. The production of each commodity requires input from both factors of production—capital (K) and labor (L). The technologies of each commodity is assumed to exhibit constant returns to scale (CRS). CRS technologies implies that when inputs of both capital and labor is multiplied by a factor of "k", the output also multiplies by a factor of "k". For example, if both capital and labor inputs are doubled, output of the commodities is doubled. In other terms the production function of both commodities is "homogeneous of degree 1". The assumption of constant returns to scale CRS is useful because it exhibits a diminishing returns in a factor. Under constant returns to scale, doubling both capital and labor leads to a doubling of the output. Since outputs are increasing in both factors of production, doubling capital while holding labor constant leads to less than doubling of an output. Diminishing returns to capital and diminishing returns to labor are crucial to the Stolper–Samuelson theorem. The CRS production functions must differ to make trade worthwhile in this model | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model For instance if the functions are Cobb–Douglas technologies the parameters applied to the inputs must vary. An example would be: where "A" is the output in arable production, "F" is the output in fish production, and "K", "L" are capital and labor in both cases. In this example, the marginal return to an extra unit of capital is higher in the fishing industry, assuming units of fish ("F") and arable output ("A") have equal value. The more capital-abundant country may gain by developing its fishing fleet at the expense of its arable farms. Conversely, the workers available in the relatively labor-abundant country can be employed relatively more efficiently in arable farming. Within countries, capital and labor can be reinvested and reemployed to produce different outputs. Similar to Ricardo's comparative advantage argument, this is assumed to happen without cost. If the two production technologies are the arable industry and the fishing industry it is assumed that farmers can shift to work as fishermen with no cost and vice versa. It is further assumed that capital can shift easily into either technology, so that the industrial mix can change without adjustment costs between the two types of production. For instance, if the two industries are farming and fishing it is assumed that farms can be sold to pay for the construction of fishing boats with no transaction costs. The theory by Avsar has offered much criticism to this | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The basic depends upon the relative availability of capital and labor differing internationally, but if capital can be freely invested anywhere, competition (for investment) makes relative abundances identical throughout the world. Essentially, free trade in capital provides a single worldwide investment pool. Differences in labour abundance would not produce a difference in "relative" factor abundance (in relation to mobile capital) because the labour/capital ratio would be identical everywhere. (A large country would receive twice as much investment as a small one, for instance, maximizing capitalist's return on investment). As capital controls are reduced, the modern world has begun to look a lot less like the world modelled by Heckscher and Ohlin. It has been argued that capital mobility undermines the case for free trade itself, see: Capital mobility and comparative advantage Free trade critique. Capital is mobile when: Like capital, labor movements are not permitted in the Heckscher–Ohlin world, since this would drive an equalization of relative abundances of the two production factors, just as in the case of capital immobility. This condition is more defensible as a description of the modern world than the assumption that capital is confined to a single country. The 2x2x2 model originally placed no barriers to trade, had no tariffs, and no exchange controls (capital was immobile, but repatriation of foreign sales was costless) | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model It was also free of transportation costs between the countries, or any other savings that would favor procuring a local supply. If the two countries have separate currencies, this does not affect the model in any way—purchasing power parity applies. Since there are no transaction costs or currency issues the law of one price applies to both commodities, and consumers in either country pay exactly the same price for either good. In Ohlin's day this assumption was a fairly neutral simplification, but economic changes and econometric research since the 1950s have shown that the local prices of goods tend to correlate with incomes when both are converted at money prices (though this is less true with traded commodities). See: Penn effect. Neither labor nor capital has the power to affect prices or factor rates by constraining supply; a state of perfect competition exists. The results of this work has been the formulation of certain named conclusions arising from the assumptions inherent in the model. Exports of a capital-abundant country come from capital-intensive industries, and labour-abundant countries import such goods, exporting labour-intensive goods in return. Competitive pressures within the H–O model produce this prediction fairly straightforwardly. Conveniently, this is an easily testable hypothesis | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model When the amount of one factor of production increases, the production of the good that uses that particular production factor intensively increases relative to the increase in the factor of production, as the H–O model assumes perfect competition where price is equal to the costs of factors of production. This theorem is useful in explaining the effects of immigration, emigration, and foreign capital investment. However, Rybczynski suggests that a fixed quantity of the two factors of production are required. This could be expanded to consider factor substitution, in which case the increase in production is more than proportional. Relative changes in output goods prices drive the relative prices of the factors used to produce them. If the world price of capital-intensive goods increases, it increases the relative rental rate and decreases the relative wage rate (the return on capital as against the return to labor). Also, if the price of labor-intensive goods increases, it increases the relative wage rate and decreases the relative rental rate. Free and competitive trade makes factor prices converge along with traded goods prices. The FPE theorem is the most significant conclusion of the H–O model, but also has found the least agreement with the economic evidence. Neither the rental return to capital, nor the wage rates seem to consistently converge between trading partners at different levels of development. The "Stolper–Samuelson theorem" concerns nominal rents and wages | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The Magnification effect on prices considers the effect of output-goods price-changes on the real return to capital and labor. This is done by dividing the nominal rates with a price index, but took thirty years to develop completely because of the theoretical complexity involved. Heckscher and Ohlin considered the Factor-Price Equalization theorem an econometric success because the large volume of international trade in the late 19th and early 20th centuries coincided with the convergence of commodity "and" factor prices worldwide. Modern econometric estimates have shown the model to perform poorly, however, and adjustments have been suggested, most importantly the assumption that technology is not the same everywhere. This change would mean abandoning the pure H–O model. In 1954 an econometric test by Wassily W. Leontief of the H–O model found that the United States, despite having a relative abundance of capital, tended to export labor-intensive goods and import capital-intensive goods. This problem became known as the Leontief paradox. Alternative trade models and various explanations for the paradox have emerged as a result of the paradox. One such trade model, the Linder hypothesis, suggests that goods are traded based on similar demand rather than differences in supply side factors (i.e., H–O's factor endowments). Various attempts in the 1960s and 1970s have been made to "solve" the Leontief paradox and save the from failing. From the 1980s a new series of statistical tests had been tried | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The new tests depended on Vanek's formula. It takes a simple form where formula_4 is the net trade of factor service vector for country formula_5, formula_6 the factor endowment vector for country formula_5, and formula_8 the country formula_5's share of the world consumption and formula_10 the world total endowment vector of factors. For many countries and many factors, it is possible to estimate the left hand sides and right hand sides independently. To put it another way, the left hand side tells the direction of factor service trade. Thus it is possible to ask how this system of equations holds. The results obtained by Bowen, Leamer and Sveiskaus (1987) was disastrous. They examined the cases of 12 factors and 27 countries for the year 1967. They found that the both sides of the equations had the same sign only for 61% of 324 cases. For the year 1983, the result was more disastrous. Both sides had the same sign only for 148 cases out of 297 cases (or the rate of correct predictions was 49.8%). The results of Bowen, Leamer, and Sveiskaus (1987) mean that the Heckscher–Ohlin–Vanek (HOV) theory has no predictive power concerning the direction of trade. The critical assumption of the is that the two countries are identical, except for the difference in resource endowments. This also implies that the aggregate preferences are the same. The relative abundance in capital leads the capital-abundant country to produce the capital-intensive good cheaper than the labor-abundant country, and vice versa | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model Initially, when the countries are not trading: The price of the capital-intensive good in the capital-abundant country will be bid down relative to the price of the good in the other country, the price of the labor-intensive good in the labor-abundant country will be bid down relative to the price of the good in the other country. Once trade is allowed, profit-seeking firms move their products to the markets that have (temporary) higher prices. As a result: the capital-abundant country will export the capital-intensive good, the labor-abundant country will export the labor-intensive good. The original and extended model such as the Vanek model performs poorly, as it is shown in the section "Econometric testing of H–O model theorems". Daniel Trefler and Susan Chun Zhu summarizes their paper that "It is hard to believe that factor endowments theory [editor's note: in other words, Heckscher–Ohlin–Vanek Model] could offer an adequate explanation of international trade patterns". A common understanding exists that in the national level HOV model fits well. In fact, Davis and others found that HOV model fitted extremely well with the regional data of Japan. Even when the HOV formula fits well, it does not mean that Heckscher–Ohlin theory is valid. Indeed, Heckscher–Ohlin theory claims that the state of factor endowments of each country (or each region) determines the production of each country (respectively of each region) but Bernstein and Weinstein found that the factor endowments have little predictive power | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The factor-endowments-driven model (FED model) has errors much greater than the HOV model. Unemployment is the vital question in any trade conflict. Heckscher–Ohlin theory excludes unemployment by the very formulation of the model, in which all factors (including labour) are employed in the production. The Leontief paradox, presented by Wassily Leontief in 1953, found that the U.S. (the most capital-abundant country in the world by any criterion) exported labor-intensive commodities and imported capital-intensive commodities, contrary to the Heckscher–Ohlin theory. However, if labor is separated into two distinct factors, skilled labor and unskilled labor, the Heckscher–Ohlin theorem is more accurate. The U.S. tends to export skilled-labor-intensive goods, and tends to import unskilled-labor-intensive goods. The factor equalization theorem (FET) applies only to the most advanced countries. The average wage in Japan was once as big as 70 times the wage in Vietnam. These wage discrepancies are not normally in the scope of the H–O model analysis. Heckscher–Ohlin theory is badly adapted to the analyze South-North trade problems. The assumptions of H–O are unrealistic with respect to North-South trade. Income differences between North and South is the concern that third world cares most. The factor price equalization theorem has not shown a sign of realization, even for a long time lag of a half century. The standard assumes that the production functions are identical for all countries concerned | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model This means that all countries are in the same level of production and have the same technology, yet this is highly unrealistic. Technological gap between developed and developing countries is the main concern for the development of poor countries. The standard ignores all these vital factors when one wants to consider development of less developed countries in the international context. Even between developed countries, technology differs from industry to industry and firm to firm base. Indeed, this is the very basis of the competition between firms, inside the country and across the country. See the New Trade Theory in this article below. In the modern production system, machines and apparatuses play an important role. What is referred to as capital is nothing other than these machines and apparatuses, together with materials and intermediate products consumed in the production process. Capital is the most important of factors, or one should say as important as labor. By the help of machines and apparatuses, the human being got a tremendous production capability. These machines, apparatuses and tools are classified as capital, or more precisely as durable capital, for one uses these items for many years. Their quantity is not changed at once. But the capital is not an endowment given by the nature. It is composed of goods manufactured in the production and often imported from foreign countries. In this sense, capital is internationally mobile and the result of past economic activity | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The concept of capital as natural endowment distorts the real role of capital. Capital is a production power accumulated by the past investment. Capital goods take different forms. It may take the form of a machine-tool such as lathe, the form of a transfer-machine, which you can see under the belt-conveyors. It may take the form of oil or iron core. Despite these facts, capital in the is assumed as homogeneous and transferable to any form if necessary. This assumption is not only far from the reality, but also it includes logical flaw. Capital has a measure, just like anything has weight. How can an amount of various goods be measured? Usually by a system of prices. But prices depend on profit rate. In the Heckscher–Ohlin model, the rate of profit is determined according to how abundant capital is. If capital is scarce, it has a high rate of profit. If it is abundant, the profit rate is low. Here is a logical circle. Before the profit rate is determined, the amount of capital is not measured. This logical difficulty was the subject of academic controversy many years ago—sometimes called the Cambridge Capital Controversies. The conclusion of the controversies was that the concept of homogeneous capital was untenable. Heckscher–Ohlin theorists ignore all these stories without providing any explanation how capital is measured theoretically. Standard Heckscher–Ohlin theory assumes the same production function for all countries. This implies that all firms are identical | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model The theoretical consequence is that there is no room for firms in the H–O model. By contrast, the New Trade Theory emphasizes that firms are heterogeneous. From the middle of the 19th century to 1930s, giant flow of immigration took place from Europe to North America. It is estimated that more than 60 million people crossed the Atlantic Ocean. Some politicians worried if these immigrants may cause various troubles (including cultural conflicts). For those politicians HO-theory provided a good reason “in support of both restrictions on labor migration and free trade in goods”. New Trade theorists challenge the assumption of diminishing returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries would then allow those sectors to dominate the world market via a network effect. See also Intra-industry trade. New Trade Theory analyses individual enterprises and plants in an international competitive situation. The classical trade theory—i.e., the Heckscher–Ohlin model—has no enterprises in mind. The new trade theory treats enterprises in an industry as identical entities. New New Trade Theory gives focus on the diversity of enterprises. It is a fact that some enterprises engage in export and some that do not. Some enterprises invest directly in the foreign country in order to produce and sell in that country. Some other enterprises engage only in export | https://en.wikipedia.org/wiki?curid=1675534 |
Heckscher–Ohlin model Why does this kind of differences occur? New Trade Theory tries to find out the reasons of these well observed facts. The gravity model of international trade predicts bilateral trade flows based on the economic sizes of two nations, and the distance between them. Ricardian theory is now extended in a general form to include not only labor, but also inputs of materials and intermediate goods. In this sense, it is much more general and plausible than the and escapes the logical problems such as capital as endowments, which is, in reality, produced goods. As the theory permits different production processes to coexist in an industry of a country, the Ricardo–Sraffa theory can give a theoretical bases for the New Trade Theory. | https://en.wikipedia.org/wiki?curid=1675534 |
Covered interest arbitrage is an arbitrage trading strategy whereby an investor capitalizes on the interest rate differential between two countries by using a forward contract to "cover" (eliminate exposure to) exchange rate risk. Using forward contracts enables arbitrageurs such as individual investors or banks to make use of the forward premium (or discount) to earn a riskless profit from discrepancies between two countries' interest rates. The opportunity to earn riskless profits arises from the reality that the interest rate parity condition does not constantly hold. When spot and forward exchange rate markets are not in a state of equilibrium, investors will no longer be indifferent among the available interest rates in two countries and will invest in whichever currency offers a higher rate of return. Economists have discovered various factors which affect the occurrence of deviations from covered interest rate parity and the fleeting nature of covered interest arbitrage opportunities, such as differing characteristics of assets, varying frequencies of time series data, and the transaction costs associated with arbitrage trading strategies. An arbitrageur executes a covered interest arbitrage strategy by exchanging domestic currency for foreign currency at the current spot exchange rate, then investing the foreign currency at the foreign interest rate | https://en.wikipedia.org/wiki?curid=1681652 |
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