http://repub.eur.nl/res/aut/6214/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/39913/ 2013-02-01T00:00:00Z Countries are heterogeneous both internally and externally in many ways, as is widely accepted in the policy arena. The booming literature on firm heterogeneity remains under-developed regarding the degree of firm heterogeneity in developing countries, and the relationship between firm heterogeneity and development. We sketch what we know today, discuss some recent contributions, and call for further research in this area. http://repub.eur.nl/res/pub/23264/ 2011-05-01T00:00:00Z This paper studies the impact of cross-border Mergers and Acquisitions (M&As) on Carbon Dioxide emissions. Carbon Dioxide is the main anthropogenic greenhouse gas. A global problem that requires a multilateral solution. To take this into account we introduce an institutional variable, which captures the degree of international commitment to decrease and control the degradation of the environment. We test three hypotheses and find: (i) Asymmetry: the development level of the target country determines the direction of the effect of M&As on CO2 emissions; (ii) Sector-specific impact: pollution intensive sectors have an impact on CO2 emissions, whereas other sectors do not; (iii) Multilateralism: multilateral agreements are important to reduce CO2 emissions. http://repub.eur.nl/res/pub/16302/ 2009-06-01T00:00:00Z We combine the resource curse literature with the literature on cross-border mergers and acquisitions (M&As) to investigate two hypotheses, namely (i) countries with a comparative advantage in natural resources attract more M&As in natural resource intensive sectors and (ii) countries with a high natural resource dependency attract fewer M&As in other sectors. Using the Thomson dataset we test these hypotheses for a sample of 49 African and Latin American countries in the period 1988 - 2007. Both hypotheses were confirmed by our findings. Thus, resource dependency has a “crowding out” effect on M&As in sectors not intensive in natural resources, and a comparative advantage in natural resources has a “crowding in” effect on M&As in sectors intensive in natural resources. http://repub.eur.nl/res/pub/14051/ 2008-10-20T00:00:00Z We propose a quantification of the p-p plot that assigns equal weight to all distances between the respective distributions: the surface between the p-p plot and the diagonal. This surface is labelled the Harmonic Weighted Mass (HWM) index. We introduce the diagonal-deviation (d-d) plot that allows the index to be computed exactly under all circumstances. For two balanced samples absent ties the finite sample distribution of the HWM index is derived. Simulations show that in most cases unbalanced samples and ties have little effect on this distribution. The d-d plot allows for a straightforward extension to the K-sample HWM index. As we have not been able to derive the distribution of the index for K>2, we simulate significance tables for K=3,...,15. An example involving economic growth rates of the G7 countries illustrates that the HWM test can have better power than alternative Empirical Distribution Function tests. http://repub.eur.nl/res/pub/14027/ 2008-09-19T00:00:00Z We analyze the economic forces underlying cross-border Mergers and Acquistions (M&As) using a large bilateral panel data set. The frequent occurrence of "zero" observations provides essential information on the structure of M&A flows, which we model empirically using a two-stage procedure. At the fist stage, an observation is either classified in the Passive Group (always zero) or in the (potentially) Active Group using a logit model. At the second stage, the size of M&A flows in the Active Group is modeled using a gravity-type negative binomial model. We find that: (i) market size (GDP) of both acquirer and target is more important for trade flows than for cross-border M&As, (ii) market development (per capita GDP) is more important for cross-border M&As than for trade flows, (iii) for M&As, the target’s market, both in size and development, is more important than the acquirer’s market, and (iv) the impact of distance is larger on trade flows than for M&As. Financial openness is a prerequisite for becoming active in M&As and positively influences the size of M&A flows. Our estimates on the direction, size, and significance of the main variables are robust for alternative specifications, incorporating lagged stock market value, black market premium, real interest rates, transparency, and exchange rate variability. Finally, we provide additional support and extend the recent results of Blonigen et al. (2007) on outside-market potential and of Bergstrand and Egger (2007) on Rest of World GDP. http://repub.eur.nl/res/pub/12980/ 2008-05-01T00:00:00Z Most FDI takes place between the developed countries, which suggests that the market-seeking motive is important for understanding FDI. However, given the stylized fact that trade barriers (e.g. transportation costs and financial barriers) have declined over the past 20 years, models that aim to explain market-seeking FDI tend to predict a decline in FDI. Neary (2008) offers two explanations for this puzzle: (1) the export platform motive (where firms gain access to an integrated market by investing in one of the “integrated” countries); (2) Neary’s (2007) GOLE model, which explains cross-border mergers and acquisitions (this model is of interest since most FDI comes in the form of M&As). By using a gravity framework, where we also deal with the “zero gravity problem”, we confirm the predictions of the GOLE model. http://repub.eur.nl/res/pub/32186/ 2008-04-01T00:00:00Z Most FDI takes place between the developed countries, which suggests that the market-seeking motive is important for understanding FDI. However, given the stylized fact that trade barriers (e.g. transportation costs and financial barriers) have declined over the past 20 years, models that aim to explain market-seeking FDI tend to predict a decline in FDI. Neary (2008) offers two explanations for this puzzle: (1) the export platform motive (where firms gain access to an integrated market by investing in one of the “integrated” countries); (2) Neary’s (2007) GOLE model, which explains cross-border mergers and acquisitions (this model is of interest since most FDI comes in the form of M&As). By using a gravity framework, where we also deal with the “zero gravity problem”, we confirm the predictions of the GOLE model. http://repub.eur.nl/res/pub/11079/ 2008-01-25T00:00:00Z By combining two large data sets (on international trade flows and cross-border mergers and acquisitions – M&As), we test two implications of Neary’s (2003, 2007) general oligopolistic equilibrium (GOLE) model (incorporating strategic interaction between firms in a general equilibrium setting). In terms of economic importance, the dominant merger wave variable is a positive global-all effect, indicating that M&A waves are an economy-wide, global phenomenon. Country-specific merger wave variables are of secundary importance. In accordance with the bilateral GOLE model as specified by Neary, we find strong evidence that acquiring firms operate in strong sectors. However, we also find (less pronounced) evidence that target firms are active in strong, not weak sectors, which we label the ‘target paradox’. We show how a multi-country extension of the GOLE model that allows for firm heterogeneity can explain this target paradox. http://repub.eur.nl/res/pub/12976/ 2008-01-01T00:00:00Z A country is said to have an absolute advantage over another country in the production of a good or service if it can produce that good or service using fewer real resources. Equivalently, using the same inputs, the country can produce more output. The concept of absolute advantage can also be applied to other economic entities, such as regions, cities, or firms, but we will focus attention on countries, specifically in relation to their production decisions and international trade flows. The fallacy of equating absolute advantages with cost advantages is a never-ending source of confusion. Deviations between the two are caused by the fact that real resources may receive different remunerations in different countries. http://repub.eur.nl/res/pub/12977/ 2008-01-01T00:00:00Z Intra-industry trade arises if a country simultaneously imports and exports similar types of goods or services. Similarity is identified here by the goods or services being classified in the same “sector”. Suppose, for the sake of argument, that we focus on the sector “cars”. Intra-industry trade then occurs, for example, if Germany exports cars to France and simultaneously imports cars from Italy. On the one hand this raises the question why Germany is (at least partially) exporting cars in exchange for importing cars instead of focusing exclusively on so-called inter-industry trade, namely exporting cars in exchange for importing different types of goods (such as food or airplanes). On the other hand, this raises the question why different goods are lumped together in the same sector, as the exported Volkswagen Golfs differ from the imported Ferraris. We address these two basic questions below. http://repub.eur.nl/res/pub/12979/ 2008-01-01T00:00:00Z We analyze the economic forces underlying cross-border Mergers and Acquistions (M&As) using a large bilateral panel data set. The frequent occurrence of "zero" observations provides essential information on the structure of M&A flows, which we model empirically using a two-stage procedure. At the fist stage, an observation is either classified in the Passive Group (always zero) or in the (potentially) Active Group using a logit model. At the second stage, the size of M&A flows in the Active Group is modeled using a gravity-type negative binomial model. We find that: (i) market size (GDP) of both acquirer and target is more important for trade flows than for cross-border M&As, (ii) market development (per capita GDP) is more important for cross-border M&As than for trade flows, (iii) for M&As, the target’s market, both in size and development, is more important than the acquirer’s market, and (iv) the impact of distance is larger on trade flows than for M&As. Financial openness is a prerequisite for becoming active in M&As and positively influences the size of M&A flows. Our estimates on the direction, size, and significance of the main variables are robust for alternative specifications, incorporating lagged stock market value, black market premium, real interest rates, transparency, and exchange rate variability. Finally, we provide additional support and extend the recent results of Blonigen et al. (2007) on outside-market potential and of Bergstrand and Egger (2007) on Rest of World GDP. http://repub.eur.nl/res/pub/12981/ 2008-01-01T00:00:00Z It is widely believed that globalization, through increased factor mobility, will exert a downward pressure on tax rates and hence on public expenditures. Recent advances in the new economic geography (NEG) literature have, however, shown that such a ‘race to the bottom’ is not inevitable. Even with perfect factor mobility, a positive tax differential between core and peripheral countries can persist as long as the agglomeration rent, that is associated with being located in the agglomeration, exceeds the tax gap. In these NEG models the relevance of government spending as a determinant of agglomeration is, however, unduly neglected. The focus is on tax rates only and on the stability of core-periphery equilibria. Using a NEG model where the provision of public goods is allowed to influence the location choices of economic agents and starting intially from a spreading instead of a core-periphery equilibrium, we show that governments can affect the spatial equilibrium through their provision of public goods. Our main finding is that the introduction of public goods fosters agglomeration in the sense that it makes the spreading equilibrium unstable. http://repub.eur.nl/res/pub/12982/ 2007-12-01T00:00:00Z As part of the larger energy market deregulation program, the Dutch energy authority—DTe—has developed the habit to force the Dutch gas transport enterprise—Gas Transport Services, or GTS—to lower its prices. DTe's key argument is that lower gas transport prices will benefit the end-user. Indeed, that might well be the case. This policy, in general, is in line with European legislation on the liberalization of the gas market. We model and simulate the (domestic) welfare effects of a 5 percent transport price reduction. From this, we conclude that at least three observations complicate matters substantially. First, GTS is government-owned, and the dominant shipper—Gasunie Trade & Supply (or GasTerra, as it was recoined recently)—is partly so (50%). Second, shippers enter into the competitive game to make profits. Third, not only is the majority of gas transported in the Netherlands exported to foreign end-users, but also foreign owners have a large stake in Dutch shippers. As a result, part of the rents will always be distributed, or will ‘leak’ away, to foreign consumers and shippers (or their shareholders). These three observations together have three important implications. First, state ownership implies that much rent allocation is simply a matter of circulating money from one government sub-budget to the other. Second, given that the industry is imperfectly competitive, part of the rents will not be passed on to the end-consumers. Third, it is unavoidable that a substantial part of the rents are transferred abroad. A general conclusion for policy-makers is that market liberalization might not bring ex post what they expected ex ante. http://repub.eur.nl/res/pub/12986/ 2007-09-01T00:00:00Z We analyze the costs of trade restrictions for a small developing economy (LDC). Intermediate goods invented elsewhere are only introduced on the LDC market if it is profitable to do so. The LDC economy evolves to a balanced growth path in which income, welfare, and the share of available goods increase if trade restrictions fall. The adjustment path is asymmetric: an increase in trade restrictions leads to a slow-down of economic growth, while a decrease may lead to a rapid catch-up process. The dynamic costs of trade restrictions are in general substantially larger than the static costs. http://repub.eur.nl/res/pub/12987/ 2007-03-01T00:00:00Z In the famous debate between Keynes and Ohlin on the transfer problem, the interaction between non-traded goods and unemployment complicates the analysis considerably. We analyze these issues using four different models to conclude that Keynes’s concern regarding the large burden imposed on Germany was justified. Simultaneously, we show that Ohlin’s presumption that a transfer does not affect the donor’s terms-of-trade either favourably or unfavourably was also justified. Moreover, Ohlin was also right in asserting that a transfer tends to lower the price of non-traded goods for the donor and raise them for the recipient. http://repub.eur.nl/res/pub/12975/ 2007-01-01T00:00:00Z Thomas Friedman, a very influential and widely read journalist (author of the world is flat), argues that distance is no longer a dominant characteristic of the world economy. Competition is thought to be a race to the bottom, with the lowest-wage countries as the big winners. In contrast, using various methods and data sets, we show that many threats of global competition for the position of the traditionally developed (OECD) countries are unwarranted, that distance still dominates all aspects of international trade, and that there is little evidence of income convergence. http://repub.eur.nl/res/pub/12983/ 2007-01-01T00:00:00Z Using a detailed and large data set on cross-border merger and acquisitions we discuss the relationship between theory and observed empirical characteristics: - most FDI is in the form of M&As, - firms engaged in M&As seem to be ‘market-seeking’, - M&As come in waves (the most recent wave is still unfolding), - economic integration (international deregulation) stimulated M&As, - the size of and inequality between M&As grows over time. Our contention in this chapter is that these stylized facts drive and should drive recent theoretical contributions in the field of international economics that try to understand crossborder mergers and acquisitions. Although some models (notably Neary, 2003) explain a number of the characteristics, a full-fledged model of cross-border M&As that, at least in principle, can deal with all the characteristics is still lacking. http://repub.eur.nl/res/pub/12984/ 2007-01-01T00:00:00Z Globale ontwikkelingen in internationale handelsstromen in de afgelopen 150 jaar en in inkomensverschillen tussen landen in de afgelopen zestig jaar analyserend, blijkt dat de wereld niet economisch plat wordt, maar toenemend gepiekt. http://repub.eur.nl/res/pub/12985/ 2007-01-01T00:00:00Z A key issue in development economics is the explanation of core-periphery patterns around the world. Combining this issue with that of analyzing unilateral transfers (e.g. foreign aid) points in the direction of the use of New Economic Geography (NEG) models which, so far, has not been done explicitly. This paper tries to fill this gap in the literature by studying the (possibly ‘catastrophic’) effects of aid around the so-called break-points and sustain-points in a NEG model. We also analyze the effects of a “bystander”, that is a country which is not directly involved in the transfer. In the traditional transfer literature a bystander is known to potentially cause transfer paradoxes. Our findings in this NEG setting are as follows. First, direct transfer paradoxes are not possible in a symmetric setting even if a bystander is present. Second, the effects of foreign aid depend on the level of economic integration between donor and recipient. Third, if the equilibrium from which aid is given is stable, aid only has a temporary effect (even if there is a bystander present). Fourth, if the donor is relatively large, not only the recipient but also the bystander benefits from foreign aid. http://repub.eur.nl/res/pub/12988/ 2007-01-01T00:00:00Z Description Takes a European approach in opposition to many US-oriented texts giving students a better understanding of issues within Europe. Covers a broad range of recent developments with European and global empirical examples and case studies to link theories to the real world, providing students with everything they need to understand this course. This text is supported by a valuable Online Resource Centre which includes a comprehensive study guide which reinforces what students have learnt and prepares them for exams. Written from a European perspective, this text offers coverage of all the key elements of international economics: trade, money and finance. A firm emphasis is placed on ensuring that students understand how the theory relates to real world examples, providing undergraduate students with everything they need to understand this course. Empirical and Political detail is given close attention. International Economics contains 32 chapters split into 2 large parts, with Part II covering International Trade and Part III covering International Money. A comprehensive online study guide for students supports the text with further information, simulations, data, and exercises. http://repub.eur.nl/res/pub/8077/ 2006-11-06T00:00:00Z Using a comprehensive international trade data set we investigate empirical regularities (known as Zipf’s Law or the rank-size rule) for the distribution of the interaction between countries as measured by revealed comparative advantage. Using the recently developed estimator by Gabaix and Ibragimov (2006) we find strong evidence in favor of the rank-size rule along the time, country, and sector dimension for three different levels of data aggregation. The estimated power exponents that characterize the distribution of revealed comparative advantage are stable over time but differ between countries and sectors. These differences are related empirically to country and sector characteristics, including population size, GDP, and factor intensities. http://repub.eur.nl/res/pub/12989/ 2006-01-01T00:00:00Z International trade & the world economy gives a succinct, yet fairly complete, up-to-date, and thorough introduction to the forces underlying all 'real' international economics, such as trade and investment flows, imperfect competition, trade policy, multinationals, economic integration, etc. The book's target audience includes first and second year university and college students in economics, management and business with a working knowledge of microeconomics and macroeconomics. Elementary comprehension of mathematics for economists (simple functions and differentiation) is recommended. The approach is based on the student's active participation using the companion Study Guide and the website. These provide, for example, empirical questions to test theories and simulation questions to get a better feel for the structure of economic models by performing small, user friendly computer simulations and interpreting the results. http://repub.eur.nl/res/pub/12990/ 2006-01-01T00:00:00Z Perhaps the most striking aspect of the current phase of globalization is the increased importance of foreign direct investment (FDI). This is not only true at the global level but also at the regional level. It is clear that the process of economic integration in the European Union has boosted FDI for the EU countries. In the field of international economics, the modeling of FDI has been high on the research agenda in recent years and clear progress has been made in understanding the determinants and effects of FDI (see for instance Barba-Navaretti and Venables (2004) for an overview). The new theoretical insights are, however, not always in line with the facts. One important puzzle in this respect is precisely the fact that economic integration or, in modeling terms, a fall in trade costs has been accompanied by an increase in FDI. From the data we know that so-called horizontal FDI, that is FDI undertaken for market size considerations, is the dominant form of FDI, but theory tells us that a fall in trade costs should go along with a decrease in horizontal FDI. Lower trade costs, ceteris paribus, make it more profitable for firms to serve foreign markets via exports instead of setting up their own production in these markets. http://repub.eur.nl/res/pub/12991/ 2006-01-01T00:00:00Z This accessible introduction to the world economy and to the theory and practice of globalization argues that key topics in international economics cannot be understood without knowledge of international business, and vice versa. It reviews and combines insights from both literatures and applies them to real-world issues, clearly explaining the main concepts of international economics and business in a uniquely integrated approach. This innovative textbook is aimed at students, consultants and managers who have a basic knowledge of economics. Key Features: tComprehensive coverage of the main issues, including: - international trade - capital mobility - comparative advantage - foreign direct investments - multinational behaviour - financial crises - economic growth tCarefully selected international examples and case studies tSpecial interest boxes clearly explain more difficult economic concepts tLively and accessible style tCompanion website includes additional case studies, exercises and answers to exercises, data, illustrations and links. http://repub.eur.nl/res/pub/12992/ 2006-01-01T00:00:00Z The interaction between the extent of location advantages and the intensity of firm competition relative to the size of the market jointly determines the location of industrial activity. Technology, factor endowments, geography, and scale economies are influential for determining location advantages, while agglomeration, variety, proximity, and market access are important for determining the intensity of firm competition relative to the size of the market. This implies, as illustrated below, that sometimes what appears to be a minor change in the balance of the forces determining industrial location, may turn out to have drastic consequences for the global distribution of manufacturing activity. After a brief overview of the strong industrial sectors for a selection of countries, we provide some information on the ongoing process of globalization. Next, we review some of the forces determining industrial location and give recent changes, which are the result of these forces. Finally, we discuss the importance of local interactions between producers, consumers, and firms for determining competitiveness and the location of industrial activity. http://repub.eur.nl/res/pub/12993/ 2005-12-30T00:00:00Z The information contained in PP-plots is transformed into a single number. The resulting Harmonic Mass (HM) index is distribution free and its sample counterpart is shown to be consistent. For a wide class of CDFs the exact analytical expression of the distribution of the sample HM index is derived, assuming the two underlying samples to be drawn from the same distribution. The robustness of the concomitant test statistic is assessed, and four different methods are discussed for applying the HM test in case of asymmetric samples. http://repub.eur.nl/res/pub/7232/ 2005-10-31T00:00:00Z We derive and discuss a general, but simple geographical economics model with congestion, allowing us to explain the economic viability of small and large locations. The model generalizes some previous work and lends itself to analyzing the impact of public policy in terms of infrastructure changes. We show analytically that scale effects (total size of the economy) and changes in the cost structure (fixed and marginal costs) are important from a welfare perspective, but largely irrelevant from an economic dynamics perspective. http://repub.eur.nl/res/pub/6595/ 2005-02-01T00:00:00Z This four-chapter overview of basic exchange rate theories discusses (i) the elasticity and absorption approach, (ii) the (long-run) implications of the monetary approach, (iii) the short-run effects of monetary and fiscal policy under various economic conditions, and (iv) the transition from short-run to long-run in a sticky-price model with rational expectations. We provide ample anecdotal, historical, and heuristic information on the goodness-of-fit of the various exchange rate models based on simple graphs, statistics, and tests. Details are provided in technical notes. http://repub.eur.nl/res/pub/12978/ 2005-01-01T00:00:00Z The theoretically necessary and sufficient condition for the correspondence between ‘revealed’comparative advantage and pre-trade relative prices derived by Hillman (1980) is analyzed empricially for virtually all countries of the world over an extended period of time. This yields 10 stylized facts, including that (i) violations of the Hillman condition are small as a share of the number of observations, but quite substantial as a share of the value of world exports, (ii) violations occur relatively frequent in the period 1970 – 1984 while they hardly ever occur in the period 1985 – 1997, and (iii) violations occur foremost in primary product and natural-resource intensive sectors, for sectors in countries in Africa, the Middle East, Latin America, and Eastern Europe. The condition appears also to be useful for identifying erroneous trade flow classifications. http://repub.eur.nl/res/pub/13003/ 2005-01-01T00:00:00Z Cross border mergers and acquisitions (M&As) are the main force behind the surge in foreign direct investment. Yet despite its obvious quantitative importance, the reasons for cross border M&As are not well-understood. Two basic motives stand out: an efficiency motive and a strategic motive. Efficiency gains arise because takeovers increase synergy between firms that increase economies of scale or scope. Strategic gains arise if M&As change the market structure, and thus competition and profits. Together with Steven Brakman (University of Groningen) and Harry Garretsen (Utrecht School of Economics) I am currently involved in research on the size and structure of cross-border M&As, particularly their relationship with revealed comparative advantage for five countries (Australia, France, the Netherlands, the United Kingdom, and the United States). In this paper I restrict myself to providing an overview of cross-border M&As. http://repub.eur.nl/res/pub/13004/ 2005-01-01T00:00:00Z Er was eens een tijd dat de Westerse media zich grote zorgen maakten over de indrukwekkende en beangstigende groei van een Oosterse economie. Hoewel nog steeds aanzienlijk armer dan het Westen, was die economie in staat gebleken zich te transformeren van een boerenmaatschappij tot een industrieel bolwerk (dat zelfs mensen naar de ruimte stuurt). Die staatsgesteunde hogere groei dan in het chaotisch georganiseerde Westen zou er spoedig voor zorgen dat het Westen overvleugeld zou worden. http://repub.eur.nl/res/pub/6598/ 2005-01-01T00:00:00Z Geographical economics analyzes the endogenous determination of the location of economic activity in a general equilibrium framework. We investigate the impact of pollution by focusing on the interaction between location advantages and negative pollution externalities associated with local production. We distinguish between two goods (food and manufactures) and two factors of production (mobile human capital and immobile unskilled labor) and show that agglomeration of economic activity tends to become less attractive with pollution, and thus less likely. Moreover, we provide a simple necessary and sufficient condition for the spreading of economic activity to become more attractive, and thus more likely. http://repub.eur.nl/res/pub/6631/ 2004-06-01T00:00:00Z We analyze the distribution of economic activity across space for different types of activity and different levels of aggregation. Not only is this distribution highly uneven (independently of the type of activity and level of aggregation), it is also remarkably regular regarding its size distribution (rank-size rule or Zipf’s Law) and regarding its interaction (gravity equation). http://repub.eur.nl/res/pub/6655/ 2004-03-23T00:00:00Z We analyze the dynamics of Chinese comparative advantage as measured by export shares and the Balassa index using 3-digit and 4-digit sectors for the period 1970 – 1997. We use novel tools to identify periods of rapid structural change and the persistence of comparative advantage, such as Galtonian regressions, probability-probability (p-p) plots, and the Harmonic Mass index, to supplement the usual descriptive statistical methods and mobility indicators associated with Markov transition matrices. http://repub.eur.nl/res/pub/6662/ 2004-02-10T00:00:00Z We analyze the empirical violation of the Hillman condition, a necessary and sufficient condition for the correspondence between comparative advantage and pre-trade relative prices. Our comprehensive data set allows us to investigate the Hillman condition for virtually all countries of the world, over an extended period of time, for many sectors, and for different levels of aggregation. Violations of the Hillman condition are small as a share of the number of observations, but can be substantial as a share of the value of world exports. Measured either way, violations occurred much more frequently in the 1970s and early 1980s, a difference mostly caused by the two oil crises. As the condition is useful for identifying various anomalies, we argue that it should be included as a standard diagnostic test for empirical studies into comparative advantage. http://repub.eur.nl/res/pub/13011/ 2004-01-01T00:00:00Z We analyze the dynamics of Chinese comparative advantage as measured by export shares and the Balassa index using 3-digit and 4-digit sectors for the period 1970 – 1997. We use novel tools to identify periods of rapid structural change and the persistence of comparative advantage, such as Galtonian regressions, probability-probability (p-p) plots, and the Harmonic Mass index, to supplement the usual descriptive statistical methods and mobility indicators associated with Markov transition matrices. http://repub.eur.nl/res/pub/8040/ 2003-10-31T00:00:00Z Rede, in verkorte vorm uitgesproken bij de aanvaarding van het ambt van hoogleraar Economische Groei en Agglomeratie vanwege Vereniging Trustfonds Erasmus Universiteit Rotterdam aan de Faculteit der Economische Wetenschappen van de Erasmus Universiteit Rotterdam op vrijdag 31 oktober 2003 http://repub.eur.nl/res/pub/13014/ 2003-01-01T00:00:00Z Gezien de veelheid aan mogelijke analyses betreffende de spreiding van economische activiteit, in termen van wat (bevolking, toegevoegde waarde, keuze van sectoren), waar (globale regio’s, landen, districten, steden) en hoe (structuur in spreiding en interactie) is er een verbluffende helderheid in uitkomst van die analyse, samengevat in de volgende zes gestileerde feiten (waarvan de laatste nieuw is): § Er is ongelijkmatige spreiding ongeacht de soort economische activiteit. § Er is ongelijkmatige spreiding ongeacht het geografische aggregatieniveau. § Er is ongelijkmatige spreiding ongeacht het economische aggregatieniveau. § Er is een opmerkelijke regelmaat in de spreiding van economische activiteit. § Er is een opmerkelijke regelmaat in de interactie tussen economische centra. § Er is een opmerkelijke regelmaat in de verdeling van comparatief voordeel. http://repub.eur.nl/res/pub/13024/ 2002-01-01T00:00:00Z With the completion of EMU, tax competition and, more in general, locational competition is high on the EU policy agenda. In contrast to the standard neo-classical reasoning, recent advances in the theory of trade and location have shown that tax competition does not necessarily lead to a "race to the bottom". In these recent discussions the relevance of government spending as an instrument for locational competition is unduly neglected. We therefore introduce a more elaborate government sector in a geographical economics model by analyzing government spending and government production. By changing the relative size, direction or efficiency of the production of public goods, our simulation results show that governments can change the equilibrium between agglomerating and spreading forces. In addition, we show analytically that the introduction of public goods fosters agglomeration. Ultimately, our paper shows that by restricting attention to taxes, one ignores that government spending also determines the attractiveness of a country as a location for the mobile factors of production. http://repub.eur.nl/res/pub/13025/ 2002-01-01T00:00:00Z International trade & the world economy gives a succinct, yet fairly complete, up-to-date, and thorough introduction to the forces underlying all 'real' international economics, such as trade and investment flows, imperfect competition, trade policy, multinationals, economic integration, etc. The book's target audience includes first and second year university and college students in economics, management and business with a working knowledge of microeconomics and macroeconomics. Elementary comprehension of mathematics for economists (simple functions and differentiation) is recommended. The approach is based on the student's active participation using the companion Study Guide and the website. These provide, for example, empirical questions to test theories and simulation questions to get a better feel for the structure of economic models by performing small, user friendly computer simulations and interpreting the results. http://repub.eur.nl/res/pub/6865/ 2001-06-19T00:00:00Z We analyze the impact of obsolescence of economic inventions by incorporating maintenance costs in the endogenous growth model of expanding product varieties. This contrasts with the existing literature, which ignores maintenance costs and uses the model of quality improvements to describe obsolescence. If the maintenance costs become too high, the operating profits become negative and the firm stops producing the variety. This diminishes the life span of innovations, thus reducing the return on investment in research and development and the growth rate of the economy. http://repub.eur.nl/res/pub/13026/ 2001-01-01T00:00:00Z http://repub.eur.nl/res/pub/13027/ 2001-01-01T00:00:00Z http://repub.eur.nl/res/pub/13028/ 2000-01-01T00:00:00Z Reviews the book "Global Capital Flows: Should They Be Regulated?," by Stephany Griffith-Jones http://repub.eur.nl/res/pub/13030/ 1999-01-01T00:00:00Z I develop a growth model with three sectors of production (final goods, intermediate goods, and R&D), each with a different technology using three inputs (labour, capital, and knowledge), and combining elements from three strands of the literature (neo-classical growth, and AK and R&D endogenous growth). The paper suggests not only that capital accumulation and innovation are complementary processes, neither of which would take place in the long run without the other, but also that this process can be self-sustaining either through Hicks-neutral knowledge spillovers without capital accumulation, or through Harrod-neutral knowledge spillovers with capital accumulation. http://repub.eur.nl/res/pub/13031/ 1999-01-01T00:00:00Z We offer a general-equilibrium economic approach to Zipf's Law or, more generally, the rank-size distribution—the striking empirical regularity concerning the size distribution of cities. We provide some further understanding of Zipf's Law by incorporating negative feedbacks (congestion) in a popular model of economic geography and international trade. This model allows the powers of agglomeration and spreading to be in long-run equilibrium, which enhances our understanding of the existence of a rank-size distribution of cities. http://repub.eur.nl/res/pub/13033/ 1999-01-01T00:00:00Z In dit boek komen veel economische onderwerpen aan de orde, welke dikwijls ook te pas en te onpas in de politiek gebruikt worden. De mondiale economie stoelt inmmers op lokale en nationale aspecten. In 157 bladzijden wordt in tien hoofdstukken getracht de lezer inzicht te geven in actuele economische onderwerpen. Het boek wil dan ook informatie verschaffen om beter en met verstand van zaken over economie te kunnen praten. Enkele van de behandelde onderwerpen: inleiding tot de mondiale economie (ook in Nederland met de internationale handel). De handelsvoordelen van Nederland. Protectie met de moderne ontwikkelingen in deze. Beurs en geld, de EMU en de economische groei. Aan het eind van ieder hoofstuk worden conclusies getrokken, waardoor de leesbaarheid wordt vergroot. Ook de index vergemakkelijkt het opzoeken van de te raadplegen tekst. In kort bestek kan dit boek niet al te diep op de onderwerpen ingaan. Maar voor de meer geïnteresseerden treft men achterin suggesties aan voor verdere studie. Het boek is gestoken in een meerkleuren-omslag. Zeer lezenswaardig. http://repub.eur.nl/res/pub/13035/ 1999-01-01T00:00:00Z Introducing a finite reservation price in Hotelling's spatial duopoly with linear transportation costs shows that (i) there does not exist a pure strategy symmetric location equilibrium if the reservation price is ‘high', (ii) there is a continuum of (monopolistic) equilibria if the reservation price is ‘low', and (iii) there exists a unique pure strategy symmetric location equilibrium (in which the two firms compete with each other and cover the entire market) if the reservation price is ‘intermediate'. The equilibrium distance between the two firms in the latter case is at least a quarter and at most half the length of the market. http://repub.eur.nl/res/pub/13037/ 1999-01-01T00:00:00Z In welke economische activiteit is Nederland relatief sterk? Om dit te meten is het gebruikelijk om de export van Nederlandse producten of bedrijfstakken te vergelijken met de export van deze producten van andere landen. Daarbij is het mogelijk om de wereld als geheel als referentiekader te nemen, maar daaraan kleeft een aantal bezwaren. Zo kunnen landen met een totaal verschillend ontwikkelingsniveau worden vergeleken (bijvoorbeeld Nederland en Kenia). Bovendien kunnen tal van handelsrestricties een storende invloed hebben op de waargenomen exportstromen (zowel Nederland als Kenia exporteren bijvoorbeeld bloemen naar Duitsland; toegang tot de Duitse markt is voor Nederland als lid van de Europese Unie echter veel makkelijker). http://repub.eur.nl/res/pub/13041/ 1998-01-01T00:00:00Z International transfers have attracted the attention of economists ever since the famous debate between Keynes and Ohlin on German reparation payments after World War I. Today the subject is of even greater importance with billions of dollars flowing between nations as unilateral transfers. However the emphasis has shifted from balance-of-payments issues to the welfare consequences following a transfer, and in particular the welfare issues arising from aid to developing countries. In The Economics of International Transfers Professors Brakman and van Marrewijk present a complete overview of transfers (including the history of transfers and current transfer flows), and their own unified framework in which they present important and original research. Subjects considered include welfare effects, distortions, third parties, rent-seeking, the ‘trade or aid’ discussion, multi-lateral agencies, tied aid and imperfect competition. http://repub.eur.nl/res/pub/13042/ 1998-01-01T00:00:00Z Shows the impact of environmental policies on economic growth. Occurrence of endogenous growth; Laissez-faire equilibrium; Pareto optimal allocations. http://repub.eur.nl/res/pub/13043/ 1998-01-01T00:00:00Z Als docent of examinator ben ik nooit op de middelbare school actief geweest. Als student, met diploma's van mavo, havo, RMTuS (= tuinbouwschool) en vwo, was ik weliswaar bovengemiddeld actief, maar de meest recente ervaring is alweer 17 jaar geleden. Ik kan dus als buitenstaander een blik werpen op de eindexamens vwo en havo. Zo'n examen bestaat uit 'opgaven' (5 voor het vwo en 6 voor de havo), onderverdeeld in (doorgenummerde) 'vragen' (34 voor het vwo en 36 voor de havo). Dit onderscheid tussen opgaven en vragen is voor het onderstaande dus van belang. Om te beginnen zal ik de sterke punten van de twee examens belichten die mij bij bestudering zijn opgevallen. Daarna volgen wat kritische opmerkingen: eerst wat kleine missers, en dan mijn belangrijkste bezwaar. http://repub.eur.nl/res/pub/13045/ 1998-01-01T00:00:00Z A two-country trade model of foreign aid is developed. The aid-receiving country suffers from Harris-Todaro type unemployment. Aid is either untied, tied to sector-specific capital, or tied to intersectorally mobile capital. These types of aid are compared by examining their terms-of-trade and welfare effects to show that (i) welfare paradoxes are possible, (ii) the world as a whole may gain from aid, (iii) a conflict of interest concerning the type of aid may arise between donor and recipient, and (iv) under plausible conditions untied aid is better for the recipient and the world. http://repub.eur.nl/res/pub/12949/ 1997-01-01T00:00:00Z We unite the theories of factor abundance and monopolistic competition to explore the general equilibrium relations between trade in producer services, economies of scale and factor markets. In our model, two final goods are produced using capital, labor, and a variety of differentiated producer services that are produced under increasing returns to scale. We analyze the implications for comparative advantage and trade in goods between two countries that differ in factor endowments and in technology of service provision. Moreover, we use the concept of the integrated world equilibrium to investigate trade in goods and services, also when services require foreign direct investments. http://repub.eur.nl/res/pub/13046/ 1997-01-01T00:00:00Z De 'endogene groei'-revolutie in de economische wetenschap heeft ons meer inzicht gegeven in de factoren die bepalend zijn voor langdurige economische groei. Deze theorie stelt dat groei in hoge mate bepaald wordt door factoren als investeringen (zowel in fysiek als menselijk kapitaal), de openheid van een economie en de mate van scholing, gezondheidszorg, stabiliteit, rechtszekerheid en infrastructuur. Het overheidsbeleid is dan ook van grote betekenis voor de (endogene) groei van een economie. http://repub.eur.nl/res/pub/13047/ 1997-01-01T00:00:00Z Nederland bevindt zich in een muntzone met Duitsland. Dit is een afspraak tussen de Duitse en Nederlandse centrale banken om de onderlinge wisselkoers binnen een nauwe band te laten fluctueren. Wat betekent deze afspraak voor wisselkoersveranderingen in de praktijk? Is het zo dat beide centrale banken elke dag met grote moeite de wisselkoers binnen de toegestane bandbreedte moeten houden, of is de afspraak als zodanig ook van invloed? http://repub.eur.nl/res/pub/13069/ 1996-01-01T00:00:00Z The article analyzes a two-country general equilibrium model to examine the role played by services in the world economy. Services play an increasingly important role in the world economy, as observed, for instance, by the growing share in employment, production, exports and foreign direct investment. Firms increasingly delegate costly, knowledge intensive intermediate-stage processing activities in their production processes to specialized outside producers in order to gain cost advantages. Countries generally differ in the extent to which producers in final goods sectors have the opportunity to gain cost advantages by using knowledge intensive producer services. In the article, the authors concentrate on trade patterns between countries that are similar in all respects, except that one country lacks a producer services sector. The authors also develop a general equilibrium model in which a home country and a foreign country both produce a manufactured good and a basic commodity called food. http://repub.eur.nl/res/pub/13070/ 1996-01-01T00:00:00Z Incorporating regional asymmetry and negative feedbacks (congestion) in a model of economic geography and international trade shows that complete specialization of production at one location is unlikely. We identify an agglomerating force: the home market effect, and two spreading forces, competition for demand from immobile sectors of production and congestion. We demonstrate that negative feedbacks can explain the economic viability of small industrial regions observed in the real world. Simulations clarify the basic structure of the model. http://repub.eur.nl/res/pub/13071/ 1996-01-01T00:00:00Z Neo-classical economic theory shows that managed trade or protectionism is (almost) always welfare decreasing. However, measurements of the welfare costs of protectionism based on neo-classical models seem to suggest that these costs are quite small. We discuss general new insights and developments in the theory, policy and empiricism of international trade. The observation that intra-industry trade and the services sector are important has led to a shift in theory away from constant returns to scale and perfect competition towards economies of scale and scope, externalities, market imperfections, and imperfect competition. Although this, in principle, opens the door to beneficial government intervention in the economic process, we emphasize that the true costs of protection can potentially be much higher than is generally acknowledged as a result of the above mentioned shift. http://repub.eur.nl/res/pub/13073/ 1996-01-01T00:00:00Z Bedrijven clusteren in geografische gebieden. Dit geldt niet alleen voor bedrijvigheid in het algemeen (in de Randstad zijn meer bedrijven dan in Friesland), maar ook voor individuele bedrijfstakken (de televisie rond Hilversum, de tuinbouw in het Westland). Deze bedrijfsclustering, die verre van nieuw is, kan worden toegeschreven aan een veelheid van factoren, die geologisch (aardolie in het Midden-Oosten, diamanten in Zuid-Afrika), geografisch (de haven van Rotterdam), cultureel (Mormonen in Utah), klimatologisch (olijven uit Italië, kiwi's uit Nieuw-Zeeland) of economisch (bijvoorbeeld marktomvang: de wallen in Amsterdam, niet in Staphorst) van aard kunnen zijn. http://repub.eur.nl/res/pub/13074/ 1996-01-01T00:00:00Z De voordelen van vrijhandel zijn zeer beperkt, al-thans als we de empirische schattingen van vooraanstaande economen en internationale organisaties mogen geloven. Zo worden de voordelen van liberalisatie voor de Europese Unie geraamd op ongeveer 0,5% van het bnp 1. De door het IMF geschatte positieve effecten van de GATT Uruguay Ronde zijn in dit verband, met een nog altijd schamele 1% van het wereld-bnp, een uitschieter. Hoe komt het toch dat dit onderwerp zoveel aandacht van economen, politici en de media vraagt terwijl de schattingen voor de welvaartsverbetering van handelsliberalisatie zo laag zijn? Een van de mogelijke antwoorden wordt gegeven door de Amerikaanse econoom Paul Romer: angst voor het onbekende. http://repub.eur.nl/res/pub/13077/ 1996-01-01T00:00:00Z We examine transfers and tied aid in a model with increasing returns to scale and monopolistic competition. Transfers give rise to an additional (love of variety) welfare effect and affect the utility possibility locus. Generic tied aid may exacerbate or reverse these results. The popularity of aid tied to specific manufactured goods can be explained through rent-seeking behavior since such aid gives rise to profits in the donor country. These profits in turn largely repatriate the transfer such that donors can appear to be more generous than they really are. http://repub.eur.nl/res/pub/13078/ 1995-01-01T00:00:00Z Economists disagree on the influence of time on the probability of success of economic sanctions. Some argue that it takes time to convince the sanction target. Others stress that economic adjustment will reduce incentives to comply. We seek to reconcile these different literatures, modelling the target's decision to comply as a function of both (anticipatory) economic adjustment and Bayesian learning. We show that sanctions which do not work instantaneously (ie there is neither political compliance nor economic adjustment) can work in the long run, but only if the learning effect dominates the adjustment effect. A sufficient condition for ultimate compliance is that (potential) sanction damage that cannot be avoided by adjustment in the long run exceeds the yield of misconduct. http://repub.eur.nl/res/pub/13080/ 1995-01-01T00:00:00Z Een van de problemen waar de economische wetenschap al geruime tijd mee worstelt is het gelijktijdig bestaan van economisch ontwikkelde regio’s en minder ontwikkelde regio’s. Waarom is het ene land verder ontwikkeld dan het andere? Het vakgebied van de ontwikkelingseconomie heeft deze vraag als hoofdthema van onderzoek. Nog steeds is er geen afdoende verklaring voor dergelijke verschillen in ontwikkelingsniveau.2 Niet alleen is er geen onomstreden theorievorming om de allerarmste landen door overheidsbeleid op te stuwen in de vaart der volken, maar ook als de economische ontwikkelingen voorspoedig zijn, zoals bij een aantal landen in zuidoost Azië, is een goede verklaring niet voorhanden. Dit komt de reputatie van de economische wetenschap in het algemeen, en van de ontwikkelingseconomie in het bijzonder, niet ten goede. http://repub.eur.nl/res/pub/21544/ 1995-01-01T00:00:00Z Economists disagree on the influence of time on the probability of success of economic sanctions. Some argue that it takes time to convince the sanction target. Others stress that economic adjustment will reduce incentives to comply. We seek to reconcile these different literatures [...] http://repub.eur.nl/res/pub/13081/ 1994-01-01T00:00:00Z We investigate the effects of (i) profit distribution to either laborers or capital-owners, (ii) sector-specific or efficient rationing schemes, and (iii) government consumption in a two-sector disequilibrium growth model with sluggish real wage rate adjustment (which affects capital accumulation). http://repub.eur.nl/res/pub/13083/ 1994-01-01T00:00:00Z Several pre-eminent economists have appropriately contributed to this book, published in honor ofHenk Houthakker, which also collects four previously unpublished articles by Houthakker himself, namely his presidential address to the Econometric Society, a paper on the dynamics of consumption and saving and two notes relating to the origins of his Consumer Demand in the United States (with Lester Taylor). The ten contributions are either inspired by Houthakker's work, or variations on themes frequently investigated by Houthakker. http://repub.eur.nl/res/pub/13097/ 1993-02-01T00:00:00Z Endogenous population growth, i.e., making the rate of population growth dependent on society's opulence, causes parametric changes to have a larger impact and can cause multiplicity of steady states in a dynamic intertemporal optimization framework. This provides a simple explanation for the possibility of differing growth paths between countries (using a standard production function) or another explanation of the poverty trap. We give two examples (opulence sensitivity and production sensitivity) that both give rise to three steady states in which poor (rich) countries will evolve over time to the low (high) income steady state. In both examples there are middle income countries that will choose the low (high) income steady state if they are impatient (patient), where patience is measured through the rate of time preference o. Foreign aid in the form of a large transfer of capital from abroad enables poor and impatient middle income countries to move to the high income steady state. http://repub.eur.nl/res/pub/13091/ 1993-01-01T00:00:00Z Using an approach where the probability of trade is a function of the volume of trade, we show that uncertainty in international trade may force a small economy to specialize in the production of the good in which it has a comparative disadvantage. This reversal in the pattern of incomplete specialization in production is not reflected in the trade pattern. The first-best policy responce in the presence of endogenous uncertainty is not the imposition of tariffs or subsidies but a reduction of trade uncertainty itself, possibly through clear commitment to free trade or GATT rules and procedures. http://repub.eur.nl/res/pub/13095/ 1993-01-01T00:00:00Z An analysis is presented of a 2-good small open economy characterized by sluggish real wage rate adjustment. This causes short-run unemployment or excess-demand on the labor market, which in turn affects the speed of capital accumulation. Global stability is ensured if laborers receive the profits or if capital-owners receive the profits and save less than laborers. Otherwise, if capital-owners receive the profits and save more than laborers, local stability and "box" stability hold, but endless cycles cannot be excluded. Both short-run disequilibrium and income redistribution may have long-run effects, i.e., may affect the long-run capital-labor ratio. The model is applied to examine the dynamic implications of a change in the terms-of-trade and of real wage rigidity. http://repub.eur.nl/res/pub/13098/ 1993-01-01T00:00:00Z Recentiy, the importance of environmental and economic "win-win" situations has been stressed, indicating that care of the environment requires economic growth, while economic growth in turn cannot take place without taking proper care of the environment. We generalize a popular endogenous growth model with constant returns to scale in a broad measure of the capital stock, by making consumers care not only about current and future consumption levels, but also about the current and future quali'y of the environment, to see under what circumstances "win-win" situations can arise. The capital stock is decomposed into private capital and productive government spending. Production of goods and services causes pollution which is detrimental to the environment. The government can invest in abatement processes to clean up the environment and in productive government spending by taxing production (= income). There is, therefore, both an environmental externality and a public good, i.e. productive government spending. This brings us within the realms of second-best economics. We investigate the decentralized market economy as well as the command economy. Two approaches to model the environment can be distinguished in the literature: the stock approach and the flow approach. The flow approach assumes that the level of environmental quality changes instantaneously if the production level changes or if the level of abatement changes and is particularly relevant for analysing the environmental externality associated with noise. The stock approach, on the other hand, assumes that pollution and abatement indirectly influence the environment by affecting the rate of change of the environment over time and is more relevant for analyzing the problems of acid rain. http://repub.eur.nl/res/pub/13105/ 1992-09-01T00:00:00Z In a small open economy it is optimal to first maximize national income and second choose the best consumption point. The same two-step procedure under (quantitative) uncertainty is suboptimal if one of the goods is used as numéraire. Optimality is restored however, if nominal prices are deflated by the exact price index. Hence there is equivalence between the appropriate two-step procedure and the introduction of a stock market under uncertainty (Diamond 1967) under ideal circumstances. http://repub.eur.nl/res/pub/12427/ 1992-01-01T00:00:00Z Investigates three factors of economic growth. http://repub.eur.nl/res/pub/13107/ 1991-06-01T00:00:00Z In a competitive and Walrasian stable world with two goods transfer paradoxes are very robust to endogenization (relating the size of the transfer to either the donor's or the recipient's GNP). Donor enrichment and/or recipient impoverishment occur in very general formulations of endogenization if and only if they occur in the model in which transfers are exogenous (as is usually assumed). Endogenization in practice will probably cause a dampening effect (smaller price and welfare changes than in the case of pure exogenous transfers). An earlier version of this paper was presented at the Econometric Society European Meeting in Munich, 1989, and EADI (European Association of Development Research and Training Institutes) in Oslo, 1990. We are grateful to an anonymous referee, Willem Buiter, Peter van Bergeijk, Richard Gigengack, Jan Pen, Georg Tillmann, Edward Towrr, and Casper de Vries for helpful comments. http://repub.eur.nl/res/pub/13108/ 1991-06-01T00:00:00Z Analyzing an overlapping generations model with growing endowments and a government sector that is permitted to have a budget deficit forces the real interest factor to deviate from Samuelson's biological interest factor. Fiscal policies then affect the real interest factor, which in turn has consequences both for the direction and the effectiveness of those fiscal policies. These consequences depend upon the borrowing position of the young. http://repub.eur.nl/res/pub/13115/ 1990-03-01T00:00:00Z A small trading economy which produces and trades an arbitrary, but finite, number of goods and faces given terms of trade in combination with an uncertain volume of trade is studied. An exogenous probability of trade disruption forces both public and private decision-makers to specialize to a lesser extent in accordance with their comparative advantage. A unique optimal point of production exists for each probability of trade disruption. A private competitive economy will not produce at this point: it produces too much of the good with a comparative advantage. http://repub.eur.nl/res/pub/12432/ 1990-01-01T00:00:00Z If the real exchange rate follows approximately a random walk and in the presence of nontraded goods, a monetary union may generate a Pareto improvement. The argument is based on the analogy with the advantages that derive from the formation of a customs union. A novel unit roots test based on the arc sine law is advanced. http://repub.eur.nl/res/pub/13122/ 1989-01-01T00:00:00Z Met gebruik van experimenten is in de economische wetenschap vaak niet goed mogelijk. Daardoor is het dikwijls bijzonder moeilijk de empirische waarde van verschillende theorieen te vergelijken. Falsificatie met behulp van experimentele en econometrische studies blijkt bijna onmogelijk. Op een meer fundamenteel niveau kan men echter de verschillende axioma's die aan economische theorieen ten grondslag liggen, en die gebaseerd zijn op de 'intu'i1 tie' van de onderzoeker, wel aan een kritisch onderzoek onderwerpen. Een bekend voorbeeld van een axioma dat door experimentele studies wordt weerlegd is dat van de transitiviteit. Dit ordeningsprincipe werkt als volgt: als iemand goederenpakket A prefereert boven B en pakket B boven C, dan moet hij ook pakket A prefereren boven C. Als dat laatste niet het geval is spreekt men van intransitiviteit1. Het blijkt voor mensen ondoenlijk een groot aantal verschillende goederenpakketten consistent te rangschikken. Consequenties voor verder economisch onderzoek schijnt dit overigens niet te hebben.