does trade liberalization narrow the gender wage gap the role of sectoral mobility abstract this paper analyzes the impact of import competition and dynamic labor adjustment on gender outcomes in wages and welfare in the u s i consider a dynamic model of sectoral choice and structurally estimate mobility costs using data from the current population survey and o net a measure of intersectoral distance in task characteristics facilitates the structural estimation of switching costs that vary by gender and across sectors in a set of trade shock simulations an import competition shock in the manufacturing sector disproportionately affects male employment and wages since manufacturing is male labor intensive and men face higher exit costs from manufacturing wage and welfare gains from trade are higher for women than men

cartel stability when costs are heterogeneous abstract this paper addresses a neglected question in the literature of cartel stability and the use of trigger strategies to maintain such stability we employ a model in which market demand is linear and involving n firms each operating subject to one of possibly n different cost functions we show that the stability of the cartel may depend crucially upon the relative efficiencies of the firms and argue that in such models explicit attention must be given to this possibility

combining cartel penalties and private damage actions the impact on cartel prices abstract in many countries antitrust enforcement by competition authorities through prosecution and the imposition of penalties is complemented in price fixing cases by private damage actions which should affect both cartel deterrence and the prices set by those cartels that do form we show that the impact of combining penalties and damages on cartel prices is not clearcut and depends on both the nature of the penalty regime and the way that damages are calculated we demonstrate this by focusing on two ways of calculating damages that have been advocated in practice and two different forms of the widely used revenue based penalty regime when the simple form of revenue based penalties is in force the standard method of calculating damages worsens its harmful pricing effects whereas the proposed alternative method of calculating damages can overturn them when a more sophisticated form of revenue based penalties is in operation imposing damages will improve its beneficial pricing effects under both methods of damage calculation but the alternative method is more effective in all cases combining penalties and damages improves deterrence

adjustment trade policy and investment slumps evidence from africa abstract this paper presents a model of investment in six african economies over the 1970s and 80s paying particular attention to the impact of the policy reforms which have accompanied structural adjustment programmes a priori the impact of trade reform on investment can be positive or negative in practise there is some evidence that it might be negative

a differentiated good model of coffee and cocoa exports with reference to the cfa franc zone this paper employs the trade shares methodology to estimate export functions for coffee and cocoa classified according to the market in which they are sold because two of the major coffee and cocoa exporting nations belong to the cfa franc zone we investigate the impact of zone membership on export flows for these two commodities our results confirm the theoretical predictions that relative prices and market size are important determinants of exports moreover participation in the zone has on the whole been beneficial to the exports of its members finally our study contributes to the literature on the impact of exchange rate variability on trade flows it demonstrates that exchange risk depressed the volume of coffee and cocoa exports displaying a more pronounced impact on zone member exports

managing commodity booms in botswana abstract many countries have experienced difficulties managing commodity export booms botswana has been an exception by adopting appropriate macroeconomic policies in response to variable diamond receipts botswana has avoided balance of payments crises and associated adjustment costs the policies adopted have included avoiding excessive increases in government expenditure during boom periods instead building up international reserves and government balances at the central bank to be used when the boom ended in addition through management of the nominal exchange rate real exchange rate appreciation has been avoided the benefits of the policies adopted as well as their opportunity costs are discussed

participating in african monetary unions an alternative evaluation abstract this paper complementary to that of devarajan and de melo deals with the development strategies and performances of 12 franc zone african countries 11 of them gathered in two monetary unions during 1960 1981 beside the actual rate of growth the relative growth performance is considered this performance measured as a residual of a regression on exogenous factors factors independent of economic policy appears to be close to the average performance of other developing countries and better than that of other african countries the results are explained by the direct influence of the foreign exchange regime of the zone and by its impact on economic policy economic policies of individual countries show however some substantial degree of autonomy

macroeconomics financial variables and computable general equilibrium models abstract this paper surveys micro macro computable general equilibrium cge models that incorporate asset markets and product and factor markets recent models are designed to analyze the impact on economic performance and the distribution of income in developing economies of structural adjustment and stabilization programs implemented in response to macro shocks these financial cge models add a loanable funds market incorporating a variety of assets to a cge model that already incorporates flow equilibria in product and factor markets these financial models start from tradefocused cge models and also draw on earlier work with micro and macrostructuralist models in specifying the interactions between financial variables and the real side of the economy the paper also compares these models to dynamic macro models both short run adaptive models with lagged adjustment mechanisms and longer run forward looking models the paper discusses the theoretical problems such models face in reconciling micro focused cge models with macro models incorporating dynamic behavior

comparative advantage learning and sectoral wage determination we develop a model in which a worker s skills determine the worker s current wage and sector the market and the worker are initially uncertain about some of the worker s skills endogenous wage changes and sector mobility occur as labor market participants learn about these unobserved skills we show how the model can be estimated using nonlinear instrumental variables techniques we apply our methodology to study wages and allocation of workers across occupations and industries using individual level panel data from the national longitudinal survey of youth we find that high wage sectors employ high skill workers and offer high returns to workers skills

oil depletion and development in cameroon a critical appraisal of the permanent income hypothesis this paper focuses on medium term policy options in the economic context of natural resource depletion in particular a novel approach for analyzing the impact of the permanent income hypothesis pih with a dynamic recursive computable general equilibrium cge model is employed the model is benchmarked in an oil producing country with declining production namely cameroon the results show that the pih renders public finances less vulnerable during the post oil transition however adopting the pih is not associated with substantial improvements in growth and household welfare in cameroon therefore the pih cannot be the only basis for better management of oil revenues in the country

firm specific human capital a skill weights approach the theory of human capital is agnostic on what constitutes firm specific skills the theory specifies that specific skills contribute to productivity only at the current firm a broader approach lets all skills be general but firms use them with different weights attached for example computer programming economics and accounting are general skills but there may be only one firm that wants workers trained in all three one implication is that wage profiles and the split of human capital costs depend on thickness of the market another is that firms pay for what appears to be general training

industry specific capital and the wage profile evidence from the national longitudinal survey of youth and the panel study of income dynamics using data from the national longitudinal survey of youth 1979 96 and the panel study of income dynamics 1981 91 i seek to determine whether there is any net positive return to tenure with the current employer once we control for industry specific capital including total experience in the industry as an additional explanatory variable i show that the return to seniority is markedly reduced using gls while it virtually disappears using iv gls at both the one digit and three digit levels therefore it seems that what matters most for the wage profile in terms of human capital is industry specificity not firm specificity

the economic effects of windfall gains in export earnings 1975 1978 abstract this paper reviews the effects of recent dramatic increases in beverage prices 1975 1978 on a sample of countries that are highly dependent on these commodities in most countries the increase in producer prices was restricted allowing substantial sums to accrue to the central government and the commodity organizations the countercyclical impact of fiscal policy was often limited by the rise in development spending this policy stance and the lack of monetary restraint contributed to a substantial rise in imports consequently in many of the sample countries the external reserve position in 1978 was little better than before the windfall gain

a survey of the literature on the optimal peg abstract it is widely agreed that floating is not an appropriate exchange rate policy for most developing countries but in a world of generalized floating the question of exchange rate policy is not resolved by deciding to peg rather than to float it is also necessary to decide to what to peg this is the question of the optimal peg on which a significant literature has emerged since 1976 the present paper provides a survey of that literature section 2 summarizes the principal papers section 3 compares the objectives and rules advocated by different authors section 4 evaluates the alternative approaches arguing that in general the peg should be chosen to stabilize the nominal trade weighted effective exchange rate section 5 considers whether this criterion points to the sdr as a satisfactory peg

what happens to investment under structural adjustment results from a simulation model abstract this paper considers frameworks traditionally used to analyze structural adjustment issues and notes the lack of an endogenous investment response this response is important because it can reverse standard structural results and can alter the long term growth effects of contractionary shocks and policy this study includes both the structural and aggregate investment dimensions by incorporating two period optimization in a multisectoral computable general equilibrium cge model for cameroon unlike other cge models the composition of aggregate demand responds to factor prices driving investment decisions the structure of output and trade similarly respond to both macroeconomic forces and relative prices unlike other studies of investment during adjustment this model emphasizes the role of the structure of the economy in the level and sectoral distribution of investment model simulations of foreign capital outflow show that the pattern of investment reflects both sectoral interest rate sensitivity and relative price changes tariff protection for manufacturers raises the price of investment goods and interest rates affecting all investment trends reductions in the budget deficit tend to crowd in private investment

monetary co operation and economic growth in africa comparative evidence from the cfa zone countries this article compares economic growth performance of ten african countries all members of the cfa monetary zone with that of 23 non zone sub saharan african ssa countries our descriptive results suggest that overall african economies have experienced similar growth trends which are higher in the 1970s than the 1980s however contrary to previous studies disaggregated comparison of the cfa with the ssa indicate that no significant growth differences exist between these economies moreover our empirical findings suggest that monetary expansion and capital formation have positive impacts on output growth whereas inflation and government spending show negative effects in sum although participating in a monetary union has not necessarily resulted in faster output growth it has enabled the cfa countries to better control price fluctuations and monetary expansion

endogenous mergers and collusion in asymmetric market structures recent empirical evidence shows that cartels are often asymmetric while cartel theory suggests that firm symmetry is conducive to collusion including an indivisible cost of cartelization we show that medium asymmetric market structures are more conducive to collusion since they balance the small firms incentives to stay in the cartel against the need to cover the cartel leaders indivisible cartelization cost using an endogenous merger model we also show that forbidding mergers leading to symmetric market structures can induce mergers leading to asymmetric market structures with a higher risk of collusion current antisymmetry merger policy can thus be counterproductive

adjustment and economic performance under a fixed exchange rate a comparative analysis of the cfa zone abstract this paper examines the economic performance of the cfa franc zone versus non cfa countries in recent years a modified control group approach is used to compare the evolution of macro economic indicators in the cfa countries vis a vis other sub saharan african countries controlling for initial conditions changing exogenous internal and world environment and policy stance in addition our approach allows for a formal testing of whether zone membership is a random the implication of randomness i e no selection bias is that the cfa zone economies would have performed in the same fashion as the rest of sub saharan africa for example in the absence of the zone our results show that the randomness assumption is only valid for the cases of gdp growth and inflation for other indicators savings investment and export ratios to gdp the decision to participate in the zone is endogenous and is related to the expectation of improved economic performance subsequently in the estimation of the zone s effects on the latter group of indicators we corrected for the ensuing sample selectivity bias by estimating that status indicator participation versus non participation via a probit model our estimation results indicate a weakening competitive position of the cfa members during the second half of 1980s relative to the first half compared with the non cfa countries in terms of output growth as well as the performance of exports investment and savings the exception is domestic inflation with the cfa countries faring better on that front results for a longer term comparison the 1970s versus the 1980s are somewhat mixed while the estimated coefficients for the marginal effect of zone participation corroborates a better performance for the cfa zone over the group of comparators in terms of exports domestic savings and investment and inflation the zone failed to distinguish itself with regard to economic growth in the long run

occupational and job mobility in the us we propose a new methodology to measure worker mobility across occupations and jobs in the us building on the limited longitudinal dimension of monthly cps data for the period 1979 2006 we find that about 3 5 of male workers employed in two consecutive months report different three digit occupations this rate is procyclical mildly rising in the 1980s and falling after 1995 we also revise upward current estimates of aggregate job to job mobility since 1994 from 2 7 to 3 2 of employment per month despite extreme similarity of average levels and time series behavior occupational and job mobility are only weakly correlated

the polarization of the u s labor market this paper analyzes a marked change in the evolution of the u s wage structure over the past fifteen years divergent trends in upper tail 90 50 and lower tail 50 10 wage inequality we document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years since 1980 wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987 but it has ceased growing and for some measures actually narrowed since the late 1980s furthermore we find that occupational employment growth shifted from monotonically increasing in wages education in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage education distribution in the 1990s we characterize these patterns as the u201cpolarization u201d of the u s labor market with employment polarizing into high wage and low wage jobs at the expense of middle wage work we show how a model of computerization in which computers most strongly complement the non routine abstract cognitive tasks of high wage jobs directly substitute for the routine tasks found in many traditional middle wage jobs and may have little direct impact on non routine manual tasks in relatively low wage jobs can help explain the observed polarization of the u s labor market this abstract was borrowed from another version of this item

ringleaders in larger number asymmetric cartels the concept of a cartel ringleader has specific legal meaning but has received relatively little attention in the economic literature of cartels this article draws on a sample of 89 european cartels to identify how often ringleaders exist who they are and what they do it argues that ringleaders are more likely where the traditional cartel problems are likely to be most acute i e with larger numbers of members exhibiting substantial size asymmetries this is confirmed for price fixing and bid rigging cartels and is especially pronounced where the ringleader displays aggressive as opposed to merely organisational behaviour

a formulation of the earnings function using the concept of occupational investment standard models of income determination specify income to be a function of two variables that measure postschool investment the years of labor market experience and the years of employer tenure this investigation develops a better proxy for general human capital investments by hypothesizing that the intensity of investment varies by occupation and that a proportion of the occupational skills are transferable with occupational change after developing exogenous measures of these features the occupational investment variable is calculated for the young men of the national longitudinal survey empirical work demonstrates that occupational investment is a strong determinant of income far superior to the experience variable

income effects of adjustment to a terms of trade disturbance and the demand for adjustment finance abstract this paper shows that when economic adjustment is costly and therefore takes place gradually it is optimal to seek external finance in response to permanent as well as transitory shocks while at the same time adjusting to the disturbance sluggish adjustment also creates an asymmetric relationship between permanent changes in the terms of trade and optimal foreign borrowing that is while a permanent deterioration in the terms of trade generates a demand for foreign loans so would an improvement the paper presents suggestive evidence that the effects may be empirically significant though they arise from effects that are technically second order of magnitude

the choice of an optimum exchange currency regime for a small economy an econometric analysis abstract this paper investigates empirically the issue of a fixed versus a flexible exchange currency regime for a small economy the west african monetary union the econometric analysis implements a mundellian trade off between economic development and monetary stability which measures the main cost and benefit of the various exchange currency regimes examined the empirical results indicate that the fixed trade weighted basket peg is optimal by the tower and willet criterion and that it meets some of kenen s criteria for an efficient exchange currency regime

this job is getting old measuring changes in job opportunities using occupational age structure high and low wage occupations are expanding rapidly relative to middle wage occupations in both the u s and the e u we study the reallocation of workers from middle skill occupations towards the tails of the occupational skill distribution by analyzing changes in age structure within and across occupations because occupations typically expand by hiring young workers and contract by curtailing such hiring we posit that growing occupations will get younger while shrinking occupations will get old after verifying this proposition we apply this observation to local labor markets in the u s to test whether markets that were specialized in middle skilled occupations in 1980 saw a differential movement of both older and younger workers into occupations at the tails of the skill distribution over the subsequent 25 years consistent with aggregate trends employment in initially middle skill intensive labor markets hollowed out between 1980 and 2005 employment losses among non college workers in the middle of the occupational skill distribution were almost entirely countered by employment growth in lower tail occupations for college workers employment losses at the middle were offset in roughly equal measures by gains in the upper and lower tails of the occupational skill distribution but gains at the upper tail were almost entirely limited to young college workers consequently older college workers are increasingly found in lower skill lower paying occupations this abstract was borrowed from another version of this item

monetary integration in africa a deliberately european perspective abstract several initiatives for monetary integration in africa at the subregional level have recently emerged in terms of orthodox theory the preconditions are not satisfied and the sequencing of these initiatives appears at fault utilizing modern theories the paper examines the case for monetary integration which depends on the prospects for improved macro stability and surveys possible strategies by comparison with europe african countries seeking monetary integration have the advantage that they can peg to an appropriate external anchor external support for such a link perhaps from the european community would be an efficient and cost effective means of promoting such initiatives

quantifying the coordinated effects of partial horizontal acquisitions abstract recent years have witnessed an increased interest by competition agencies in assessing the competitive effects of partial acquisitions we propose an empirical structural methodology which can deal with settings involving all types of owners and ownership rights to quantify the coordinated effects of partial horizontal acquisitions on differentiated products industries by evaluating the impact of such acquisitions on the minimum discount factors for which coordination can be sustained we also provide an empirical application of the methodology to several acquisitions in the wet shaving industry that give rise to cross and common ownership structures the results are as follows i the incentives to coordinate of the firms that the acquiring party is pre acquisition able to influence are non decreasing with any acquisition ii the incentives to coordinate of the acquired firm are non decreasing with acquisitions involving full or partial both financial and corporate control rights but non increasing with acquisitions involving full or partial solely financial rights and iii the incentives to coordinate of the remaining firms in the industry are non increasing with any acquisition this implies that the coordinated effects of partial horizontal acquisitions are in general ambiguous which illustrates the importance of an empirical structural methodology

price and monetary convergence in currency unions the franc and rand zones abstract theory suggests that a currency union will impose significant macroeconomic disciplines on its members the law of one price for example should lead to convergence of price levels at least for what may be regarded as tradeable goods likewise arbitrage would imply convergence of interest rates this paper looks at the two main surviving currency unions the franc and rand zones in africa to see whether and to what extent these generally accepted propositions find confirmation in the data each of the african currency unions has a dominant or core member france in the case of the franc zone and the republic of south africa rsa in the case of the rand zone our focus is on the small members in the periphery and for them there is the additional presumption that inflation and interest rates will be imported from the core despite some rather wide short run divergences and although convergence is slow we find that in the long run consumer price inflation is largely determined in the core the limited evidence available suggests that uncontrolled interest rates also converge to core country levels jel f31

effective rates of protection when domestic and foreign goods are imperfect substitutes the case of thailand noting that standard calculations of effective rates of protection assume that domestic and foreign goods are perfectly substitutable this paper relaxes that assumption using a fifty four sector general equilibrium model of thailand the authors compute effective rates of protection when the imported and domestically produced good in each sector are assum ed to be imperfect substitutes and compare them with the effective rates of protection as derived using the standard approach their results show that the general equilibrium calculation differs from the standard one not ju st in the ranking and magnitude of the effective rates of protection but sometimes even in the sign copyright 1992 by mit press

uniform commercial policy illegal trade and the real exchange rates a theoretical analysis countries on fixed exchange rates sometimes use uniform tariff cum subsidy utcs schemes as a way of achieving a real depreciation without disturbing the nominal exchange rate a potential drawback of this policy in relation to an across the board devaluation is that a utcs scheme provides incentives for illegal trade using an optimizing model with currency convertibility and illegal trade the author finds that welfare is lower under a utcs scheme than under a corresponding across the board devaluation and that in some cases the real exchange rate actually appreciates in response to an increase in the utcs rate

what should i be when i grow up occupations and unemployment over the life cycle abstract why is unemployment higher for younger individuals we address this question in a frictional model of the labor market that features learning about occupational fit in order to learn the occupation in which they are most productive workers sample occupations over their careers because young workers are more likely to be in matches that represent a poor occupational fit they spend more time in transition between occupations through this mechanism our model can replicate the observed age differences in unemployment which as in the data are due to differences in job separation rates

the origins of agricultural policy in ivory coast 1960 86 there is a more limited degree of urban bias in cote d ivoire than in most other african countries different explanations for relatively high producer price shares reliable extension services etc are required for the periods 1960 70 and 1970 86 the arguments offered focus on the composition of the income portfolios of senior political elites and on the rise of special kinds of urban informal associations that have acted as lobbying organisations on behalf of rural household members the article seeks to dispel the notion that differences in opportunities for political participation alone can account for the variations in the outcomes observed in the african cases

the u shapes of occupational mobility using administrative panel data on the entire danish population we document a new set of facts characterizing occupational mobility for most occupations mobility is u shaped and directional not only low but also high wage earners within an occupation have a particularly large probability of leaving their occupation and the low high earners tend to switch to new occupations with lower higher average wages exceptions to this pattern of two sided selection are occupations with steeply rising declining productivity where mainly the lower higher paid workers within this occupation tend to leave the facts conflict with several existing theories that are used to account for endogeneity in occupational choice but it is shown analytically that the patterns are explained consistently within a theory of vertical sorting under absolute advantage that includes learning about workers abilities

how should structural adjustment programs be designed abstract more than seven years have elapsed since the onset of the generalized debt crisis of 1982 yet the affected countries have still not managed to stabilize their economies these countries must now attempt structural adjustment in the midst of pervasive macroeconomic and political instability structural adjustment packages should be designed with this reality in mind this paper argues that structural adjustment programs should strive for sustainability rather than the economic liberalization that they presently stress illiberal policies which do not damage overall macro stability are preferable to liberal policies which are inherently unsustainable or engender macro instability liberalization programs that are not sustainable are likely to bring few benefits but have high costs in terms of private investment the paper discusses some of the chief implications of this opinion for the design of adjustment programs

government finance in a common currency area abstract european integration in 1992 may require greater exchange rate coordination thatn currently exists the delors report goes as far as to recommend the eventual adoption of a single currency however the formation of a common currency area raises fears that independent fiscal policies may produce inferior outcomes this paper shows that lack of cooperation in fiscal policy leads to too little inflation too high taxes and too much government spending jel f33

human capital specificity evidence from the dictionary of occupational titles and displaced worker surveys 1984 2000 measures of four basic skills constructed from the dictionary of occupational titles are used to examine the source of human capital specificity the measures are used to characterize the skill portfolio of each job and to construct distance measures between jobs wage losses in the displaced worker surveys are shown to be more closely associated with switching skill portfolios than switching industry or occupation code per se these switches represent large decreases in the skill portfolio in the postdisplacement job the recent evidence for industry specific capital is reexamined the results suggest a difference between fluid and crystallized skills

evaluating participation in african monetary unions a statistical analysis of the cfa zones abstract thirteen african nations are engaged in two monetary unions with france often referred to as the cfa zone despite the acknowledged benefits of zone membership a convertible currency pooled resources and greater monetary and fiscal discipline several observers have questioned whether particular aspects of the zone such as the lack of autonomy of the two central banks and the surrender of the exchange rate as a policy instrument have impeded its members growth this paper addresses that question by testing whether cfa zone countries had different gnp growth rates from selected comparator countries during 1960 1982 results show that cfa countries grew significantly faster than comparator sub saharan african countries but usually slower and often significantly so than the whole sample of developing countries when the comparison is made by subperiod before and after 1973 cfa countries performance vis a vis that of their comparators improved during the 1973 1982 period casting further doubt on the claim that the monetary union is not functioning adequately

private investment under uncertainty in ghana abstract ghana s economic recovery program saw considerable growth of the economy during 1985 1991 this commendable performance slackened after 1992 a fact which is attributable to poor private investment response following reform this article shows that the poor growth in private investment may be attributed to the perception of uncertainty in the political and economic environment since 1982 the uncertainty is derived from the low credibility of government as it has been unable to assure investors that earlier decisions that showed a bias against private wealth will not be repeated economic incentives arising from reforms do not provide guarantees against poor credibility

terms of trade fluctuations and stabilization of producer prices by compensatory taxation abstract a small general equilibrium model is presented which highlights the role of the real exchange rate in the south in determining the terms of trade between the south and the north the dynamics of the model may generate terms of trade instability for some values of the parameters of the system compensatory taxation of export earnings by a stabilization fund in the south is shown to increase the likelihood of instability

occupational mobility and wage inequality in this article we argue that wage inequality and occupational mobility are intimately related we are motivated by our empirical findings that human capital is occupation specific and that the fraction of workers switching occupations in the u s was as high as 16 a year in the early 1970 s and had increased to 21 by the mid 1990 s we develop a general equilibrium model with occupation specific human capital and heterogeneous experience levels within occupations we find that the model calibrated to match the level of occupational mobility in the 1970 s accounts quite well for the level of within group wage inequality in that period next we find that the model calibrated to match the increase in occupational mobility accounts for over 90 of the increase in wage inequality between the 1970 s and the 1990 s the theory is also quantitatively consistent with the level and increase in the short term variability of earnings copyright wiley blackwell

rising occupational and industry mobility in the united states 1968 97 we document and analyze the high level and the substantial increase in worker mobility in the united states over the 1968 97 period at various levels of occupational and industry aggregation this is important in light of the recent findings that human capital of workers is largely occupation or industry specific to control for measurement error in occupation and industry coding we develop a method that utilizes the psid retrospective occupation industry supplemental data files we emphasize the importance of our findings for understanding a number of issues such as the changes in wage inequality aggregate productivity job stability and life cycle earnings profiles

the assessment financial liberalization financial systems and economic growth the report addresses four sets of issues mac roeconomic policy to promote growth the role of financial liberalization govemmentinterventionin credit markets and the design of financial systems it puts forward the following blueprint for reform reform should start by getting the fiscal deficit under control and establishing macroeconomic stability the government should then scale down its directed credit programs and adjust the level and pattern of interest rates to bring them into line with inflation and other market forces in the initial stage of reform the govern ment should also try to improve the foundations of finance that is the accounting and legal systems procedures for the enforcement of contracts disclosure requirements and the structure of prudential regulation and supervision it should encourage managerial au tonomy in financial institutions if institutional insol vency is widespread the government may need to re structure some financial institutions in the early stages of reform world bank 1989 p 127

occupational specificity of human capital we find that returns to occupational tenure are substantial everything else being constant 5 years of occupational tenure are associated with an increase in wages of 12 20 moreover when occupational experience is taken into account tenure with an industry or employer has relatively little importance in accounting for the wage one receives this finding is consistent with human capital being occupation specific

external shocks purchasing power parity and the equilibrium real exchange rate two approaches are commonly used to determine the equilibrium real exchange rate in a country after external shocks purchasing power parity ppp calculations and the salter swan tradables nontradables model there are theoretical and empirical problems with both approaches and tensions between them in this article the authors resolve these theoretical and empirical difficulties by presenting a model which is a generalization of the salter swan model and which incorporates imperfect substitutes for both imports and exports within the framework of this model the definition of the real exchange rate is consistent both with that of the ppp approach and with that of the salter swan model suitably extended the model however is capable of capturing a richer set of phenomena including terms of trade shocks and changes in foreign capital inflows it also provides a practical way to estimate changes in the equilibrium real exchange rate requiring little more information than is required to do ppp calculations the results are consistent with those of multisector computable general equilibrum models which generalize the trade specification of the small model

collusion and research joint ventures i examine the question whether cooperation in r d among firms producing similar products leads to product market collusion suppose that firms engage in a stochastic r d race while maintaining the collusive equilibrium in a repeated game framework innovation under non cooperative r d leads to an inter firm asymmetry destabilizing collusion in pre discovery and post discovery periods innovation sharing under cooperative r d preserves the symmetry and also increases total profit thereby facilitating collusion however welfare may increase with cooperative r d i also examine the condition for collusion under licensing and compare the results

the allocation of seigniorage in the franc zone the beac and bceao regions compared abstract evidence from the franc zone suggests that a quarter in the bceao region to a half in the beac region of seigniorage accruing to the central bank finds its way to the fiscal authorities this share has increased throughout 1976 1991 as have the operating expenses of the central banks in the bceao region there has been a shift in seignoirage toward the larger and richer members of the mone tary union more so than in the beac region this is attributed to the dividend distribution regimes credit allocation process and events in the financial sector in each monetary union

adjustment with a fixed exchange rate cameroon cote d ivoire and senegal as members of the cfa franc zone cameroom cote d ivoire and senegal cannot use the nominal exchange rate as a tool of macroeconomic adjustment this article considers these countries responses to the commodity and oil price shocks of the 1970s in light of this and other institutional constraints using a two sector model it shows that there exist instruments that in principle permit the real exchange rate depreciation necessary for adjusting to macroeconomic imbalances the authors interpret the very different adjustment experiences of the three countries despite their common economic structure and institutional setting in terms of different uses of these instruments alternative assumptions about the labour market leave the qualitative nature of the results unaltered statistical analysis of data from the three countries confirms the model s linking of the current account and real exchange rate with the instruments of adjustment

education quality and development accounting this paper measures the role of quality adjusted years of schooling in accounting for cross country output per worker differences while data on years of schooling are readily available data on education quality are not i use the returns to schooling of foreign educated immigrants in the u s to measure the education quality of their birth country immigrants from developed countries earn higher returns than do immigrants from developing countries i show how to incorporate this measure of education quality into an otherwise standard development accounting exercise the main result is that cross country differences in education quality are roughly as important as cross country differences in years of schooling in accounting for output per worker differences raising the total contribution of education from 10 to 20 of output per worker differences copyright 2012 oxford university press

marginal costs and collusive sustainability abstract in an oligopoly supergame firms actions in prices and quantities are subject to non negativity constraints these constraints can obstruct the practicability of some of the tacitly collusive subgame perfect equilibria such as single period optimal punishment which relies indispensably upon firms ability to charge prices strictly below marginal costs i e temporarily loss making pricing thereby under the presence of positive price constraints marginal costs can serve as a fudge to materialise such penal pricing in this paper we briefly shed light on the effects of profit cost ratios or mark ups on the sustainability of tacit collusion

career choice and wage growth in this article i present structural estimates of a search model that flexibly incorporates general human capital accumulation along with career and firm choice where a career is empirically identified as a combination of industry and occupation i use these estimates to empirically distinguish between the relative importance of various factors for generating wage growth over the life cycle evidence presented in the article highlights the importance of considering the two stage search process that originates from the model in particular i demonstrate that previous instrumental variables methods dramatically underestimate the importance of firm specific matches for wage growth

the costs of occupational mobility an aggregate analysis we estimate the costs of occupational mobility using a novel approach that relies on aggregate flows of workers across occupations rather than on wage data the theoretical underpinnings for this approach are derived from a model of occupation choice that delivers a gravity equation linking worker flows to occupation characteristics and to transition costs which we proxy using task data from the dictionary of occupational titles dot occupation flow data are constructed from the matched monthly current population survey cps between 1994 and 2012 we find that transition costs vary widely across occupations are increasing in task distance the dissimilarity in the mix of tasks performed in the two occupations and are higher for transitions across broad task categories however most of the transition costs are accounted for by general task independent entry costs specific to each destination occupation

is africa different abstract africa s macroeconomic response to external shocks was significantly differrent from that of other developing countries during 1976 1986 nonparametric tests that correct for differing initial conditions indicate significantly lower economic growth in african economies average inflation was also significantly lower while current account deficits were larger economic policies in african countries are characterized by significantly larger budget deficits and government current expenditure as a share of gross domestic product and by greater inward orientation african economies in the cfa franc zones are distinguished by relatively lower inflation budget deficits and less reduction in investment gnp ratios

change in state power international conditions and peasant producers the case of kenya arguments for food self sufficiency at the level of small scale farms invariably refer to the need for national self sufficiency this article shows that state inspired attempts to impose self sufficiency upon specialised middle peasant producers in kenya have had the effect of reducing the supply of marketed food and increasing food imports a change in the character of presidential power has also inhibited food production by large scale farms and this together with imported price shocks has reduced the supply of food for commercialised peasants who produce for international markets only very specific political conditions make it possible for international and internal circuits of capital and exchange to be harmonised through the power of a nation state

the impact of cyclical demand movements on collusive behavior recent work by rotemberg and saloner 1986 investigates the effect of the business cycle on optimal collusive pricing by specifying that demand is subject to i i d shocks an implication of the i i d assumption is that firms expectations on future demand are unrelated to the current level of demand we put forth a model that allows for both the level of current demand and firms expectations on future demand to change over time thus it captures two important properties of the business cycle our analysis reveals that while the gain to deviating from a collusive agreement is greatest during booms firms find it most difficult to collude during recessions as the forgone profits from inducing a price war are relatively low an implication of this effect for pricing behavior is that at the same level of demand price is lower when demand is declining than when demand is rising consistent with previous theoretical work we find that firms price countercyclically for a range of values for the discount factor however numerical simulations reveal a greater tendency for firms to price countercyclically during recessions than during booms

fiscal policy and occupational employment dynamics we document substantial heterogeneity in occupational employment dynamics in response to government spending shocks in the united states employment rises most strongly in service sales and office pink collar occupations by contrast employment in blue collar occupations is hardly affected by fiscal policy we provide evidence that occupation specific changes in labor demand are key for understanding these findings we develop a business cycle model that explains the heterogeneous occupational employment dynamics as a consequence of composition effects due to heterogeneous employment changes across industries and occupation specific within industry employment shifts due to differences in the short run substitutability between labor and capital services across occupations

economic growth in africa abstract this paper draws on the recent endogenous growth methodology to study the factors behind differences in per capita growth rates across africa the results indicate that various economic factors including initial conditions investment population growth trade orientation inflation financial development and the growth of the government sector contribute significantly to economic growth in addition to economic variables we find the degree of political freedom to be a significant contributor to economic growth finally we find some evidence that economic growth by the members of the cfa franc zone has not fared well in comparison to other african countries

the internal determinants of eight oil exporting countries resource based industry performance the performance of the oil exporters resource based industry rbi was determined by sectoral mix type of enterprise and macroeconomic policy rbi strategies tended to be overambitious and overdependent on one sector especially in the bigger countries wholly state owned enterprises soes experienced more problems than joint ventures macroeconomic mismanagement shrank domestic markets and denied competitive exchange rates for viable exports the dismal nigerian and venezuelan rbi performances reflect weak macroeconomic policy and the dominance of soe steel results are better in the soundly managed asian economies which also benefited from greater use of joint ventures with multinational corporations the anomaly of saudi arabia s initial under performance reflects strategy flaws