information asymmetries between manufacturers and users. We conclude that, compared to a counterfactual world without such innovation, social welfare is most likely to be increased by the presence of user innovation. We suggest some implications for policy makers and managers.

2001 Paper: net.doc Trade and Welfare Implications of Networks

Abstract: This paper investigates the welfare implications of an existence of a free trade agreement (FTA) and a customs union (CU) within the GATT. Two types of GATT regimes are considered in a completely symmetric world: a pure GATT regime without any type of the regional trade agreements (RTAs

Innovation by users is now understood to be an important part of innovative activity in the economy. In this paper we explore the implications of adding innovation by users to existing models of social welfare that currently assume innovation by manufacturers only. We find this addition removes

’ profits and overall welfare, and may drive rivals from the

This paper derives a model in which workers have firm-specific and industry-specific skills, and in each period there is a non-zero probability that a worker quits. The quitting probability makes the private discount rate (used by firms in making decisions about firing workers) higher than the social discount rate. This generates a “quitting externality”, where firms lay off too many workers in a recession. Firms are too quick to dispose of their human capital in a cyclical downturn because it is of less value to them than it is to society. This may provide a rationale for state-mandated redundancy payments as a second-best remedy to overcome the market failure.

The usual conclusion in the literature is that sunspots reduce welfare because of the agents ’ risk aversion. However, if sunspots can lead to escape from an inferior steady state (poverty trap), this conclusion does not necessarily hold. Escaping trajectories can have much higher welfare than

Bank of Canada working papers are theoretical or empirical works-in-progress on subjects in economics and finance. The views expressed in this paper are those of the authors. No responsibility for them should be attributed to the Bank of Canada.

Thoracic compression is the application of pressure to an animal’s chest to prevent respiration and/or cardiac movements to cause death. This technique is used in some field research settings to terminate the life of small wildlife (birds and mammals). WHY IS IT USED? Thoracic compression is presented as technically easy to use, rapid and painless by proponents. The advantages of thoracic compression are that it requires no equipment or materials and allows the researcher to collect specimens with undamaged skin and potentially intact bones; tissues or fluid samples that are potentially unaltered; and/or intact archival samples of wildlife for morphologic and other studies. THE ISSUE The exact cause of death as resulting from thoracic compression has not been demonstrated, which is a key datum for assessing the degree of pain and/or distress experienced by the animal. It is widely believed that death is a direct result of cessation of breathing, specifically asphyxia leading to hypoxia (a.k.a. suffocation, compressive asphyxia, traumatic asphyxia). As a result, critics of the method conclude that animals undergoing it experience a period of pain and distress.

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