Applied Industrial Organization offers a perspective on the richness of empirical industrial organization studies. Some papers derive empirical implications from theoretical models, but other papers start from empirical evidence and construct a theory. Three major topics are explored: the role of innovation, the evolution of market structure and firms, and the determinations of performance. As the central force of market economies, innovation is the essence of competition and results in changes to market structures. Other forces driving the evolution of markets and firms are also analyzed. Finally, the determinants of profitability are investigated. In particular, characteristics such as price flexibility, successful lenders and monopoly regulation are examined. Contributors include F.M. Scherer, Paul Geroski, John Hey, David Audretsch, Manfred Neumann, among others.

7 RZB Niederosterreich Wien, Osterreichische Lotterien, RLB Steiermark, Oester- reichische Nationalbank, Bundesarbeitskammer, and Wirtschaftskammer Osterreich. We thank lise Schulz and Marianne Uitz for editing this volume. REFERENCES Aiginger, K. , The New European Model of the Refonned Welfare State, Stanford University, European Forum Working Paper 2002, (2). Gordon, R. I. , Two Centuries of Economic Growth: Europe Chasing the American Frontier, Paper prepared for the Economic History Workshop, Northwestern University, Chicago, 2002. JOSEPH E. STIGLITZ ECONOMIC POLICY FOR THE 21 ST CENTURY The subject of this lecture is economic policy issues for the 21 st century. This is obviously a very ambitious title and I will only be able to talk on a few selected topics. I th was very pleased with the invitation to come and address this 75 anniversary. First because of the importance that I associate to institutions like the WIFO as part of the democratic processes by which economic policy decisions get made - that is one of the themes that I am going to come back to. Second, of course, because the fact that the WIFO was founded by von Hayek and von Mises makes it a very interesting institution for any economist. The events of the last 75 years could hardly have been anticipated by either von Mises or von Hayek in the 1920s when the institution was founded. Nor I am not sure that they would have anticipated the way the economic science has changed.

7 RZB Niederosterreich Wien, Osterreichische Lotterien, RLB Steiermark, Oester- reichische Nationalbank, Bundesarbeitskammer, and Wirtschaftskammer Osterreich. We thank lise Schulz and Marianne Uitz for editing this volume. REFERENCES Aiginger, K. , The New European Model of the Refonned Welfare State, Stanford University, European Forum Working Paper 2002, (2). Gordon, R. I. , Two Centuries of Economic Growth: Europe Chasing the American Frontier, Paper prepared for the Economic History Workshop, Northwestern University, Chicago, 2002. JOSEPH E. STIGLITZ ECONOMIC POLICY FOR THE 21 ST CENTURY The subject of this lecture is economic policy issues for the 21 st century. This is obviously a very ambitious title and I will only be able to talk on a few selected topics. I th was very pleased with the invitation to come and address this 75 anniversary. First because of the importance that I associate to institutions like the WIFO as part of the democratic processes by which economic policy decisions get made - that is one of the themes that I am going to come back to. Second, of course, because the fact that the WIFO was founded by von Hayek and von Mises makes it a very interesting institution for any economist. The events of the last 75 years could hardly have been anticipated by either von Mises or von Hayek in the 1920s when the institution was founded. Nor I am not sure that they would have anticipated the way the economic science has changed.

Applied Industrial Organization offers a perspective on the richness of empirical industrial organization studies. Some papers derive empirical implications from theoretical models, but other papers start from empirical evidence and construct a theory. Three major topics are explored: the role of innovation, the evolution of market structure and firms, and the determinations of performance. As the central force of market economies, innovation is the essence of competition and results in changes to market structures. Other forces driving the evolution of markets and firms are also analyzed. Finally, the determinants of profitability are investigated. In particular, characteristics such as price flexibility, successful lenders and monopoly regulation are examined. Contributors include F.M. Scherer, Paul Geroski, John Hey, David Audretsch, Manfred Neumann, among others.