Learning effects (experience curve, progress curves) have long been a topic for management and industrial organization research. Learning effects make today’s average costs depend negatively on past sales. Therefore a small “lead down the experience curve” provides a decisive advantage over rivals, as the management literature points out. Since small historical events can easily topple the market outcome to a monopoly of one of the firms, I suggest incorporating historical asymmetries between firms into the models in order to reflect this lead. In the literature, however, there are oligopoly models that are symmetric from the outset and generate symmetric equilibria (Fudenberg/ Tirole 1983; SmileylRavid 1983; Ghemawatl Spence 1985; Chu 1988). Would the equilibria in these models be drastically upset if small historical asymmetries were introduced?
In analysing structural budget balances, the paper sketches the discretionary budget policy in the Austrian central and general government sector. At the beginning, the institutional factors are introduced which are supposed to account for differences between the budgetary situation of the central and general government, i.e. the constitutional distribution of legislative competency among the levels of the federative state and the conditions of influencing legislation by interest groups on the different federative levels. The methodological section presents the computation of a trend-adjusted structural budget balance-a measure which is eventually used as a basis for calculating various budgetary indicators. The empirical section compares the selected budgetary indicators between the central and general government. The discretionary budget policies at these federative levels are interpreted with respect to stabilising the business cycle and consolidating the budget. Moreover, the breakdown of the structural government expenses into their major components (interest payments, investment, consumption and transfers) are investigated. The concluding section states and discusses the main results.
Answering to a critical comment of an ealier article this reply concerns two aspects of dismissal protection in European countries. First, the various forms of individual and mass dismissals have to be differentiated, further the potential effects of state regulation by labour law and of bargaining by the actors of industrial relations at the local firm level. Second, the specific features of labour contracts, authority relations and bilateral asymmetric information structures should not be ignored.
This paper develops an efficiency criterion to evaluate environmental policy instruments in a spatial economy. We call an environmental policy regime at the regional level efficient if it guarantees not only an efficient distribution of emission permits within a region, but also an optimal distribution of mobile firms across the regions of a federation. Hence, an efficient instrument must guarantee that firms internalize environmental costs in choosing their location. Using marketable pollution rights or emission taxes, efficiency in this broad sense can only be achieved if revenues of regional environmental agencies are not transferred to regional firms. Direct controls neither support an optimal distribution of emission rights within a region nor an optimal locational pattern of firms.
Politics and administration claim a source of economic arguments (technological progress, competition ability, innovations, spin-offs, science etc.). Actually, this is the mainstream of German industrial policy. But the analysis shows, non of the arguments, except government spendings for space science, is acceptable. The interventionistic comprehension of technological progress leads to dangerous and false conclusions. False, because the variety of different paths of self-organizing technological evolution is artificially reduced. Dangerous, because, the missing success of a wrong diagnosis must be covered with more and more drugs (taxpayers money). So the reality of space programs shows the growing evidence of the political economy in Germany.
