Economics Project

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. Economics aims to explain how economies work and how economic agents interact. This section is dedicated to economics project ideas, economics projects for students, final year economics project topics, project list, economics project titles.

Acquisition of electronic commerce capability: the cases of Compaq and Dell in Sweden

Electronic commerce is in a situation of progress and the volume of organizations participating in electronic commerce has risen rapidly during the late 1990s. Consequently, electronic commerce has grown to become a necessary component of industrial daily life. As agencies have battled to implement digital trade there have been achievements and disappointments. Hence there exists a need to boost our perception of how electronic commerce can and should be deployed. In this thesis electronic trade is investigated and mentioned in the case of what agencies need to find out and how they are able to acquire that knowledge in order to are involved in electronic digital trade to remain seated or become very competitive. The target is on the strategy of acquiring new capabilities for electronic trade. Abilities are perceived as high-performance workout routines that can reside within and between firms and confer a firm with a non permanent competitive advantage. These features can be obtained by utilisation of four groups of means: in-house innovation, cloning, collaboration and firm buying. Four hypothesises for understanding and conveying ability acquisition are formulated with regard to … [Read more...]

Facing clutter: on message competition in marketing communications

Texts arising from advertising, promotions, PR, primary promoting, and sales agents abound. We come across all of them on our method to perform, in newspaper publishers and magazines and catalogs, outlets and cafes, if you watch well known sports, watching out of an airplane window, or even while mingling with friends. As a client, it is extremely hard to maintain a record of everything marketers are attempting to inform us.This abundance of selling messages is usually known as clutter. Clutter makes consumers more unlikely to concentrate on marketing messages. Moreover, clutter breeds avoidance behavior and skepticism, that creates buyers more prone to actively resist selling texts. This dissertation sets out to further our understanding of marketing communications and sales communications in a cluttered environment. The thesis comprises five articles in which issues of clutter are empirically investigated.Particularly, conventional wisdoms regarding slogans, mass media choice, and PR they fit to check in many environmentally valid settings than what has been utilized in the past investigation. Contents: Facing clutter: on message competition in marketing … [Read more...]

Markups and Measurement Errors in Six EU Countries

This study of markups, ie prices over marginal costs in manufacturing industries, builds on the work of Robert Hall and Werner Roeger. We analyze several methods used in estimating sectoral markups, and then apply them to empirical analysis of the industrial sectors of six EU countries (Germany, France, Italy, the UK, Sweden and Finland). We argue that measurement errors in the model variables, particularly in the rental price of capital, are likely to be a major problem in markup estimation, and show that due to measurement errors, the approach developed by Roeger is likely to produce markup estimates with an upward bias. Such biased results are particularly deceiving since the outcome tends to produce artificially good fits, high t-values, and markup estimates which are "sensible" in magnitude. We also introduce a "modified" model for markup estimation, which would, if all assumptions were fulfilled and variables correctly measured, yield results identical to those obtained with Roeger's model. Yet, in contrast to Roeger's model, in the presence of measurement errors the markup estimates produced by this model have downward bias. Comparison of these two sets of estimates enables … [Read more...]

Oil and the ‘Dutch Disease': – The Case of the United Arab Emirates

According to the Dutch Disease core model a boom in natural resources will eventually lead to a shift of production between sectors: from tradable goods to non-tradable goods. The authors found it interesting to research if United Arab Emirates has been a subject to any of the effects caused by the disease, due to the oil boom during the 1970s and the huge development that has appeared in the country. If the United Arab Emirates would be a victim of the disease the decline in exports of the natural resource will result in a decline in the non-oil tradable goods which will affect the country negatively. Furthermore, the disease can also make it more difficult for the country to deal with the problem of high inflation. A time series covering the period 1975-2005 is used to analyse if the United Arab Emirates has experienced symptoms of the disease. Results show that the country has experienced some symptoms of the Dutch Disease during the period 1975-198 since changes in the price of oil caused tradables to shift to the non-tradable sector. Another sign of the disease is the high inflation rate Unite Arab Emirates... Contents 1 Introduction 1.1 Purpose 1.2 Outline 2 … [Read more...]

Declining labour share – Evidence of a change in underlying production technology?

The study demonstrates that the decline in the labour share in Finland can not be explained by the Cobb-Douglas production function. Instead, we propose an approach based on the constant-elasticity-of-substitution (CES) production function with labour- and capital-augmenting technical progress. The model is augmented by imperfect competition in the output market. According to the empirical results based on estimation of the first-order-conditions, the technical elasticity of substitution is significantly less than unity (0.6) and hence the Cobb-Douglas production function is rejected. The growth rate of the estimated labour-augmenting technical progress has decreased in recent years, which is not consistent with the ‘new-economy’ hypothesis. Capital-augmenting technical trend has exploded during the same period, which provides a possible explanation for the rapid growth of the Solow residual. The main contributing factor behind the declining labour share is, however, the increasing mark-up. Introduction: According to the so called Kaldor facts, a set of empirical regularities — stylized facts—seem to characterize observed growth processes in several countries despite … [Read more...]

Monetary policy, expected inflation and inflation risk premia

Within a New Keynesian business cycle model, we study variables that are normally unobservable but are very important for the conduct of monetary policy, namely expected inflation and inflation risk premia. We solve the model using a third-order approximation that allows us to study time-varying risk premia. Our model is consistent with rejection of the expectations hypothesis and the business-cycle behaviour of nominal interest rates in US data. We find that inflation risk premia are very small and display little volatility. Hence, monetary policy authorities can use the difference between nominal and real interest rates from index-linked bonds as a proxy for inflation expectations. Moreover, for short maturities current inflation is a good predictor of inflation risk premia. We also find that short-term real interest rates and expected inflation are significantly negatively correlated and that short-term real interest rates display greater volatility than expected inflation. These results are consistent with empirical studies that use survey data and index-linked bonds to obtain measures of expected inflation and real interest rates. Finally, we show that our economy is … [Read more...]

Capital Structure, Wage Bargaining and Employment

We offer a unified framework to analyze the determination of employment, employee effort, wages, profit sharing and capital structure when firms face stochastic revenue shocks. We apply a generalized Nash bargaining solution, which extends the wage bargaining literature by incorporating efficiency wage considerations, profit sharing and capital structure. The profit sharing instrument is demonstrated to have positive effort-augmenting and wage-moderating effects, which exactly offset the negative dilution effect in equilibrium. Leverage is shown to reduce employment and to have a strategic commitment value as a wage-moderating mechanism for firms facing unions in bilateral wage negotiations. Finally, some implications for equilibrium unemployment are discussed. Introduction: In Europe the unemployment rate has shown a rising trend during the last twenty five years. This has raised the question of how to explain this development.Without going explicitly into that issue, which is still partly unresolved, one should notice that at the moment there are at least three important theoretical approaches to study the determination of unemployment, namely efficiency wage theories, search … [Read more...]

The Exchange Rate and Monetary Conditions in the Euro Area

Using information from a variety of sources, including our own estimates from quarterly data for each of the countries over the period 1972–1997, this paper suggests that the exchange rate will play an important role in the transmission of the impact of monetary policy through to the real economy and inflation in the euro area. Although the share of external trade in the euro area's GDP is only around 10 per cent this is only one factor that affects the transmission mechanism and the role of the exchange rate is likely to be substantially greater when all factors are taken into account. As a first approximation it would be reasonable to assume that an increase in the real 90-day interest rate of 100 basis points would have approximately the same effect on demand pressure two years later as a 3.5 per cent fall in the real euro exchange rate. This implies that the euro area will tend to behave like a large open economy rather than a closed economy and hence that it would be helpful in informing monetary policy to construct a Monetary Conditions Index (MCI) using these weights. A separate paper (Mayes and Virén, 1998) suggests how an MCI provides a useful summary of high frequency … [Read more...]

Who’s Driving Wages in Finland? Or Is Anyone?

This study examines wage paths in the Finnish manufacturing using the Johansen method in estimations. The empirical results have the following implications. i) Wage-wage links in the Finnish manufacturing industry have been tight. In a longer perspective, wages in the high-pay branches and low-pay branches have followed a common path. ii) An important characteristic of wage development in high-pay branches has been the tendency to counteract any attempts to improve the relative position of the low-pay branches with additional wage increases. A major part of the adjustment through which earlier wage structures have been restored has taken place within one year. iii) The adjustment process due to wage-wage links seems to have changed since the devaluation of the markka in November 1991. Result (ii) is of great interest for Finland and the other Nordic countries. This is because in Northern Europe wage settlements have been commonly designed to reduce wage differentials. In the Scandinavian literature, these have often been called "solidarity" or "solidaristic" type contracts.The results imply that when wage differentials have been compressed through institutional arrangements, … [Read more...]

Asymmetry and the Problem of Aggregation in the Euro Area

This paper highlights the implications for EU macroeconomic policy at a relatively disaggregated level when key economic relationships are nonlinear or asymmetric. Using data for the EU and OECD countries we show that there are considerable non-linearities and asymmetries in the Phillips and Okun curves. High unemployment has a relatively limited effect in pulling inflation down while low unemployment can be much more effective in driving it up. Downturns in the economy are both more rapid and sustained in driving unemployment up than recoveries are in bringing it down. There is considerable variety in these relationships and in IS curves across not just countries but also sectors and regions. Introduction: The euro area has a single monetary policy for quite a diverse region. The range of that diversity is illustrated in Table 1 for inflation growth and measures of economic structure. While it is widely appreciated that monetary policy is a ‘blunt instrument’ and that what is appropriate for the euro economy as a whole may have adverse effects both for individual sectors and for particular geographical parts of the area, some of the consequences of this for the setting of … [Read more...]

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