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Rare earth elements govern today's high-tech world and are deemed to be essential for the attainment of sustainable development goals. Since the 1990s, these elements have been predominantly supplied by one single actor, China. However, due to the increasing relevance of their availability, the United States, who imports 80% of its rare earths from China, recently announced its plan to (re-)enter the rare earths supply market. This paper analyzes the strategic interactions among these two countries in open-loop and Markovian strategy spaces. Particular interest is devoted to the impact of heterogeneous supply concepts on (1) the theoretical optimal timing for the United States (U.S.) to enter the non-renewable resource market; (2) China's optimal supply reaction to the U.S.' entry announcement; (3) the central planner outcome; and (4) the profitability of the suppliers' extraction behavior. By setting up a continuous-time differential game model, we show that in the absence of arbitrage opportunity, (1) the U.S. should always postpone the production launch until its rare earths reserves coincide with those of China; (2) China's monopolistic supply is not shaped by the selected strategy; (3) while the duopolistic Markovian behavior is initially more lucrative than open-loop commitment, the opposite situation emerges as the competition proceeds; and (4) on balance, both countries are financially better off when committing to an open-loop supply path. [ABSTRACT FROM AUTHOR]

With capital‐skill complementarity, the secular decline in the price of capital equipment due to equipment‐specific technological progress (ESTP) keeps pushing up the demand for skilled relative to unskilled labor and raising the skill premium. This paper quantitatively characterizes the dynamics of optimal taxation in response. Two main results emerge, regardless of whether the Ramsey (1927) or the Mirrlees (1971) approach is adopted. First, a tax on capital equipment corrects the "pecuniary externalities" caused by ESTP. The correction prescribes a downward or an upward adjustment of tax rates over time, depending on whether ESTP takes place at an accelerated or a decelerated pace. Second, both Ramsey and Mirrlees approaches prescribe an increasing marginal tax rate on labor income over time. Interestingly, we find that the prescribed pattern of optimal taxation resembles the empirical decline in capital taxes and the increase in labor taxes observed in the United States. In particular, despite the significant rise in the skill premium, the welfare gains of tax reform toward optimal Ramsey taxes are modest and small. [ABSTRACT FROM AUTHOR]

Regulatory reform enacted (e.g., the Dodd-Frank Act enforced in the U.S.) requires the financial service industry to consider the "reasonably expected near term demand" (i.e., RENTD) in trading. To manage the price impact and transaction cost associated with orders submitted to an order driven market, market makers or specialists must determine their trading styles (aggressive, neutral, or passive) based on the market liquidity in response to RENTD, particularly for trading a large quantity of some financial instrument. In this article we introduce a model considering different trading styles to satisfy the predictive near-term customer demand of market liquidity in order to find an optimal order submission strategy based on different market situations. We show some analytical properties and numerical performances of our model in search of optimal solutions. We evaluate the performances of our model with simulations run over a set of experiments in comparison with two alternative strategies. Our results suggest that the proposed model illustrates superiority in performance. [ABSTRACT FROM AUTHOR]

This paper analyzes fiscal and monetary policy in a wavelet-based model under stochastic and mixed minimax robust optimal control. A state-space model is constructed after applying the Maximal Overlap Discrete Wavelet Transform to U.S. quarterly real GDP data. We derive the theoretical framework for the linear–quadratic Gaussian (LQG) design and the mixed design where the disturbances in a subset of frequency ranges are stochastic, and the other disturbances are modeled by a multiple-parameter minimax worst-case robust design. We then use the model to jointly simulate optimal fiscal and monetary policy to "stress test" the policies under the worst-case design. The results show that, compared to a deterministic design, the LQG framework introduces considerable variability into aggregate investment. Under active fiscal stabilization with restricted monetary policy, the minimax structure induces more aggressive fiscal spending, slightly larger aggregate consumption, and substantially lower aggregate investment compared to the LQG design. Thus, pursuing a minimax worst-case model induces larger government deficits and stifles long-term capital accumulation. Under active monetary stabilization with restricted fiscal policy, the simulations predict that both consumption and investment will be far less in the minimax design than in the stochastic design. This research is the first to integrate robust control and dynamic game theory with wavelet decomposition. [ABSTRACT FROM AUTHOR]

The cost Malmquist productivity index (CMPI) has been proposed to capture the performance change of cost minimizing Decision Making Units (DMUs). Recently, two alternative uses of the CMPI have been suggested: (1) using the CMPI to compare groups of DMUs, and (2) using the CMPI to compare DMUs for each output separately. In this paper, we propose a new CMPI that combines both procedures. The resulting methodology provides group-specific indexes for each output separately, and therefore offers the option to identify the sources of cost performance change. We also define our index when input prices are not observed and establish, in that case, a duality with a new technical productivity index, which takes the form of a Malmquist productivity index. We illustrate our new methodology with a numerical example and an application to the US electricity plant districts. [ABSTRACT FROM AUTHOR]

The present paper studies the land use change impacts of fuels and biofuels. We test the theoretical hypothesis, which says that changes in fuel prices cause changes in land use both directly and indirectly and that, because of price inter-dependencies, biofuels reinforce the land use change impacts. We apply time-series analytical mechanisms to five major traded agricultural commodities, the cultivated area of agricultural land and crude oil price. Our data consists of yearly observations extending from 1950 to 2007 for the US. The empirical findings confirm that markets for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1dollar/barrel increases land use between 54,000 and 68,000ha. We also find that the increase of bioenergy sector accelerates land use change in the US, i.e. food commodities are being substituted for bioenergy crops. [Copyright &y& Elsevier]

In this paper, we investigate the effect of bank size differences on cost efficiency heterogeneity using a heteroskedastic stochastic frontier model. This model is implemented by using an information theoretic maximum entropy approach. We explicitly model both bank size and variance heterogeneity simultaneously. We find that non-performing loans, federal insurance premium, legal expenses and director fees drive bank inefficiency as the bank becomes larger. Moral hazard, bank management and a 'too big to fail' doctrine are likely explanations for the results from this study. [ABSTRACT FROM AUTHOR]

We prove that, under very weak conditions, optimal financial products on complete markets are co-monotone with the reversed state price density. Optimality is meant in the sense of the maximization of an arbitrary preference model, e.g., expected utility theory or prospect theory. The proof is based on a result from transport theory. We apply the general result to specific situations, in particular the case of a market described by the Capital Asset Pricing Model or the Black-Scholes model, where we derive a generalization of the two-fund-separation theorem and give an extension to APT factor models and structured products with several underlyings. We use our results to derive a new approach to optimization in wealth management, based on a direct optimization of the return distribution of the portfolio. In particular, we show that optimal products can (essentially) be written as monotonic functions of the market return. We provide existence and nonexistence results for optimal products in this framework. Finally we apply our results to the study of bonus certificates, show that they are not optimal, and construct a cheaper product yielding the same return distribution. [ABSTRACT FROM AUTHOR]

A major problem in developing interregional–interindustry models, including multiregional input–output (MRIO) models, is how to combine seemingly incompatible databases. This research aims to estimate state-to-state commodity trade flow tables by major industrial sectors for the US useful for creating an MRIO-type model, the National Interstate Economic Model (NIEMO). The model is based on IMPLAN and related data for 2001. Constructing NIEMO was challenging because of the limited availability of commodity freight shipment data between the states. This helps to explain why a Chenery-Moses-type model such as NIEMO has not been developed in recent years. Two basic sets are necessary to construct NIEMO. Interregional trade tables to estimate trade coefficients by states and industry had been available from the US Commodity Transportation Survey Data since 1977, but reporting was discontinued for some years. For the years since 1993, this data deficit can be met to some extent with the recent Commodity Flow Survey (CFS) data from the Bureau of Transportation Statistics (BTS). Available since 1993, the CFS data are widely used, but they have several inherent problems. Recent attempts to estimate interregional trade flows using data from the 1997 CFS, based on IMPLAN data made this clear to us. This study suggests a new approach to estimate the trade tables between all 50 states plus D.C. and the rest of the world. These tables are assembled via a two-step method, to adjust for incomplete reported trade flows, and to update the adjusted trade flows by estimating values via a Fratar Model based on the 1997 CFS data. Reconciliation of the IMPLAN and CFS databases presents various problems that are addressed in this paper. [ABSTRACT FROM AUTHOR]

The assumption of full proportionality is incorporated in the constant returns-to-scale (CRS) technology and allows for proportional scaling of inputs and outputs of production units. The assumption of selective proportionality was recently incorporated in the hybrid returns-to-scale (HRS) technology in which only a subset of outputs is proportional to a subset of inputs. In this paper we develop a production technology that exhibits both the full and selective proportionality at the same time. Real examples of such technology are pointed out. Subject to certain conditions, the DEA models based on this technology provide better discrimination than the CRS and HRS models. [ABSTRACT FROM AUTHOR]

This paper measures energy efficiency improvements of US single-family homes between 1997 and 2001 using a two-stage procedure. In the first stage, an indicator of energy efficiency is derived by means of Data Envelopment Analysis (DEA), and the analogy between the DEA estimator and traditional measures of energy efficiency is demonstrated. The second stage employs a bootstrapped truncated regression technique to decompose the variation in the obtained efficiency estimates into a climatic component and factors attributed to efficiency improvements. Results indicate a small but significant improvement of energy efficiency over the studied time interval, mainly accounted for by fuel oil and natural gas users. [ABSTRACT FROM AUTHOR]

Abstract: This paper investigates whether the neoclassical growth framework augmented with least squares estimated heuristic rules may reproduce U.S. business cycles. I consider various assumptions about the length of the information set, the influence of contemporaneous data on current forecasts, and the limit case in which learning is completed. Calibrated to the U.S. economy, this model may generate endogenous business cycles that do not exist under perfect foresight. If random productivity shocks are introduced, then the model is more volatile than under rational expectations or constant gain learning and reproduces some key U.S. business cycles stylized facts. [Copyright &y& Elsevier]

We examine the division of labor within households and marital matching patterns in the USA using both the Current Population Survey (CPS) and the National Longitudinal Survey of Youth (NLSY). We use Becker’s theory of marriage markets by estimating household production functions and using the estimates to test for positive or negative assortive matching. We also construct match matrices, which are used to judge how well our model fits Becker’s theory. We find positive assortative matching on all traits in young marriages and couples without children, and negative assortment along some traits in marriages with children. This suggests that children induce specialization whereas couples without children exploit household public goods. [ABSTRACT FROM AUTHOR]

We propose a method for mutual fund performance measurement and best-practice benchmarking, which endogenously identifies a dominating benchmark portfolio for each evaluated mutual fund. Dominating benchmarks provide information about efficiency improvement potential as well as portfolio strategies for achieving them. Portfolio diversification possibilities are accounts for by using Data Envelopment Analysis (DEA). Portfolio risk is accounted for in terms of the full return distribution by utilizing Stochastic Dominance (SD) criteria. The approach is illustrated by an application to US based environmentally responsible mutual funds. [ABSTRACT FROM AUTHOR]

Abstract: We measure productivity in leading edge economic research by using data envelopment analysis (DEA) for a sample of 21 countries belonging to the Organization for Economic Cooperation and Development (OECD). Publications in ten top journals of economics from 1980 to 1998 are taken as the research output. Inputs are measured by R&D expenditure, the number of universities with economics departments and (as an uncontrollable variable) population. Under constant returns-to-scale, the US emerges as the only efficient country. Under variable returns-to-scale, the efficiency frontier is defined by the US, Ireland and New Zealand. With the exception of the US, all countries in our sample display increasing returns-to-scale, and thus have the potential to raise their efficiency by scaling up their research activities. [Copyright &y& Elsevier]

Abstract: We use the directional output distance function to derive estimates of production inefficiency, shadow prices for polluting outputs, and the associated pollution costs. Using a quadratic functional form for the directional output distance function and data for the U.S. agricultural sector during 1960–1996, we find that the pollution costs (the shadow values) from the runoff and leaching of pesticides are 6% of crop and animal revenues and are highest in the Midwest and lowest in the Western states. If states were to reduce technical inefficiency and operate on the production frontier, pollution costs could be reduced by 7%. [Copyright &y& Elsevier]

We study a dynamic regulation model where firms’ actions contribute to a stock externality. The regulator and firms have asymmetric information about serially correlated abatement costs. With price-based policies such as taxes, or if firms trade quotas efficiently, the regulator learns about the evolution of both the stock and costs. This ability to learn about costs is important in determining the ranking of taxes and quotas, and in determining the value of a feedback rather than an open-loop policy. For a range of parameter values commonly used in global warming studies, taxes dominate quotas, regardless of whether the regulator uses an open-loop or a feedback policy, and regardless of the extent of cost correlation. [ABSTRACT FROM AUTHOR]

Aim: To compare the cost of biweekly regimens of first-line (1L) treatments of cetuximab-folinic acid, fluorouracil, and irinotecan (FOLFIRI) versus panitumumab-folinic acid, fluorouracil, and oxaliplatin (FOLFOX) in patients with Kirsten's rat sarcoma wild type (KRAS WT) metastatic colorectal cancer (mCRC) in the United States, across varying weights and body surface areas (BSAs)., Materials and Methods: Cost-minimization analysis (CMA) was performed to estimate per-patient cost differences of cetuximab-FOLFIRI versus panitumumab-FOLFOX. The CMA estimated the costs of RAS testing, premedication, drug acquisition, treating infusion reactions (IRs), supportive therapy, and biweekly administration of chemotherapy, cetuximab (500 mg/m 2 ), and panitumumab (6 mg/kg) over 43 weeks (median progression-free survival). To calculate dose and cost, weight and height data were gathered from an electronic health record-derived de-identified database ( n  = 7,669; January 2013-October 2020). Base case analysis utilized mean weight/BSA of the overall cohort (82.04 kg/1.92 m 2 ), and alternate scenarios were based on 88.18 kg/2.03 m 2 (men, n  = 4,477) and 73.43 kg/1.76 m 2 (women, n  = 3,192)., Results: For the base case, total treatment costs were $167,853 for cetuximab-FOLFIRI and $168,254 for panitumumab-FOLFOX; cost savings per patient receiving cetuximab-FOLFIRI was $400. Cost savings in alternate scenarios (men, $15,138; women, $15,004) resulted from lower drug acquisition costs for cetuximab (men, $14,833; women $14,854) and administration cost ($440) versus panitumumab. Cost savings of cetuximab-FOLFIRI in treating IR ($353) were similar across all scenarios., Limitations: With no head-to-head clinical trial data in the 1L setting, assumptions of similarity in efficacy and safety of cetuximab versus panitumumab were based on published network meta-analysis and the ASPECCT trial. This model did not consider a lifetime horizon. Costs of managing all adverse events (except IR) were not included., Conclusions: Biweekly cetuximab-FOLFIRI offers cost savings compared with panitumumab-FOLFOX for 1L therapy of patients with KRAS WT mCRC in the United States. These cost differences were observed for the overall population and across different BSA and weights for men and women.

This article focuses on a research on the division of labor within households and marital matching patterns in the U.S. Data from the National Longitudinal Survey of Youth and the Current Population Survey were used in the study. It uses an empirical approach based on the theory of efficient marriage markets. Parameter estimation was used to estimate household production functions for the married couple and to test for assortative matching. The study found negative assortative matching on all traits. The study suggests that specialization is induced by children.