A Preview of the New Economics of Knowledge

Martin J. Beckmann^*a
aBrown University and Technical University of Munich

Abstract

Examples of knowledge as a subject for economic analysis are:

1. author and document evaluation by citations
2. joint authorship
3. size of research groups
4. knowledge as an input in production.

The optimal choice of products requiring various items of knowledge is made through an assessment of products for knowledge costs that can meet the Lindahl criterion of accounting.

JEL Classification: D83, A2

Keywords: Citations, joint authorship, research groups, knowledge inputs

Asset Write-offs: An Empirical Investigation of Timeliness

Tae H. Choi^a
aKDI School of Public Policy and Management

Abstract

Anecdotal evidence shows that managers have plenty of discretion to manage the timing of write-offs to take action related to earnings management. In this paper, I examine whether write-offs are recorded in a timely manner. In particular, I investigate the association between asset write-offs and the market return over a long window as a metric of testing the timeliness of write offs. The results suggest that write-offs are recorded in a less timely manner than other components of earnings.

JEL Classification: M40, M41, M49

Keywords: Write-off, aggregate earnings, aggregate return, timeliness of earnings, earnings management

Estimation of the Undervaluation of the Chinese Currency
by a Non-linear Model

Gene Hsin Chang^a
aShanghai University of Finance and Economics and University of Toledo

Abstract

This paper conducts a quantitative estimation for the equilibrium value of the Chinese currency, the RMB, by a non-linear model, after control of the Balassa-Samuelson effect. The model provides a better fit for the valuation of the Chinese currency than the conventional linear or log linear Rogoff models. The model regression is robust. Our regression reveals that the RMB was undervalued by 32% in 2004, but further increased to 35.8% in 2005 because the Balassa- Samuelson effect diminishes as China’s economy surges. These figures suggest that the extent of undervaluation of RMB is more substantial than most previous estimates, which range from 15% to 27.5%. The estimates of the model provide important information about the likely changes in the value of the RMB in the near future.

JEL Classification: F31, C31

Keywords: China, currency value, exchange rate, estimation

On the “Technology Transfer” Paradox and
“Worsening Terms of Trade” Paradox

Hiroshi Ohta^a* and Hironobu Nakagawa^a
aSIPEC, Aoyama Gakuin University

Abstract

This paper revisits some seeming paradoxes or puzzles in trade theory. We explore the socalled “technology transfer” paradox, which may be interpreted more generally in terms of what we call the “worsening terms of trade” paradox. We show both paradoxes are no more paradox than the Leontief paradox is. We also assert that, judging from the implications that international technology transfers have for the possible pattern of trade, the seeming paradoxes that require the pattern-of-trade reversals are less likely to occur under conditions of the Hecksher-Ohlin variable input proportions than under the Ricardian fixed proportions.

JEL Classification: D00, F10, F11

Keywords: technology transfer paradox, terms of trade, pattern-of-trade reversals

China’s Energy and Environmental Problems and Policies

Gregory C. Chow^a*
aPrinceton University

Abstract

This paper describes China’s energy and environmental degradation problems in terms of air pollution, water pollution, CO2 emission and shortage of energy. It discusses the laws, agencies established and policies introduced to solve the energy-environment problems as well as the practical difficulties in the implementation of government environmental policies. Finally it presents two proposals to improve the protection of China’s environment.

JEL Classification: O13, P28, Q5

Keywords: China, energy, environment, pollution, sustainable development