Programme of the fifth annual congress

A

EER-R

Proceedings

682

Fitima Maria Jesus (secretary) Isabel Seraphim (secretary)

GENERAL INFORMATION

Congress Site and Bureau Universidade Nova de Lisboa - Faculdade de Economia Travessa EstZvgo Pinto (Campolide) P-!ooO Lisbon Portugal Forum Picoas Av. Fontes Pereira de Melo - Edificio das Telecomunicacces, 38 C, 40 A P- 1000 Lisbon Portugal Palacio Ventura Terra Rua MarquZs da Fronteira, 20 P-1000 Lisbon Portugal Registration Registration will take place in August 30th and 31st from 9.00 a.m. to 7 p.m. at Universidade Nova de Lisboa - Faculdade de Economia Travessa EstZv5o Pinto (Campolide) P- 1000 Lisbon Telephone: 35 l-l-693624 CongressSecretariat after the Congress

Congress0 EEA 1990 - Universidade Nova de Lisboa - Faculdade de Economia Travessa EstCvao Pinto (Campolide) P-1000 Lisbon Portugal Telephone: 35 1- l-693624 Telefax: 351-l-7161 105 Name badge

Participants and accompanying persons are kindly requested to wear their name badge on all official occasions. Lunch and coffee breaks

Lunch is served at Universidade Nova de Lisboa, Faculdade de Economia. Coffee breaks will be held at the meeting place. Exhibitions

There will be an exhibition of books at Universidade Economia.

Nova de Lisboa, Faculdade de

Distribution of papers

We are sorry not to make each of many papers scheduled for presentation available during

Proceedings

683

the Congress. Some authors will bring copies with them. However, the general procedure for obtaining a copy of a paper is described in the Book of Abstracts. Informationsystem Having in mind that information needs differ widely among people the EEA - Nova Information System was created. It is a user’s friendly system giving Congress information and help to those who want to know what to do or where to go in Lisbon. Terminals are available on the main corridors of Nova. You just have to follow the instructions on the menus. For those short of memory we can print the information you want. EEA - Nova Information System was made possible thanks to Inforgal, S.A. Note The following symbols are used to indicate location of Congress meetings: FORUM NOVA OL PVT PVTl PVT2 Rooms

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= Forum Picoas = Faculdade de Economia Universidade Nova de Lisboa =Old Library of Nova = Palicio Ventura Terra =Room 1 in PVT =Room 2 in PVT = 100-199 - NOVA 1st floor =20&299 - NOVA 2nd floor = 300-399 - NOVA 3rd floor =Students’ Union - Located at Nova

GENERAL T?VETABLE Thursday, M/8 19:oo

Welcome Reception by the City of Lisbon at the Estufa Fria.

Friday, 31/8 9:00-9: 15

Opening Address by Prof. Miguel Beleza, Minister of Finance.

9:15-IO:30

Presidential Address

10:30-l 1:oo

Coffee Break

1l:oo-12:15

Alfred Marshall Lecture

12:15-14:OO

Lunch

14:00-16:OO

Bl-B4, Jl

16:0&16:30

Coffee Break

16:30-18:30

Cl-Cl5

Saturday, l/9 8:30-IO:30 10:30-l 1:oo 1l:oo-13:oo

Cl6430 Coffee Break c31-C45, P2

13:00-14:30

Lunch

Pl

Proceedings

684

14:30-16:30

16:30-17:00 17:30-18:45

BS-B8, P3 Coffee Break Joseph Schumpeter Lecture

Sunday, 219 8:30-9:30 9:3&10:00 lO:OO-12:00

General Assembly Coffee Break B9-B12, P4

12:00-14:OO

Lunch

14:00-16%)

C46-C62

Proceedings

685

PROGRAMME

Thursday, August 30, 1990 !kOW!kOO REGISTRATION

Friday, August 31, 1990 !ko&12:15

FORUM !kO&!klS !k15_1WO

CONGRESS OPENING PRESIDENTIAL

ADDRESS

‘Economists and the Welfare State’, A. Sandmo, Norwegian School of Economics and Business Administration. Chair: Manuel Pinto Barbosa, Vive-Rector, Universidade Nova de Lisboa 119&12:15

ALFRED

MARSHALL

LECTURE

‘Public Policy and the Economics of the Development’, N. Stern, London School of Economics Chair: Thorvaldur Gylfason 1490-16~00 B.1.

PARALLEL

B AND J SESSIONS (INVITED PAPERS)

Nonlinear Business Cyc!w (223)

‘Expectations Driven Business Cycles’, J.-M. Grandmont, CEPREMAP ‘Endogenous Oscillations in Competitive Equilibrium Models’, M. Boldrin, UCLA ‘Statistical Inference Based upon Nonlinear Science’, C.L. Sayers, University of Houston Chair: J.-M. Grandmont, CEPREMAP B.2.

Alfred Marshall in Historical Perspective (OL)

‘Why Marshall Was Right About Ricardo, S. Holland, University of Toronto ‘Marsha!1 and Adam Smith’, D.A. Reisman, University of Surrey ‘Marshall’s Analysis of Economic Behavior with Particular Reference to the Consumer’, A.M. Endres, University of Auckland Chair: S. Hollander, University of Toronto 83.

Poverty and Development (224)

‘The World Development Report 1990’, L. Squire, World Bank ‘The Human Development Report 1990’, M. Desai, London School of Economics ‘The World Development Report 1990 and the Human Development Report 1990: A Critique’, G. Pyatt, University of Warwick. Chair: R. Kanbur, World Bank and University of Warwick

686

Proceedings

B.4. Europe: Trade and Growth After 1992 (ItO) ‘Modelling the External Effects of 1992, A. Smith and A.J. Venables, University of Sussex and University of Southampton ‘Europe: Trade and Growth After 1992’, C.B. Hamilton, University of Stockholm ‘1992 and International Trade: An Overview’, L.A. Winters, University of Wales. Chair: L.A. Winters, University of Wales J.1. National Accounts and Environmental Degradation (VTI) (Jointly sponsored by the European Association of Environmental and Resource Economists) ‘Degradation of Environmental Capital and National Accounting Procedures’, J.M. Hartwick, Queen’s University ‘Green Accounts for U.K. Agriculture and Forestry’, M. Whitby and N. Adger, University of Newcastle ‘National Accounts and Environmental Resources’, K.-G. Miller, Stockholm School of Economics Chair: H. Folmer, Wageningen Agricultural University

16%H&30 PARALLEL C AND P SESSIONS (CONTRIBUTED PAPERS AND INVITED PANEL DISCUSSION C.I. Macroeconomic Problems and Policies in Small Open Economies (120) ‘Debt Dynamics in a Small Open Economy’, N.M. L‘hristodoulakis, The Athens School of Economics and Business Science ‘The Effects of Government Policies in a Macromodel with Multinational Corporations’, T. Moutos, University of Stirling 1 ‘The Terms of Trade, Investment and the Current Account’. R.G. Murphy, Boston College ‘Uncertain Exchange Rate Policies and Interest Rate Determination’ J.R. Sorensen and T.M. Andersen, University of Aarhus ‘The Case for Budgetary Restraint in Portugal: Short-Run and Long-Run Arguments*, J. Braga de Macedo and V. Gaspar, Commission of the European Communities, Brussels). Chair: J. Braga de Macedo C.2. Topics in Macroeconomics (306) ‘A General Equilibrium Model with Endogenous Government Behavior’, E. Drissen and F. van Winden, Tinbergen Institute, Amsterdam ‘Demand and Supply Shocks in Industrial Output’, A. Gavosto and G. Pellegrini, Bank of Italy ‘Dynamics Adjustment in Open Economies’, J. Meckl, University of Konstanz ‘Inflation and the Role of Money Under Discretion and Rules: A New Interpretation’, E. Yashiv, Hebrew University, Jerusalem ‘Structural Shocks and Investment Subsidies in an Overlapping Generations Model with Perfect Foresight’, V. Ginsburgh and H. Sneessens, University of Brussels and University of Louvain Chair: V. Ginsburgh C.3. Money and Monetary Policy (209) ‘On the Role of Monetary Factors in Business Cycle Models’, F.-C. Bagliano and G. Mini, London School of Economics and Political Science and University of Bari, Italy ‘Monetary Policy Reaction Functions and Saving-Investment Correlations: Some Cross-Country Evidence’, E. Koskela and M. Viren, University of Helsinki ‘The Credibility of Monetary Target Announcemenets: An Empirical Evaluation’, A.A. Weber, University of Siegen, Germany

Proceedings

687

‘Finding the Right Nominal Anchor: The Cointegrntion of Money, Credit and Nominal Income in Norway’, J.T. Klovland and G. BBrdsen, Norwegian School of Economics and Business Administration Chair: J.T. Klovland C.4. Corporate Finance ( 117) ‘Bankruptcy, Warranties and the Firm’s Capital Structure’, E. Appelbaum, York University, Ontario ‘A New Beat for the Random Walk?‘, P. Bekx and J.P. van Rossem, Antwerpen ‘Corporate Takeovers and the Complimentarity of Debt and Equity in the Closely-Held Firm’, E. Bergliif, Stockholm School of Economics ‘Financial Innovations as Optimal Investment Banking Contracts: An Agency Approach’, A. Karmann and A. Meyer, University of Hamburg ‘Volatility, Information, and Noise Trading’, S. Moresi and J.-P. Danthine, Boston and University of Lausanne Chair: S. Moresi C.5. Social Security (221) ‘Social Security as Insurance on Human Capital’, L. Levy-Garboua and C. Montmarquette, University of Paris I and University of Montreal ‘Redistributions in the Retirement Public Pension Scheme and Population Trends: The Italian Case’, F.P. Schioppa, LUISS Centro di Studi, Rome ‘Temporary Layoffs and Unemployment Insurance’, T.Q. Sorensen, University of Copenhagen ‘Optimal Path for Social Security in a Changing Environment’, P. Pestieau, R. Boadway and M. Marchand, University of Liege, Queen’s University and University of Louvain ‘Incidence Effects of Proposed Reforms for Employers’ Social Security Contributions in Finnish Manuafacturing’, S. Honkapohja, P. Holm and E. Koskela, University of Helsinki Chair: S. Honkapohja C.6. Wage Bargaining (215) ‘Multifirm Unions and the Incentives to Adopt Pattern Bargaining in an Oligopoly’, P.W. Dobson, University of Nottingham ‘Persistence and Asymmetric Adjustment in Insider-Outsider Models’, F. Huizinga and F. Schiantarelli, Central Planning Bureau, Hague ‘Asymmetric Information, Optimal Labor Contracts and Employment Persistence’, J.F. Jimeno and A. Missale, MIT. ‘Wage Bargaining in Sequential Equilibrium, Deviations from the First Best and Welfare Improving Taxes’, H. Vetter, University of Aarhus ‘Imperfect Competition, Work Practices and Productivity Growth’, J. Haskel, London Businss School Chair: J. Haskel C.7. Empirical Analysis of Unemployment and Wages (208) ‘Long-Term Unemployment and Wage Formation in the Netherlands’, J.J. Graafland, Central Planning Bureau, Hague ‘Sectoral Shocks and Structural Unemployment: An Empirical Analysis’, E. Kazamaki, University of Stockholm ‘Job Duration in the Netherlands: The Simultaneous Occurrence of High and Low Turnover’, M. Lindeboom and J. Theeuwes, University of Leiden

Proceedings

688

‘The Determinants of Wage Changes in Indexed and Non-Indexed Contracts: A Switching Model’, D. Prescott and D. Wilton, University of Guelph and University of Waterloo ‘Mismatch and Internal Migration in Spain, 1962-1986, S. Bentolila and J.J. Dolado, Bank of Spain Chair: J.J. Dolado C.8.

Competition and Mergers (SU)

‘The Incentives for Merger in a Spatial Setting’, D.T. Levy and J.D. Reitzes, University of Baltimore and Federal Trade Commission Oligopsonistic Competition in a Nonsymmetric Heterogenous Bank Deposit Market, G. Oxenstierna, University of Stockholm ‘Managerial Contracts, Collusion and Mergers’, M. Polo and P. Tedeschi, Universiti Bocconi, Italy ‘Competition and Mergers in Airline Networks’, P.T. Spiller and J. Brueckner, University of Illinois *Competition Theory and Competition Policy: A Strategy for Europe’, C.N. Pitelis, University of St. Andrews Chair: C.N. Pitelis C.9.

Economic Theory: Information and Innuvation (119)

‘Are Two Heads Better Than One ?‘, G. Demange, Ecole Polytechnique, Paris ‘Behaviours, Beliefs and Causal Laws - The Example of the Crude Oil Future Market’, J.P. Nicolai and C. Bruneau, Paris ‘Research Spillovers and Strategic Behaviour’, G. Papaconstantinou, OECD ‘Public Firms as Auditing and Regulatory Instruments’, R. Ware and D.A. Garvie, University of Toronto and University of California, Berkeley ‘On the Adoption of Innovations with “Network” Externalities’, L. Cabral, Universidade Nova de Lisboa Chair: L. Cabral C.10.

Pure Game Theory (118)

‘The Algebraic Geometry of Games and the Tracing Procedure’, L.K. Simon, S.H. Schanuel and W.R. Zame, University of California, Berkeley, and StJNY at Buffalo ‘Evolutionary Equilibrium in Market Supergames’, M. Slade and B. Curtis Eaton, G.R.E.Q.E., Marseille and Simon Fraser University ‘The Nash Field’, K. Vogelsberger and K. Ritzberger, Institute for Advanced Studies, Vienna ‘Implementation by Market Games’, L.C. Corchon, Universidad de Alicante, Spain ‘Anti-Nash and an Option for Maximin’, M.J. Holler, Aarhus University Chair: M.J. Holler C.11.

Econometric Theory and Applications (218)

‘Measuring Personal Savings. Consumptions and Disposable Income, in Canada, Since 1962, M.G. Dagenais, Universite de Montreal ‘Consistent Estimation for Linear Regressions with Mismeasurcd Deflators’, T. Erickson, Boston College ‘Market Efficiency at the London Metal Exchange: Fragile Evidence from Cointegration Tests’, H.K. Larsen and P.S. Sephton, University of New Brunswick ‘Testing the Stationary Search Model’, Ch.M. Schmidt, Princeton University ‘Structural Estimation and Stochastic Simulation of Large Models with Undersized Samples*, K.-H. Toedter, Deutsche Bundesbank, Frankfurt Chair: K.-H. Toedter

Proceedings C.12.

689

Consumer Behavior (103)

‘Precautionary Saving - A Panel Study’, M. Kazarosian, Boston College ‘The Irrelevance Proposition in a Monetary Ecunomy with Consumers’ Assets Heterogeneity’, M. Visaggio, University of Essex ‘Modelling Consumers’ Expenditure in the U.K.: A Disposable Funds Approach’, P. Westaway, National Institute of Economic and Social Research, London ‘Self-Deception: An Application of Cognitive Dissonance Theory to the Intertemporal AllGcation of Consumption and to the Effects of Social Security’, M. Esposito, London School of Economics Chair: M. Esposito C.13. Europe’s Single Market (224) ‘The European Merger Wave and 1992: Self-Fulfilling or Self-Defeating Prophecies’, H. van Ees and H. Garretsen, University of Groningen ‘Economic Integration and Labour Flows: The European Single Act and its Consequences*, P.T. Pereira and Jose Pedro Barosa, Universidade Nova de Lisboa ‘Capital Flight and Financial Liberalisation: A Study of 5 European Countries’, E. Tsakalotos and H.D. Gibson, University of Kent ‘Real Effects of the Liberalization of Capital Movements and of Financial Services in Europe 1992, J.-M. Viaene, Erasmus University, Rotterdam ‘Wage Norms and Europe’s Single Market’, F. Abraham, University of Leuven Chair: F. Abraham C.14. Firms and Markets in Eastern Europe and China (223) ‘The Reproduction of Tensions of the Investment Credit Market in Hungary’, M. Lack& Hungarian Academy of Sciences, Budapest ‘Worker’s Enterprises in Price Competition’, M.R. Ser’cl, Bogazici University, Turkey ‘The Reform of the Hungarian Financial System’, I. Szekely, Karl Marx University, Budapest ‘The Role of Enterprise Groups in Chinese Industrial Reform’, C. Wu, Leuven ‘Bonus Sharing in Soviet Economic Reforms’, H. Aage, University of Copenhagen Chair: H. Aage C.15. Economic Development ( 2 16) ‘The Determinants of Developing Countries’ Access to the International Capital Market’, R. Lensink and P.A.G. van Bergeijk, University of Groninken ‘Modelling the Allocation of Australian Bilateral Aid: A Two-Part Sample Selection Approach’, M. McGillivray and E. Oczkowski, Deakin University and Charles Sturt University ‘Structurai Adjustment and Growth in a Highly Indebted Economy: Brazil’, J. Mercenier and M.C. Samapio de Souza, Universiti de Mont&l ‘Import Compression, Investment Determination and Macroeconomic Adjustment: A Macroeconomic Model Relevant for Sub-Saharan Africa’, J. Rattso, University of Trondheim ‘Agricultural Pricing and Public Investment’, D.M. Newbery, Cambridge University Chair: D.M. Newbery P. 1.

Eastern Europe: A Panel Debate (OL)

Organizer: J. Winiecki, Institute of Labor Research, Warszawa

E.E.R. .- S

690

Proceedings

Other participants: . L. Csaba, Institute of Marke! Research, Budapest

H. Leipold, Phillips University, Marburg L. Sire, Center for Research into Communist Economies, London Saturday, September 1, I!l9Oz &3&1Oz~ PARALLEL C SESSIONS (CONTRIBUTED PAPERS) C.16. Interest Rates and Prices in Open Economies ‘Price Determination in Open and Sheltered Industries - Empirical Evidence for Sweden’, Y. Lindh, University of Uppsala ‘The Term Structure of Interest Rate Differentials in a Target Zone: Theory and Swedish Data’, L.E.O. Svensson, University of Stockholm ‘Interest Differentials, Financial Integration and EMS Shadowing: A Note on Portugal with a Comparison to Spain’, P. Torres and J. Braga de Macedo, CEPS, Brussels and Universidade Nova de Lisboa ‘Assessing Long Run Purchasing Power Parity I_%ing Cointegration Analysis: The Case of a Small and Open Economy’, J.-P. Urbeiti and B. Delhausse, University of Liege ‘ECU Interest Rates and ECU Basket Adjustments: An Arbitrage Pricing Approach’, M. Klein and S. Miiller, University of Bonn Chair: M. Klein C.17. Disequilibrium Macroeconomics and Imperfect Competition (218) ‘Involuntary Unemployment, Credit Rationing and Limits to Rent Extraction’, E. Fehr, University of Technology, Vienna ‘Volatility in Distorted Economies - A Microfoundation of Keynesian Ideas’, G. Illing, University of Munich ‘Labour Utilization and Non-Wage Labour Costs in a Disequilibrium Macro Framework’, H. Konig, H. Entorf and W. Pohlmeier, University of Mannheim and Harvard University ‘Liquidity Constraints and the Keynesian Corridor’, A.B. van Schaik and T. van de Klundert, Tilburg University ‘A Macroeconomic Model with Imperfect Competition and Rational Expectations’, J.-P. Benassy, CEPREMAP Chair: J.-P. Benassy C.18 Money and Banking: Country Studies (SU) ‘Dynamic Modelling and the Demand for Narrow Money in Norway’, G. Bardsen, University of Warwick ‘The Demand for Money in the Netherlands Revisited’, M.M.G. Fase and C.C.A. Winder, De Nederlandsche Bank, Amsterdam ‘A Portfolio Model for the Banks’ Liabilities’, U. Miiller, BAK Basle Business Cycle Research Group, Base1 ‘Treasury Bill Rates in the 1970s and 198Os’,J. Peek and P.H. Hendershott, Boston College and Ohio State University ‘Economic Reforms and Integration’, H. Tomann, Free University of Berlin Chair: H. Tomann C.19. Financial Markets and Deregulation (306) ‘The Effect of Financial Liberalization on the Efliciency of the Turkish Financial System: 198088, G. Capoglu, Bilkent University, Ankara ‘Loan Workouts and Commercial Bank Information: Why Banks are Special’, L.I. Nakamura, Federal Reserve Bank of Philadelphia.

Proceedings

691

‘Financial Liberalisation and Foreign Portfolio Investment in the United Kingdom’, N. Pain, National Institute of Economic and Social Research, London ‘Technological Choice, Financial Markets and Economic Development*, G. Saint-Paul, M.I.T. ‘The Macroeconomic Implications of Financial Deregulation’, J. Melitz and C. Bordes, INSEE, Paris Chair: J. Melitz C.20. The Public Sector and Political Economy (223) ‘Wagner’s Law - A Spurious Relationship. 9’, M. Henrekson, Trade Union Institute for Economic Research, Stockholm ‘Testing Economic Theories of Voter Behavior Using Micro-Data*, A. Schram, University of Amsterdam ‘The Political Economy of EC Protectionism - National Protectionism Based on Art. 1115, Treaty of Rome’, L. Schuknecht, University of Konstanz ‘The Shadow Economy: A Micro-Analysis of Black Labour Supply in the FRG - The Influence of Gender, Social Networks and Other Socioeconomic Factors on Black Participation, Hours and Wages’, K. Wolff, Frankfurt ‘The Costs and Benefits of Privatization’. K. Schmidt, University of Bonn Chair: K. Schmidt C.21.

Profit Sharing and Wages (215)

‘Risk Sharing on the Labour Market’, Ch. Gollier and Jacques H. Dreze, Centre HEC-ISA, France ‘Profit Sharing with an Equalization Fund: The Case of Investment and Flexible Wages’, L.H. Pedersen, University of Copenhagen ‘Efficiency Wages, Profit Sharing and Unemployment’, R. Rees, University of Guelph ‘Wage Linkages Between Private and Public Sectors in Sweden’, H. Ohlsson and B. Holmlund, Uppsala University Chair: H. Ohlsson C.22. Labor Supply and the Allocation of Time (221) ‘Allocation of Time Within the Family When the Time Spent Together Matters’, P. Haaparanta, Bank of Finland ‘Allocation of Time: An Empirical Study of the Case of the Portuguese Families’, M.F. Mendes and P.T. Pereira, Universidade de Evora ‘Black Work and Household Production - Informal Family Income Achieving Strategies’, J. Met-z and K. Wolff, Goethe-Universitat, Frankfurt am Main ‘Are Women Overqualified. 7’, G. Renes and G. Ridder, Leiden University ‘Collective Labour Supply and Welfare’, P.A. Chiappori, DELTA, Paris Chair: P.-A. Chiappori C.23.

Oligopoly (208)

‘The Failure of Competition in the Credit Card Market’, L. Ausubel, New York University ‘Natural Oligopoly in Intermediated Markets’, Th. Gehrig, University of Base1 ‘Strategic Behaviour, Market Structure and Exogenous Uncertainty’, F. Torres, F. Pacheco and E. Peree, CEPS, Brussels, Universidade Catolica Portuguesa, Lisboa, and University of Louvarn ‘Decentralized Trade, Communication and Market Structure’, N. Vriend, European University Institute, Florence

Proceedings

692

‘Some Results of Experimental Duopoly Markets with Demand Inertia’, C. Keser, University of Bonn Chair: C. Keser C.24.

Economic

Theory: Contrasts and Et!!ciency (103) ‘Collusion in Incentive Contracts: Does Delegation Help?, L. Felli, MIT. ‘Aggression, Efficiency and Mutual Fund Separation in Incomplete Markets’, P. Gottardi and J.B. Detemple, Cambridge University and Columbia University ‘A Multidimensional, Incentive-compatible Mechanism for Contract Specification and Award’, M.R. Johnson, University of Alabama ‘Ownership Structure and Efficiency: An Incentive Mechanism Approach’, L. Zou, Tilburg University ‘Static Versus Dynamic Efficiency ?: Analysis of a Non-Tournament Mode1 of Technological Competition’, J. Beath and D. Ulph, University of Bristol Chair: J. Beath C.25. The Firm: Adjlrstmentsto Disequilibrium and to the Structure of Property Rights (120) ‘Analysis of Canadian Individual Inventor Behavior’, D.L. Dagenais, Universite de Montreal ‘Buyback Agreements and the Problem of International Contract Enforcement’, Ph.G. King, San Francisco State University ‘Modelling Economic Behaviour in the Informal Urban Retail Sector of Peru’, J.B. Smith and M. Stelcner, York University, Ontario and Concordia University ‘Adjustment Strategies of the Firm in Disequilibrium: An Efftciency Analysis’, J. Windsperger, University of Vienna ‘Nomenklatura, State Monopoly, and Private Enterprise’, G. de Wit and F. van Winden, University of Amsterdam Chair: G. de Wit C.26. Microeconometrics (209) ‘Productivity Growth in Norwegian Banking 1980-1988: A Non-Parametric Frontier Approach’, S.A. Berg, F.R. Forsund and E.S. Jansen, Central Bank of Norway and University of Oslo ‘On the Estimation of a Complete Commodity Demand and Labour Supply System for West Germany - Microeconometric Analysis for with Special Reference to the Testing of Separability of Labour Supply’, H. Kaiser, University of Frankfurt ‘Network Consumption Externalities: The Case of Portuguese Te!,ox Service’, A.P.N. Leite and L.M.B. Cabral, Universidade Nova de Lisboa ‘The Demand for Farmed Salmon: Market Structure and Stability’, KG. Zslvanes and D.J. DeVoretz, University of Bergen and Simon Fraser University ‘Deregulation of Scandinavian Airlines: A Case Study of the Oslo-Stockholm Route’, S.P. Strandenes and V.D. Norman, Norwegian School of Economics and Business Administration Chair: V.D. Norman C.27. tnvestment (119) ‘The Effects of Uncertain Parameter Expectations on the Optima1 Investment of the Firm - Part 2: Unknown Shift Size’, L. Alvarez Jr., University of Turku ‘Investment Behaviour of Dutch Industrial Firms - A Panel - Data Study’, D.P. Broer, F.J. Krapels and G. van Leeuwen, Erasmus University, Ministry of Economic Affairs and Central Bureau of Statistics, Netherlands ‘Inventories and the Short-Run Dynamics of Commodity Prices’, R.S. Pindyck, M.I.T. ‘Stock Market Volatility and Investment: Do Only Fundamentals Matter?‘, F. Schiantarelli and M. Galeotti, Boston University and University of Brescia

Proceedings

693

‘Capital Formation, Risk Taking and Taxation’, K.A. Konrad, University of Munich Chair: K.A. Konrad C.28.

Portugal and Spain (OL)

‘Macroeconomic and Sectoral Determinants of Foreign Direct Investment in Spain: An Empirical Analysis’, 0 R. Bajo, Harvard University ‘Industrial Location and Foreign Investment in the Iberian Peninsula’, C. Corado and A.N. Leite, Universidade Nova de Lisboa *Hysteresis and Sluggishness in Portuguese Unemployment: 1977-1988’, L. Modesto and J.C. das Neves, Universidade Cat6lica Portuguesa, Lisbon) ‘Spain in the EC: The Impact of Trade Liberalization on Selected Industries’, J. Gaul, X. Vives and X. Martinez-Giralt, IESE, Barcelona Chair: J. Gual C.29. Eastern Europe in Transition: Problems and Policies (224) ‘The Post-CPE Market Economy in Poland: Remarks on the Labour Market’, M. Gbra, Central School of Planning and Statistics, Warszawa ‘Shortage, Vertical Integration and Reform in Soviet-Type Economies’, G. Roland, Universitk Libre de Bruxelles ‘Some Basic Issues of the Property Reform in Hungary’, K.A. Sobs, Hungarian Academy of Sciences, Budapest ‘Changes in East Europe: Macroeconomic Policy in the Quasi Market Economics’, H.I. Lerinc, Karl Marx University of Economics, Budapest Chair: H.I. Larinc C.30.

Income Distribution,

Welfare, Justice, and Poverty (118)

‘A Welfare State Approach in Determining the Poverty Line with an Application to Cross Country Comparisons of Poverty’, B. Gustafsson and M. Lindblom, University of Gothenburg ‘The General Theory of Economic Justice’, S.-Ch. Kolm, CERAS-ENPC, Paris ‘For Welfare Prescriptions, Reference Price Independence Implies Price Independence’, F. Laisney and R. Schmachtenberg, University of Mannh ‘m and University of Bonn ‘Welfare Improvement Caused by Changes in Income Distribution, Needs and Labour Supply: A Theoretical and Empirical Investigation’, T. Tachibanaki and Tadashi Yagi. Kyoto University ‘Measurement, Decomposition and Intertemporal Change in Inequality: Greece 1974, 1982’, P. Tsakloglou, University of Bristol Chair: P. Tsakloglou

ll:O0-13:00 PARALLEL % AND P SESSIONS INVITED PANEL DISCUSSION) C.31.

(CONTRIBUTED

PAPERS

AND

Fiscal Policies in Open Economies

‘Crowding out in a Two-Country Overlapping Generations Model’, A. Jaeger and C. Keuschnigg, Institute for Advanced Studies, Vienna and University of Bonn ‘Growth, Budget Deficits and Fiscal Policies in an Overlapping Generations Model’, C. van Marrewijk and J. Verbeek, University of Amsterdam ‘Fiscal Spending Shocks, Real Business Cycles and Stabilization Policies’, A. Paquet and S. Ambler, Universite du Quibec ‘Investment Tax Credit in an Open Economy’, P. Sen and S.J. Turnovsky, University of London and University of Washington

Proceedings

694

‘Saving and Consumption in High Deficit Countries’, G. Nicoletti, OECD Chair: G. Niceoletti C.32. Business Cycles and Growth (224) ‘Risk Aversion, Government Policy, and Growth in a Stochastic Monetary Model’, S. Honkapohja and U. Lempinen, University of Helsinki and Academy of Finland ‘Secured Loan Contracts, Endogenous Credit Rationing and the Business Cycle’, E.S. Maylield, Boston College ‘Transitional Dynamics and Economic Growth in the Neoclassical Model‘, S.T. Rebel0 and R.G. King, Northwestern University ‘Stochastic Trends and Economic Fluctuations in Small Open Economies: The Case of Finland and Sweden’, A. Vredin, E. Mellander and A. Warne, FIEF, Stockholm ‘The Partisan Model of Macroeconomic Cycles: More Theory and Evidence for the United States‘, D.A. Hibbs, Jr., Trade Union Institute for Economic Research. Stockholm Chair: D.A. Hibbs Cc33.

Money and Credit (223)

‘Bank Loans Securitization with Asymmetric Information: A Principal-Agent Solution’, V. Barham and 0. Lefebvre, Namur and Louvain ‘Provision of Credit Under Default Risk: Optimal Credit Market Policies’, C.C. Cabral, Boston College ‘Borrowing Constraints under Secured Loan Contracts’, E.S. Mayfield, Boston College ‘Concerted Lending: Did Large Banks Bear the Burden?‘, M.M. Spiegel, New York University Chair: M.M. Spiegel C34 Banking Regulations (216) ‘Scale-Effects and Unintended Dynamics Arising from Banking Regulations’, G. Gronvik, Central Bank of Norway ‘Money Market Management and the Art of Central Banking’, A.P. Huijser, De Nederlandsche Bank, Amsterdam ‘Rediscount Quotas and the Theory of the Money Supply’, N.K.A. Ltiufer, University of Konstanz ‘Reserve Requirements, Asymmetric Information, Credit Rationing and Screening Costs’, B. Vale, Central Bank of Norway ‘The Imperfections of an Intermediated Credit Market’, M. de Lange, University of Amsterdam Chair: M. de Lange C.35.

Optimal Taxation and the Size of the Public Sector (218)

‘Normative Aspects of Differential, State-Contingent Capital Income Taxation’, V. Christiansen, University of Oslo ‘Optimal Government Debt kinder Distortionary Taxation’, R. Gradus and T. van de Klundert, Tilburg University ‘International Tax Coordination, Economic Integration and Welfare: A Game-Theoretic Framework’, R.F. Owen and H.J. Peters, University -of Limburg ‘Optimal Taxation in Applied General Equilibrium Models Adopting the Armington Assumption’, H. Vennemo, Central Bureau of Statistics, Oslo ‘Government Size and Economic Growth: Some Evidence from a Market Price Approach’, M. Viren and E. Koskela, Bank of Finland and University of Helsinki Chair: E. Koskela

Proceedings

C36.

69s

Unions and Wages (SU)

‘Real Wage Determination in University of Guelph and D

ctive Bargaining

‘Effects of Union Power on Bargaining’, F.X. Hof and E.

Multipliers

Agreements*,

of a Small

L. Christofides

Open

Economy

and A. Oswald, with

Centralized

University of Technology, Vienna ‘Underinsurance and Excess Unemployment in an Economy Where Both the Gove ent and the Trade Unions Care About Unemployed’, Ch. Mulder, Tilburg University Trade Union Objectives and the Cyclical Variability of Wages and Employment: Evidence from the Finnish Manufacturing and Mining Sector, 1960-1987, J. Pehkonen, University of Jyviiskyla, Finland ‘Wage Rises and the Balance o ayments: An Empirical Study of Reaction Lags’, M. Pal Universi’y

of Aarhus

Chair:

M. Paldam

C.37.

Labor Markets (306)

‘A Theory of Unionised, Information’, C. Carraro

Segmented Labour Market with Oligopolistic Firms and Asymmetric and A. Soubeyran, University of Venice and Universiti de Valenciennes

‘Unemployment and Deterioration Hysteresis Implications’, J. Moller,

of Human Capital University of Konstanz

‘Wage Rivalry and Insider-Outsider Relations: Demand’, 0. Risager, Aarhus Universitet ‘On the Prevalence Israel Chair:

of Fixed

Duration

of Labor

Evidence

A Labour for Skilled

Contracts*,

Model

Market and

L. Danziger,

Unskilled

with

Men in

Bar-Ban

Univerity,

L. Danziger

C.38 Topics in Industrial Economics (209) ‘Technological Regimes, Leaming, and Industry Turbulence’, Wissenschaftszentrum Berlin fur Sozialforschung and University ‘Consumer Lock-in with Asymmetric and Business Administration

Information’,

T. Nilssen,

D.B. Audretsch of Baltimore

Norwegian

and

ZJ. Acs,

School of Economics

‘Unobservable Industry Characteristics and the Innovation - Concentration - Advertising Maze: Evidence from an Econometric Study Using Panel Data for Manufacturing Industries in the FRG, 1979-1986’, J. Wagner and J.-M-G. von der Schulenburg, University of Hannover ‘Short and Long-Run Effects of Productivity and Demand Shocks’, H. Zink, University of Bern ‘Can Small University

Barriers

to Entry

Have

Large Effects on Competition?,

Chair:

P. Seabright

C.39.

Economic Theory: Demand and Welfare (103)

‘Necessary and Suflicient sity, Ontario

Conditions

for Weak Lorenz-Domination’,

‘A Characterization of the Lexicographic Egalitarian J. Nieto, Universidad de1 Pais Vasco, Spain

Solution

P. Seabright,

R. Latham, on Economic

‘Second Degree Stochastic Dominance Decisions and Initial Wealth’, D. Thon Bodo Graduate School of Business, Norway and University of Miami

Cambridge

York UniverEnvironments’, and R. Aboudi,

‘Continuity of Demand, and Existence and Robustness of Equilibrium in Infinite-Dimensional Commodity and Price Spaces’, A. Wrobel and A. Horsley, CentER, Tilburg, and London Schotil of Economics ‘Preference Stockholm Chair:

Reversal:

P. Bohm

What

Does the Laboratory

Evidence

Tell Us?‘, P. Bohm, University

of

Proceedings

696 C.40.

Applied Game Theory (117)

‘The Classical Theme of Division of Labor in Nash Effort Games’, Y.J. Lin, University of California, Riverside ‘An Asymmetric Information Game of Persuasive Lobbying’, J. Potters and F. van Winden, University of Amsterdam ‘Non-Cooperative Models of a Simple Voting Situation’, B. Sloth, University of Copenhagen ‘Tariff Games: Sustainability of Free Trade with Variation in Policy Regimes*, A.H. TurunenRed and D.O. Stahl, University of Texas at Austin ‘Wage Setting and Stabilization Policy in a Game with Renegotiation’, Ch. Schultz and J. Drifiii, University of Copenhagen and Tiiburg University Chair: Ch. Schultz C-41. Econometrics of Stock Markets and Expectations (118) ‘Durable Goods and Varying Real Interest Rates’, A. Lusardi, Princeton University ‘An Investigation of Speculative Bubbles as Geometric Shapes in Stock Prices: The Systematic Patterns in Recent Stock Returns: An Analysis of the Efficiency of Stock Markets’, T.J. Mourik, De Nederiandsche Bank, Amsterdam Agreement and Disagreement Between Expectations and Realizations‘, M.-C. Pichery, Universiti de Bourgogue, France ‘A Heteroscedastic Factor Model of Asset Returns and Risk Premia with Time-Varying Volatility: An Application to Sixteen World Stock Markets’, M. King, E. Sentana and S. Wadhwani, London School of Economics Chair: M. King C.42.

Research and Development ( 119)

‘Productivity Growth, Technological Progress and R&D in OECD Industrial Activities’, F. Fecher and S. Pereiman, University of Liege ‘On Market and Socially Optimal R&D and the Degree of Market Competitiveness’, Y. Katsouiacos and D. Uiph, University of Liverpool and University of Bristol ‘Dynamic, Firm-Specific Increasing Returns and Endogenous Growth’, P. Kruseii, Federal Reserve Bank of Minneapolis ‘Market Growth and the Diffusion of Multiproduct Technologies’, L.-H. Roller, T. Kim and M.M. Tombak, INSEAD, France and University of Pennsylvania ‘The R&D Effort and Capital Taxation’, V. Kanniainen and K.P. Hagen, University of Helsinki and Norwegian School of Economics and Business Administration Chair: K.P. Hagen C.43. Economic Growth and Optimal Pollution Control (208) (Jointly sponsored by the European Association of Environmental and Resource Economists) ‘Demand for Durable and Non-Durable Goods, Environmental Policy and Consumer Welfare’, K. Conrad and M. Schroder, University of Mannheim ‘Renewable Resources, Economic Growth, and Pollution’, J. Kuuiivainen and 0. Tahvonen, Finnish Forest Research Institute, Helsinki ‘Behaviour of a Regulated Utility under Environmental Constraints’, A. Xepapadeas, University of Creta ‘Optimal Pollution Control, Irreversibilities and the Value of Future Information’, R. Pethig, University of Siegen ‘An Evaluation of Recent Proposals in Environmental Policy: An Applied General Equilibrium Approach’, K. Conrad and M. Schriider, University of Mannheim Chair: K. Conrad

Proceedings

697

C.44. Socialist Economies: Foreign Trade, Exchange Rates, and International Comparisons (215) ‘Liberalization of Trade in Reformed Centrally Planned Economies: the Case of Hungary*, J. Gics, Institute for Economic and Market Research and Informatics, Budapest ‘The Influence of Market Developments and Government Intervention on Exports in Yugoslav Industry’, R. Ovin, University of Maribor, Yugoslavia ‘Linked Trade Model of the CMEA Countries’, P. Tomczyk, J.W. Goethe University, Frankfurt ‘Mobile Sellers and Oligopoly: An Empirical Analysis of the Foreign Exchange Market in Poland, 1988-1989, W.W. Charemza and G. Norman, University of Leicester Chair: W.W. Charemza C.45. International Trade (221) ‘Market Shares and Barriers in International Trade Under imperfect Competition’, K. Alho, Research Institute of the Finnish Economy ‘Trade Liberalization with Endogenous Market Structure’, T. Hazeldine, University of British Columbia ‘Total Factor Productivity Growth and Export-Led Strategies: Reviewing the Cross-Country Evidence’, A.C. Pinheiro, IPEA/INPES, Rio de Janeiro ‘Comparative Advantage in the Provision of International Transport Services’, A. Vanags, Queen Mary and Westfield College, London ‘Reasons Behind Barter Reconsidered’, G.G. Schulze, Univerity of Konstanz Chair: G.G. Schulze P.2. Europe After 1992 A Panel Debate (OL) Organizer: T. Padoa-Schioppa, Banca d’1talia Other Participants: E. Emerson, Commission of the European Communities, Bruxelles R. Dehousse, European University Institute, Firenze A. Jacquemin, Universiti de Liege K. Shigehara, Bank of Japan R. Portes, CEPR, London

14:~1630 PARALLEL B AND P SESSIONS (INVITED PAPERS AND PANEL DISCUSSION) B.S. Exploitation of Renewable Natural Resources: The Case of Fish (223) ‘From Common Fish to Rights Based Fishing: Fisheries Management and the Evolution of Exclusive Rights to Fish’, R. Hannesson, Norwegian School of Economics and Business Administration ‘Managing a Fluctuating Fishery for the Benefit of the Coastal State: The Squid Fishery Around the Falkland Islands’, J. Beddington, Imperial College of Science, Technology, and Medicine, London ‘Efficient Management of Ocean Fisheries’, R. Arnason, University of Iceland Chair: R. Hannesson, Norwegian School of Economics and Business Administration B.6. European Social Security: Issues and Prospects (120) ‘The Reform of Unemployment Compensation: Choices for East and West’, J. Micklewright, Queen Mary College, London and European University Institute, Firenze ‘Perestrojka in the Dutch Health Care System: A Demonstration Project for Other European Countries’, W. Van de Ven, Erasmus University

Proceedings

698

‘Public Pensions: Choice for the Future’, M. Marchand and P. Pestieau, Universiti Catholique de Louvain, CORE and IAG; and Universiti de Liege and CORE Chair: M. Marchand, Universite Catholique de Louvain. CORE and IAG 87. Towards Monetary Unification of Europe (OL) ‘The Transition to Monetary Union’, A. Giovannini, Columbia University and Ministerio del Tesoro, Roma ‘Nonmonetary Complements to Monetary Unification’, M. Emerson, Commission of the European Communities, Bruxelles ‘Monetary Management in a Monetary Union’, N. Thygesen, University of Copenhagen Chair: N. Thygesen, University of Copenhagen B.8.

Regulatory Reform

‘Regulatory Reform in European Banking’, X. Vives, Universitat Autonoma de Barcelona ‘Structural and Regulatory Reform in European Telecommunications’. J. Muller. Deutsches Institut fur Wirtschaftsforschung, Berlin The U.K. Electricity Supply Industry: An Experiment in Regulatory Reform’, J. Vickers and G. Yarrow, Oxford University Chair: J. Vickers, Oxford University P.3.

Unemployment:

A Panel Debate

Organizer: A. Lindbeck, University of Stockholm Other participants: J. ‘Drize, Universite Catholique de Louvain M. Neumann, University of Bonn S. Nickel, Oxford University 17:.3&l&45 JOSEPH

SCHUMPETER

LECTURE

FORUM ‘Local Justice: How Institutions Allocate Scarce Resources’, J. Elster, University of Oslo and University of Chicago Chair: A. Sandmo, Norwegian School of Economics and Business Administration Sunday, September 2, 1990 8:30-9:30 GENERAL ASSEMBLY OF EEA MEMBERS

Agenda ( 120) 1. Minutes of the Fourth General Assembly 2. Report of the President 3. Report of the Secretary 4. Report of the Treasurer 5. Report of the Managing Editor 6. Report of the President of the Standing Committee for Students’ Affairs 7. Matters Arising 10-112~0O

PARALLEL

B AND

P SESSIONS

(INVITED

DISCUSSION) B.9.

Endogenous Growth (223)

‘Endogenous Growth and Politics’, D. Cohen, CEPREMAP

PAPERS

AND

PANEL

Proceedings

699

‘A Schumpettirian Approach to Growth’, P. Aghion, DELTA ‘Innovation and Growth’, G. Grossman and E. Helpman, Princeton University and Tel Aviv University Chair: E. Helpman, Tel Aviv Univerity B.10. The Effects of Trade Liberalization (224) ‘Problems in Modelling Liberalization Effects’, A. Buckwell, University of London ‘Experiences with Liberalization Policies: The Case of Agriculture’, U. Koester, ChristianAlbrechts-Universitgt, Kiel ‘Experiences with Liberalization Policies: The Case of the Textile Industry*, D. Spinager, Institut fiir Weltwirtschaft, Kiel Chair: U. Koester, Christian-Albrechts-Universitgt, Kiel B.1I. The Structural Transformation of Eastern Europe (VT1) ‘Title to be Announced’, K. Dyba, Prague ‘Economic Reform in Hungary’, D. Newbery, Cambridge University and CEPR ‘The Economic Integration of Germany’, H. Siebett, knstitute fiir Weltwirtschaft, Kiel Chair: R. Portes, Birkbeck College and CEPR B.12. Economics Education and Research in Europe ‘The Dutch Attempt to Evaluate University Research and the Subsequenr Improvement in the Funding of Ph.D. Education and Restructuring bf Research’, A. Kapteyn, Tilburg University ‘The British Debate on Methods of Evaluating Performance of Higher Education Institutes’, J. Flemming, Bank of England ‘Toward Improved Teaching of Economics in High Schools: A Discussion of the Proposals of the Malinvaud Commission’, J. Lesourne, Conservatoire National des Arts et Metiers Chair: J. Waelbroeck, Universitt Libre de Bruxelles P.4. The New Classical Economics: What H:IQ!We Learned? (IX) Organizer: W.H. Branson, Princeton University Other participants: D. Begg, Birkbeck College and CEPR, London D. Cohen, CEPREMAP, Paris F. Giavazzi, University of Bologna M. Helliwig, University of Base1 P. Minford, University of Liverpool

1490-1690

PARALLEL C SESSIONS (CONTRIBUTED PAPERS)

C.46. Capital Mobility, Exchange Rates, and Eflkiency ‘On the Degree of Capital Mobility: An Empirical Analysis of OECD Countries*, S. Amirkhalkhali and A.A. Dar, Saint Mary’s University, Nova Scotia ‘Expectations of Devaluation*, NC. e Barata, Canterbury ‘International Correlations of Asset Markets: Evidence from the U.S. and the U.K.‘, A. Beltratti and R.J. Shiller, University of Turin and Yale University ‘Foreign Exchange Markets: Efficiency and Hierarchy’, M. Boutillier and B. Cabrillac, Bank of France

Proceedings

700

‘The European Monetary System - Does it Achieve its aims?, A.J. Hughes Hallett and A.P.L. Minford, University of Strathclyde and University of Liverpool Chair: A.P.L. Minford CM.

Trade Interdependenceand Business Cycles (216)

Model with a Commercial Banking Sector’, B. Bakker, University of Groningen ‘Trade Interdependence and the International Business Cycle’. F. Canova and H. Dellas, Brown University and University of Maryland ‘The Synchronization of Business Cycles Across European Common-Market Coun:ries’, J.P. Formby, S.C. Norrbin and R. Sakano, University of Alabama ‘A Weld Causal Chain Mode1 of International Output Fluctuations’, Ch.C. Starck, Bank of Finland ‘Crowding Out and the Wealth of Nations’, T. van de Klundert, Tilburg University Chair: T. van de Klundert ‘A Mu&&Fleming

C.48. Monetary Policy and Exchange Rates (224) ‘Monetary Contracting Between Central Banks and the Design of Sustainable Exchange-Rate Zones’, B. Dumas and F. Delgado, University of Pennsylvania ‘Firms Entry and Exit Decisions: Implications of Sunk Costs and Uncertainty for Exchange Rate Arbitrage and Trade Flows’, G. Giovannetti, Rome ‘Big Effects of Small Interventions: The informational Role of Intervention in Exchange Rate Policy’, M.W. Klein, Clark University, U.S.A. ‘Exchange Rates and Oligopoly’, L. Phlips and A. Kirman, European University Institute, Florence ‘Monetary Policy and the Inventory Cycle’, G. Laroque, INSEE, Paris Chair: G. Laroque C.49. Incentives, Supervision, and Contracts (218) ‘Are Managers Indeed Motivated by Their Pay Packages ?, H.G. Barkema, University of Tilburg ‘Subsidization as Exchange: Theory and Case Study’, N.G. Noorderhaven, University of Groningen ‘Incentives and Supervision in Hierarchies’, V. Salas-Fumis, Facultad de Ciencias Economia, Zaragoza ‘The Economic Cost cf Leveraged Buy-Outs: Wage Profiles and Gearing’, S. Szymanski, Centre for Business Strategy, London ‘Monitoring and Morale: Towards a Psycho-Institutional Analysis’, B.S. Frey, Institute for Empirical Economic Research, Zurich Chair: B.S. Frey C.50. Taxation: Incentives, Evasion, and Reform (SU) ‘Tax Reform Within the EC Internal Market: Empirical Analysis with Two Macroeconomic Modelling Approaches’, P. Karadeloglou, P. Capros and G. Mentzas, University of Athens ‘Changing the Tax Base, Savings and Portfolio Allocation’, H. Piekkola, University of Helsinki ‘Investment Incentives and the Effect of Differences in National Tax Systems’, G. Schjelderup, The Norwegian School of Economics and Business Administration ‘Tax Rates, Tax Administration and Income Tax Evasion in Switzerland’, H. Week-Hannemann and W.W. Pommerehne, University of Konstanz and University of the Saarland

Proceedings

701

‘Tax Evasion and Occupation Choice’, P. Pestieau and U.M. Possen, University of J,&ge and Cornell University Chair: P. Pestieau CSI. Wages and Unemployment (306) ‘Employment-reducing Marginal Targeted Wage Subsidies’, K. Albaek, University of Copenhagen ‘Labour Productivity Slowdown and Technical Progress: An Empirical Anaiysis for the Netherlands*, F.A.G. den Butter, Free University, Amsterdam ‘Public and Private Sector Wages in the Netherlands or: The Vital Role of Unobserved Heterogeneity’, J. Hartog and H. Oosterbeek, University of Amsterdam ‘Indexing the Wage Rate on One or Several Periods? An Analysis in Terms of Imperfect Information’, H. Kempf, University of Paris I ‘More Evidence on the Puzzle of Interindustry Wage Differentials: The Case of West Germany’, E. Gundlach and J. Fels, Kiel Institute of World Economics Chair: E. Gundlach C.52. Economics of Information (209) ‘Decentralized and Informationally Efficient Mechanisms Realizing Egalitarian and Pareto Optimal Outcomes in Economies with Public Goods’, J.M. Aizpurua and A. Manresa, Instituto de Analisis Economico, Barcelona and Universitat Autonoma de Barcelona ‘Limited Liability and an Economic Measure of Information ElTiciency’, D. Demougin and D.A. Garvie, University of Toronto and University of California ‘The Strategic Supply of Precision’, B. Sinclair-Desgagne and N. Dierkens, INSEAD, Fontainebleau, France ‘Imperfect Competition, Information Acquisition and Price Adjustment’, M. Hviid and T.M. Andersen, University of Copenhagen and University of Aarhus Chair: T.M. Andersen C.53.

Applied Demand Analysis (193)

‘Tenure Choice and Housing Demand in Finland’, H A. Loikkanen, Statistical Centre of Helsinki ‘Harmonisation of Tobacco and Alcohol Taxes in the EEC and the Welfare of Greek Consumers’, A. Nikolaou, Birkbeck College ‘The Demand for Home Help: A Theoretical Model and the Estimation of a Tobit Model’, T. Theisen, Agder State College, Norway ‘Modelling the Demand for Electricity: Model Choice and Empirical Evidence from Norwegian Household Consumption’, K. Vaage, Haugesund Maritime College, Norway ‘On the Value, Efficiency and Price Elasticity of Do-It-Yourself Production’, S.R. Wunderink, Erasmus University, Rotterdam Chair: S.R. Wunderink C.54. Economic Theory: Games and Oligopoly (117) ‘A Unique Solution to n-Person Sequential Bargaining’, G.B. Asheim, Norwegian School of Economics and Business Administration ‘Sequential Equilibria and Cheap Talk in Infinite Signalling Games’, A. Manelli and K. Iorio, Northwestern University, Illinois and Oakland ‘Dynamic Duopolies with Non-Convex Adjustment Costs’, M. Villas-Boas, Sloan School of Management ‘The Principle of Maximal Product Differentiation’, S. Weber and S. Donnenfeld, York University, Ontario and New York University

Proceedings

702

‘Quality Uncertainty and Price Competition’, I. Grilo and J.J. Gabszewicz, CORE and Louvainla-Neuve Chair: I. irilo C.55.

History and Methodology (OL)

Bertil Ohlin’s Contributions to International Economics’, H. Flam, University of Stockholm ‘The Latin Union (1865-1927) and the Problem of Monetary Unification: What Can We Learn from History.3’, M. Flandreau, London School of Economics ‘The Conservatism of Program Continuity Criticism of Lakatosian Methodology in Economics’, B. Nooteboom, University of Groningen ‘Balanced or Unbalanced Growth in the Industrial Revolution: Britain 17X)-1860’, K.G. Persson, University of Copenhagen ‘Rules Versus Rules Under the Gold Standard’, J. Flanders, Tel Aviv University Chair: J. Flanders C.!%.

Macroeconomic Applications of Econometrics ( 118)

‘Arima Models, The Steady State of Economic Variables and Their Estimation’, A. Espasa and D. Pena, Bank of Spain ‘A Dynamic Specification of an Aids Import Allocation Model’, P.M.C. de Boer, B.J. van Heeswijk and R. Harkema, Erasmus University, Rotterdam ‘Multivariate Cointegration Analysis and the Long-Run Validity of PPP’, P. Kugler and C. Lenz, Volkswirtschaftliches Institut, Bern ‘Solving Nonlinear Rational Expectations Models: A New _Qpproach’, A. Smith, Duke University ‘Testing for Nonlinear Dynamics in Historical Unemployment Series’, T. Stengos and G. A!agosko&, University of Guelph and Birkbeck College Chair: G. Alogoskoufis C57. Pricing (119) ‘On the Welfare Effects of Regulating Price Discrimination’, N.J. Ireland, University of Warwick, U.K. ‘The Anticompetitive Potential of Best Price Clauses’, M. Schnitzer, University of Bonn ‘Equilibrium Price Dispersion with Identical Consumers and Identical Procedures’, G. Stensland and T.E. Olsen, Christian Michelsen Institute, Bergen ‘The Influence of Futures on Spot Price Volatility in a Model for a Storable Commodity’, C. Torricelli, University of Modena, Italy ‘Optimal Leasing with Learning and Commitment’, R. Burguet, Universidad Autonoma de Barcelona Chair: R. Burguet C.58.

Environmental Value and Incentives to Improvement of Environmental Quality (120)

(Jointly sponsored by the European Association of Environmental and Resource Economists) ‘Simultaneous Use of Renewable and Nonrenewable Natural Resources’, J. Aarrestad, University of Bergen ‘Bilateral Fishing Contracts: An Incentive Approach’, M.C. Gallastegui, E. Inarra and I. Macho, University of Pais Vasco, Bilbao ‘The Use of Standards and Prices for Environmental Protection Within a Mixed Economy’, G. Meran, Free University of Berlin ‘A Contingent Valuation Study to Estimate Total Value for Restoration of a Lake in Italy’, G. Signorello, University of Catania

Proceea’ings

‘Environmental Innovation Subsidies and International D. Siniscalco, University of Venice and CEPR Chair: C. Carraro

703

Competition*,

C. Carraro

and

CS9. prices, Shortages, and Inflation in Socialist Economies (208) ‘Queuing and Repressed Inflation Under Central Planning’, I. Bennett, University College of Swansea ‘An Equilibrium Analysis of Mixed Economies’, G.A. Koshevoy, VNIIEPRANT, Moscow *Inflation Model of the Yugoslav Economy’, D. Kracun, University of Maribor, Yugoslavia ‘The Particularities About the Yugoslav Inflation’, E. Zizmond, University of Maribor ‘A Model of Wage Spiral Tragedy Under Repressed Inflation’, M. Rutkowski, London School of Economics Chair: M. Rutkowski

C.60.

International Economic Policy (215)

‘Openness and Trade Orientation: Where Do We Stand?, E. Colombatto, University of Turin ‘Optimal Domestic Export Subsidies in the Presence of Capital Taxation’, I. Henriques and P.A. Sadorsky, Queen’s University ‘Insulating Aggregate Demand from the Real Exchange Rate without the Side-Effects of Target Zones with Fixed Real Exchange Rates’, E. Pikoulakis, University of Hull ‘Uncertainty in Exported-Oriented Industries’, V.M. da Silva Santos, Instituto Superior de Economia, Lisbon ‘Foreign Debt: A Survey on Alternative Explanations in Theoretical Models’, M. Schmid, Universitat der Bundeswehr Hamburg Chair: M. Schmid

C.61. Strategic Behavior (221) ‘Strategic Investment and Timing of Entry: Stackelberg Equilibrium with Rent Dissipation’, S.P. Anderson and M. Engers, University of Virginia ‘Pricing-Schemes and Cournotian Monopolistic Competition’, C. d’Aspremont, R.S. Ferreira and L.-A. Gerard-Varet, CORE and Louvain-la-Neuve ‘Strategic Product Choice and Market Niches’, L.M. Pepall, Queen’s University ‘Competition and Investment in Flexible Technologies’, L.-H. Roller and M.M. Tombak, INSEAD, Paris Chair: L.-H. Roller

C.62. Topics in Microeconomics (VTZ) ‘The Role of Nonprofit Firms under Asymmetric Information about Product Quality’, T. Iversen, University of Oslo ‘On the Uncompensated and Compensated Effects of a Mean Preserving Increase in Risk’, R. Latham, York University, Ontario ‘Nonconvex Costs and the Volatility of Production’, P. Pauly and K.S. Lai, University of Pennsylvania and California State University ‘Why Do Private Agents Rent Seek? Political Economy as a Case in Prisoner’s Dilemma’, A.E. Yeldan and T.L. Roe, Bilkent University, Ankara and University of Minnesota

704

Proceedings

‘Optimal Production of Innovations under Uncertainty’, V. Kanniainen, University of Helsinki Chair: V. Kanniainen ACKNOWLEDGEMENT The Fifth Annual Congress of the European Economic Association has been made possible thanks to: Arthur Andersen, S.A. Banco Comercio e Industria Banco Intemacional de Credit0 Cafes Delta Caixa Geral de Depositos Citibank Digital Inforgal Instituto National de Investigac5o Cientifica Junta National de Investigaclo Cientifica e Tecnologica Lisbon Convention Bureau Secretaria de Estado da Integracgo Europeia Students of NOVA Sumolis TAP Air Portugal Universidade Nova de Lisboa Banco de Portugal