This issue contains four research papers. The issue opens with a research paper on the relevance of small enterprises and entrepreneurship in the development prospects of North Eastern India. The North Eastern Region (NER) of India has had problems with regard to making the most appropriate use of the relatively abundant supply of the natural resources it is endowed with. The Central Government had created the North Eastern Council (NEC) as a special grant disbursement, allocation, and planning body with representatives from all the states of this region. However, arguably, not enough has been achieved in making the best use of the significant literacy and education levels among the youth. Therefore, this paper titled, "Potentials of Village and Small Enterprise Sector in the North Eastern Region of India", by an academician serving this region, S K Mishra, is a very important addition to the existing literature on the region. The author has used very elaborate data to discuss the possibility of using small industrial units in areas like food-processing and handicrafts to bolster growth and development in the region. He has also brought his knowledge of the literature of institutional economics dating back to the remarkable work by Thorstein Veblen. This contribution is considered valuable since it discusses the basic philosophy of economic organization.

The second paper, "R&D and the Persistence of Profits" by two Swedish authors, Johan E Eklund and Daniel Wiberg, carries out a study on the correlation between R&D expenditures of firms and increase in profits as a result of it. This is an interesting study since it has always been an open question as to whether such kind of investments have a payoff in terms of bottom lines and if so, what are the conditions. Although economic theory tells us that profits above the industry norm cannot persist in the absence of significant barriers to entry and exit, evidence continues to accumulate contrary to this supposition. This study adds to the growing literature that emphasizes dynamic analysis while trying to estimate the determinants of firm and industry profits.

The third paper, "On R&D Investment", by Massoud Khazabi, discusses yet another feature of R&D, viz., gains from disclosures of breakthrough research. There is always a trade off in the competitive oligopoly market for more than one reason. It is similar to disclosures by oil exploration firms regarding their finds. On the one hand, the firms can be robbed of a sustained exploitation of the findings by further research. On the other hand, it offers a chance to pitchfork the firm into a higher share value firm globally, with all the related financial benefits in the long run. The paper presents a theoretical model of R&D investment and extensively studies the expensing policy of the development-related costs. By developing an R&D model, the paper demonstrates how different market elements could alter the monopolist's innovation investment and expensing decision-making process.

The final paper, "An Econometric Analysis of Personal Consumption Expenditure in Ethiopia", by Ch. Paramaiah and Oman Amulu Akway, studies the personal consumption expenditure of a strife and famine ridden nation, Ethiopia. This study uses specific data sources to explore the determinants of personal consumption expenditure in Ethiopia, and tries to update the data series by including other explanatory variables. The authors have used variations of models from Keynesian Macroeconomics to study and comment on the nature of factors influencing the consumption expenditure. A backward nation like Ethiopia must be more concerned about avoiding wastage of resources that can occur due to market forces. This study conveys an important message to the governments of all developing nations.

- Syamasundar Tallury
Consulting Editor