Vol. 17, No. 2

Petri Rouvinen:
Is Technology Policy Practised as It Is Preached (pp. 51–62)

The second Finnish Community Innovation Survey is used to study whether the technology policy practice was consistent with the official rhetoric in the mid 1990s. Findings suggest that a firmʼs likelihood of receiving public R&D support increases with outside collaboration, the ability to benefit from inward spillovers, and R&D-intensity. There is some indication that the likelihood also increases with size and employeesʼ formal education. It is confirmed that Tekes promotes cooperation and networking, conducts its mission selectively, and facilitates the exchange of knowledge. It is, however, not found that it would particularly focus on small and medium-sized enterprises or new firms.

(JEL: O31, O32, O38, L29)

Hannu Koskinen:
Modelling of Structural Changes in Demand for Money Cointegration Relations (pp. 63–72)

In this paper the multivariate cointegration technique coupled with a smooth nonlinear trend of time is applied to model the demand for money. Unmodelled gradual structural changes in the cointegration parameters affect the specification of the cointegration relations so that the number of cointegrating vectors found by linear methodology is smaller than suggested by the economic theory. Here the demand for broad money in Finland during 1980–1996 is analysed. It turns out that, if the cointegrated VAR model is extended with a suitable nonlinear deterministic trend of time related to the intercept term, then the missing cointegration relation between broad money and the scale variable is found and the cointegration space can then be identified.

(JEL: C32, C51, E41)

Andreas Bergh:
On the Redistributive Effect of Upper Benefit Limits in Bismarckian Social Insurance (pp. 73–78)

This paper examines the redistributive effect of upper benefit limits (“ceilings”) in short term Bismarckian social insurance. Using data describing the Swedish sickness benefit we show that ceilings create a small redistribution at fairly high costs in terms of total utility and political sustainability. The simulation suggests that social insurance schemes with ceilings are politically more vulnerable to competition from private insurance markets than social insurance where the same amount of redistribution is produced by progressive taxes or higher universal benefits.

(JEL: H53, I38)

Klaus Kultti and Juha Virrankoski:
Equivalence of Auctions and Posted Prices with Many Sellers in a Location (pp. 79–89)

We consider an economy with symmetric buyers and symmetric sellers. Sellers are in locations and post prices, and buyers observe the prices and visit one location per period. If there are several sellers in a location, a uniform price is not a Nash equilibrium. We derive a pricing scheme with a non-degenerate distribution of prices that is utilitywise the same as auction.

(JEL: C78, D40, D83)

Finnish Economic Papers 2/2004