migration age and earnings the special case of employee transfers the regional relocation of workers within firms is examined this aspect of migration has received little attention in spite of the routine occurance of employee transfers the existence of such transfers suggests that a portion of each worker s human capital is employer specific and readily transferrable across locations thus a different age profile for transfers than that for conventional migrants may be expected specially a model of employee relocation and the consequences of relocation on post transfer earnings is examined

radicalism versus gradualism an analytical survey of the transition strategy debate academic debate on a transition strategy for former socialist economies continues even a quarter century after the collapse of the communism in central and eastern europe and the former soviet union in this paper through an analytical survey of 137 preceding studies we present an overall picture of the debate and examine the relationship between the debate attitudes and the literature attributes in related studies we found that the radicalists maintain a consistent debate attitude from the viewpoints of time speed and policy sequence of economic transition while the debate attitude of the gradualists is more diversified we also found that there is another group of researchers that stays within the framework of the radicalism versus gradualism debate while at the same time keeping at arm s length from both the radicalists and the gradualists in addition our regression estimation of qualitative selection models provides interesting findings on the relationship between the debate attitudes and the literature attributes

structural factors in the economic reforms of china eastern europe and the former soviet union reform in china and russia jeffrey sachs and wing thye woo china s experience does not show that gradual reform is superior to the shock therapy undertaken in eastern europe and the former soviet union eefsu differing performance primarily reflects different economic structures prior to reform china was a peasant agricultural society eefsu was urban and overindustrialized in both jobs in state enterprises were so heavily subsidized that workers refused to move to new industries elsewhere even when productivity in the latter was much higher in eefsu the large state sector impeded structural adjustment curtailing subsidies would have produced many losers who used their power to resist this outcome failure to curtail subsidies then cut off the potential supply of labour and other factors to new emerging firms china s state enterprises have not performed as well as the rest of the chinese economy and do not explain its success rapid growth was possible because the large agricultural sector contained vast surplus labour and did not enjoy subsidies and soft budget constraints once constraints on migration across regions and jobs were removed this labour was available to fuel expansion in new industries unlike the distributional conflict in eefsu in china reallocation of labour allowed all groups to gain in both partial liberalization also unleashed macroeconomic pressures manageable in china because of rapid growth and adequate monetary policy but explosive in much of eefsu because of deeper structural problems and gross monetary mismanagement

an equilibrium model of asset trading with sequential information arrival in an effort to better understand the dynamic market price adjustment process this paper develops a model which describes the impact of new information on a financial market the primary emphasis is on the price change volume relationship in the presence of a margin requirement we find that the margin requirement significantly affects the relation of price change to volume furthermore this relationship is shown to be affected by the number of investors in the market the degree of information dissemination differences in interpretation of information and the implicit cost of the margin requirement

beyond privatization institutional innovation and growth in china s large state owned enterprises abstract this article demonstrates that china s large state owned enterprises soes are not stagnant fossils waiting to die under economic reform policies this sector has undergone large change due to enhanced enterprise autonomy the impact of market forces rapid growth of domestic demand for upstream products strategic integration with the world economy and the state s policy to promote large businesses china s large soes are developing new institutional forms that do not neatly fit into existing patterns china is experimentally changing its institutions through a combination of central policy local initiative and interaction with international investment this presents a challenge to the transitional orthodoxy and to ideas concerning property rights in development economics there is not a universal model of property rights and government action that works best in all circumstances china s experience with the reform of large soes shows the diverse possibilities for effective industrial institutions

the breakdown of hierarchies in the soviet union and china a neoinstitutional perspective why did modest attempts to decentralize the centrally administered soviet system lead to its collapse while more far reaching decentralization in china left central political and administrative hierarchies intact this article analyzes the disintegration of centrally planned organizations in the context of a neoinstitutional model of the breakdown of authority within hierarchies an agency model of hierarchy is presented that incorporates the ambiguous property rights authority relations and risk sharing conditions that prevailed under central planning and then persist during postcommunist transitions this model suggests that decentralizing reforms could trigger an organizational bank run prompting local agents to seize organizational assets under their control the article also considers reputation preserving strategies that central authorities might use to avert disintegration as an application of this model the collapse of soviet political industrial and state fiscal hierarchies are considered and compared with the experience of analogous sectors in china reforms in both states transferred significant autonomy from the center to local field agents in the soviet case these agents appropriated organizational assets with little interference from the center in china by contrast the center preserved both its capacity for monitoring and its reputation for disciplining transgressions and the rise of hybrid ownership forms made expropriation of state and party assets far less attractive

realized volatility transmission the role of jumps and leverage effects this paper is the first to employ a multivariate extension of the lhar cj model for realized volatility of corsi and reno 2012 considering continuous and jump volatility components and leverage effects the model is applied to financial s p 500 commodity wti crude oil and forex us eur intraday futures data and allows new insights in the transmission mechanisms among these markets besides significant leverage effects we find that the jump components of all considered assets do not contain incremental information for the one step ahead realized volatility the volatility of s p 500 and us eur exchange rate futures exhibits significant spillovers to the realized volatility of wti moreover decreasing equity prices appear to increase volatility in other markets while strengthening of the us seems to calm down the crude oil market

migration and individual earnings in finland a regional perspective attention has recently focused on the rapidly increasing pace and regional concentration of migration in finland most migrants head to the growth centre regions located mainly in the southern parts of the country this study investigates the effects of moving on individuals and compares the post move incomes across the finnish regions significant regional differences in the types of inmigrants and their incomes are observed the results indicate that in general migrants tend to benefit from moving in the form of higher post move incomes in particular individuals who move to relatively rich regions have higher levels of income succeeding the move and also experience faster income growth those moving to poorer regions generally have lower incomes yet moderate income growth these findings hence imply that both the actual move and the choice of destination region affect individual incomes dans les annees recentes l attention porte sur l augmentation importante du taux de changement et de la concen

migration theories and evidence an assessment abstract this paper presents a critical survey of theories of migration their welfare and policy implications and their empirical relevance we also develop some extensions to the theory beginning with the harris and todaro ht model in particular the ht model is extended to examine risk averse behaviour within families where the migration of members of families serves to diversify risk the welfare implications of the individual migration decision and government intervention in the form of employment subsidies are examined recent evidence on international migration is presented it is shown that migration does not flow automatically in response to wage differentials characteristics of migrants and the process of self selection are found to be important determinants of the rate of migration

after state socialism the political origins of transitional recessions transitions from state socialism created a startling range of initial economic outcomes from renewed growth to deep economic crises debates about the causes have largely ignored the political dis

the dynamics of stock index and stock index futures returns in rational efficiently functioning markets the returns on stock index and stock index futures contracts should be perfectly contemporaneously correlated this study investigates the time series properties of 5 minute intraday returns of stock index and stock index futures contracts and finds that sp however the effect is not completely unidirectional with lagged stock index returns having a mild positive predictive impact on futures returns

reform without losers an interpretation of china s dual track approach to transition this paper develops a simple model to analyze the dual track approach to market liberalization as a mechanism for implementing efficient pareto improving economic reform that is reform achieving efficiency without creating losers the approach based on the continued enforcement of the existing plan while simultaneously liberalizing the market can be understood as a method for making implicit lump sum transfers to compensate potential losers of the reform the model highlights the critical roles of enforcement of the plan for achieving pareto improvement and full liberalization of the market track for achieving efficiency we examine how the dual track approach has worked in product and labor market liberalization in china

modeling and explaining the dynamics of european union allowance prices at high frequency in this paper we model the adjustment process of european union allowance eua prices to the releases of announcements at high frequency controlling for intraday periodicity volatility clustering and volatility persistence we find that the high frequency eua price dynamics are very well captured by a fractionally integrated asymmetric power garch process the decisions of the european commission on second national allocation plans have a strong and immediate impact on eua prices on the other hand our results suggest that eua prices are only weakly connected to indicators about the future economic development as well as the current economic activity

group specific effects of interregional mobility on earnings a microdata analysis for germany lehmer f and moller j group specific effects of inter regional mobility on earnings a microdata analysis for germany regional studies the paper analyses the relationship between regional mobility and earnings for different groups of workers using a large panel microdata set the authors find negative earnings differentials of movers in the year before migration and strong evidence for significant wage gains through mobility a decomposition of blinder oaxaca type reveals different group specific rewards effects suggesting a positive post mobility wage differential of movers over the incumbent workforce for some groups irrespective of the region of destination the existence of a general wage growth effect of mobility appears to be robust and cannot be explained by the time invariant part of unobserved heterogeneity lehmer f et moller j l impact sur les revenus la mobilite interregionale des groupes specifiques des groupes sur les revenus une analyse des donnees microeconomiques pour l allemagne

stabilization and growth in transition economies the early experience this paper analyzes the growth and stabilization experience in 26 transition economies in eastern europe the former soviet union and mongolia for the period 1989 1994 inflation rates have declined significantly in most countries following an inflation stabilization program growth resumes after stabilization occurs typically with a lag of about two years reducing inflation thus appears to be a precondition for growth an econometric analysis of the short run determinants of inflation and growth illustrates the key roles of fixed exchange rates improved fiscal balances and structural reforms in spurring growth and lowering inflation and confirms that inflation stabilization programs have been beneficial for growth even after controlling for structural reforms

political conditions for reform china vs eastern europe revisited the long literature of former socialist systems concludes that any effort to reform the economy without drastic political change is believed to be doomed to fail because tight political control and nonmarket coordination mechanisms are intertwined with each other indeed the history of economic reform in eastern european countries has confirmed this logic so far however the experiences of china and vietnam seem to have defied this logic we argue that the puzzle of china or vietnam can be explained by the ruling party s strong initial and more efficient control which allow the party to reform the economy without losing political control jel p20 p26 p51

the effects of wage distortions on the transition abstract before the reforms the chinese government had strong distributional objectives which it pursued mainly by direct controls over state enterprise wage rates and hiring decisions during the reform period similar controls over state enterprises continued but use of them had to reflect competition with the new nonstate sector that was mostly free from these controls based on these distributional considerations alone we can explain 1 a decline in the skills of workers in the state sector as the most able workers leave 2 higher productivity in the nonstate sector which consists of the most able workers 3 accounting losses in the state sector reflecting the transfer of tax revenue to finance higher wage payments to the unskilled and 4 restructuring within the state sector to reduce the distortions to relative wage rates

the effects of reform on china s bank structure and performance abstract this paper investigates the relationship between market structure and performance in china s banking system from 1985 to 2002 a period when this sector was subject to gradual but notable reform using panel data estimation techniques both the market power and efficient structure hypotheses are tested in addition the model is extended to consider issues such as the impact of bank size ownership and whether the big four banks enjoy a quiet life on average x efficiency declined significantly and most banks were operating below scale efficient levels estimation of the structure performance models lends some support to the relative market power hypothesis in the early period the reforms had little impact on the structure of china s banking sector though the joint stock banks became relatively more x efficient there was no evidence to support the quiet life hypothesis probably because strict interest rate controls prevented the state banks from earning monopoly profits thus the ongoing liberalisation of interest rates should be accompanied by reduced concentration overall to improve competitive structure new policies should be directed at encouraging market entry and increasing the market share of the most efficient banks

realized volatility transmission between crude oil and equity futures markets a multivariate har approach this paper differs from extant literature because it studies volatility co movements with a multivariate orthogonalized har model a flexible specification for the time series of realized volatility which is able to identify short mid and long term spillover effects we examine volatility transmission mechanisms using high frequency data of the stock index futures on s p 500 nikkei 225 ftse 100 and the futures on the west texas intermediate crude oil during the period from september 2002 to september 2012 considering the full sample the short term volatility of the equity futures contains information about future oil volatility incremental to the information inherent in the time series of oil volatility on the other hand weekly and monthly volatilities do not exhibit a significant spillover effect breaking the whole sample into three subsamples no significant granger causalities are observed in the pre crisis period while in the crisis time and its aftermath we document that the us and uk equity market volatilities to granger cause the oil futures volatility which itself leads the japanese market in terms of magnitude we observe an increase in the short term volatility spillover over time studying the residuals of the har transmission models within a ccc dcc garch framework reveals increasing instantaneous correlation between the energy and equity volatilities in the course of time

the success and failure of reforms in transition economies this paper argues that an important reason why russia s performance and china s performance under capitalism have differed dramatically is that different arrangements governing the determination of prices and work practices evolved during the transition process in russia the arrangement which conferred monopoly rights to industry groups leftover from socialism prevented the adoption of better technology in china the arrangement that evolved contained no such monopoly elements the key factor in determining which arrangement evolved was the strength of the central government we put forth a model that implements these ideas and provide evidence in support of this theory

intraday trading volume and return volatility of the djia stocks a note abstract we examine the contemporaneous correlation as well as the lead lag relation between trading volume and return volatility in all stocks comprising the dow jones industrial average djia we use 5 minute intraday data and measure return volatility by the exponential generalized autoregressive conditional heteroscedasticity method contrary to the mixture of distribution hypothesis the vast majority of the djia stock shows no contemporaneous correlation between volume and volatility however we find evidence of significant lead lag relations between the two variables in a large number of the djia stocks in accordance with the sequential information arrival hypothesis

the state and economic involution russia through a china lens abstract why has the russian economy declined at the rate the chinese economy has grown in china the party state has made possible the decentralization of property relations and the hardening of budget constraints whereas in russia the disintegration of the party state has led to privatization and soft budget constraints whereas the former combination entailed accumulation the latter combination entailed involution that is an economy that eats away at its own foundations by funnelling resources from production to exchange russia s involution has proceeded in a combined mode that is through a series of phases in which government policies try to rectify the unintended consequences of previous policies involution is also uneven as different industries adopt different strategies some rapidly exited from the old order and then disintegrated while others voiced their demands to the state and declined more slowly

reform strategies in transitional economies lessons from asia abstract to date with the possible exception of mongolia liberalization efforts have generally been more successful in the transitional economies of asia teas than in eastern europe and the former soviet union this paper argues that both initial conditions and policies were important in explaining the difference in economic performance the teas except mongolia placed microeconomic reforms ahead of macroeconomic ones similarly there were differences in the approaches taken in areas such as enterprise reform price deregulation and financial sector reform the teas need however to supplement their reform program with fiscal monetary and external sector reforms on an urgent basis without such actions the successes acheived so far could be at stake some general lessons for transitional economies are also derived

the business es of the chinese state the state industrial sector is the achilles heel of china s otherwise remarkable economic performance over the past two decades most other countries in transition from socialism have transformed soes into commercial entities through systematic market driven restructuring and privatisation to become more efficient and competitive in china a series of innovative if often administrative insitutional reforms since 1978 have begun to achieve the chinese authorities goal of separating governemtn from business but the chinese state still maintains ownership of key enterprises and government agencies carry out shareholder functions typically performed by private owners in a market economy although privatisation and restructuring of soes is occurring it mostly pertains to small and medium sized firms for the principal businesses by contrast the creation of large state enterprise groups and holding companies and experiments in other forms of state asset management have become the main form of restructuring today china s soes still account for more than one quarter of national production two thirds of total assets more than half of urban employment and almost three quarters of investment while direct budgetary subsidies have declined explicit and implicit subsidies are still making their way to prop up loss making soes through the financial system and other routes at the same time soes are still producing non marketable products resulting in a sizeable inventory overhang these inefficiencies and distortions represent a drain on the country s resources and thus present a challenge to the chinese leadership for reform this paper sheds light on these challenges by analysing the incentives and constraints on china s soe reform programme four critical aspects of the reforms are highlighted and evaluated against the backdrop of international experience clarification of property rights establishment of large group holding companies and other new organisational structures improved corporate governance incentives and implementation of international financial accounting and auditing practices the paper concludes with policy recommendations

far from the tree do private entrepreneurs agglomerate around public sector incumbents during economic transition while it is well known that state enterprises in transition economies were displaced by private enterprises at a macro level little is known about whether private entrepreneurs emerged in a way that helped preserve or shift preexisting agglomerations of industrial activity at a microgeographic level to address this question we integrate competing perspectives on the role of large bureaucratic incumbents in spawning entrepreneurs we conceptualize a trade off between two countervailing effects of large incumbents on potential entrepreneurs bureaucratic socialization and exposure to capabilities this yields novel predictions about how different kinds of startups agglomerate around different kinds of incumbents we test these predictions using fine grained geographic data on founding rates by private entrepreneurs in china s bicycle manufacturing industry consistent with our theorized trade off we find evidence of a nonmonotonic effect of incumbent size on local founding rates by private entrepreneurs additional moderating effects are consistent with boundary conditions on the hypothesized mechanisms our results provide the first empirical investigation of the extent to which entrepreneurial activity agglomerated around public sector incumbents during economic transition we discuss how these insights add to the understanding of economic transition as well as how the context of economic transition adds to the understanding of entrepreneurial spawning

pareto improving economic reforms through dual track liberalization abstract pareto improving economic reforms that also simultaneously achieve efficiency can be implemented through a strategy of dual track liberalization its success requires the feasibility of the original plan and its continued enforcement by the state the chinese experience demonstrates that such a strategy works

liberalization endogenous institutions and growth a comparative analysis of agricultural reforms in africa asia and europe thirty years ago a vast share of low and middle income countries was heavily state controlled the liberalizations of the 1980s and 1990s had greatly different effects on growth in countries in africa asia and europe a comparative framework is used to document these differences and a model is developed to formally analyze how liberalization affects production and income distribution when the institutions that govern production and exchange are also affected hypotheses are derived for how endogenous institutional adjustments affect the growth response to liberalization these insights motivate a series of explanations for the differences in performance across regions and commodities following liberalization

success and failure of reform insights from the transition of agriculture this paper analyzes the linkages between the reform strategies in transition countries and economic performance the authors focus on agriculture because of the sharpness of the policy changes fundamental differences among countries and relative simplicity of agricultural relationships the authors document post reform performance in the transition countries of asia and europe the authors show how a pricing reform and subsidy reductions b land rights reform and policies that affect farm restructuring and c the presence institutions that facilitate exchange either markets or market substitutes affect output and productivity the paper ends with general lessons on reforms and transition

intraday volume and volatility relations with and without public news this paper reexamines the dynamic relation between intraday trading volume and return volatility of large and small nyse stocks in two partitioned samples with and without identifiable public news we argue that the sequential information arrival hypothesis siah can be tested only in periods containing public news after partitioning the sample into periods with and without public news we find bi directional granger causality between volume and volatility in the presence of public information as hypothesized by the siah our analysis further suggests that return volatility is higher in the periods with public news while trading volume is significantly higher in the no news period perhaps owing to the importance of private information for trading stocks using the sample without public news we find evidence that volume granger causes volatility without feedback these results are broadly consistent with behavioral models like the overconfidence and biased self attribution model of daniel k hirshleifer d subrahmanyam a 1998 investor psychology and security market under and over reactions journal of finance 53 1839 1885 it appears that overconfident investors overrate the precision of their private news signals and therefore trade too aggressively in the absence of public news when public news arrives investors biased self attribution triggers excessive return volatility

migration and wage growth a human capital approach the purpose of this paper is to analyze migration as an investment in human capital using panel data the authors focus on two issues the first is the economic motivation for migration and the reasons some movers receive high returns relative to other migrants the second issue and the major focus of the paper is a test of the human capital model explaining wage profiles of nonmovers first time and repeat migrants the data are from the national longitudinal survey of young males 1966 1971 cross section and concern the united states excerpt

volatility volume causality across single stock spot futures markets in india abstractthis study examines the causal relationships between volatility and volume across spot and futures market for the 50 constituent stocks of the cnx nifty index granger non causality tests implemented using vector autoregression var and asymmetric var models indicate the presence of significant causal relations from both the spot and futures volume to both the spot and futures volatility bidirectional causal relationships between spot and futures volume were observed for almost all stocks but few stocks displayed a similar relationship between volatilities the results highlight the importance of volume in absorbing information and its behaviour as the conduit of information

generating conditional expectations from models with selectivity bias comment abstract plugging identical values of the mills ratio into estimates of selectivity adjusted wage regressions for men and women generates wage predictions that pertain to men and women with identical unobserved characteristics only under highly restrictive conditions this calls into question the suggestion of vella 1988 and the details of several gender gap decomposition studies

a global compact to end poverty brian snowdon presents the text of a two hour interview conducted with jeffrey d sachs of columbia university a wide ranging discussion relating to professor sachs s work over the past thirty years on macroeconomic stabilisation the economics of transition and several important issues in the field of international economic development first snowdon provides some background to the debate relating to professor sachs s most recent work that has helped focus international attention on the growth tragedy of sub saharan africa this key humanitarian issue has received enormous coverage in the media throughout 2005 and has been highlighted in particular at the g8 meetings in gleneagles and worldwide live 8 concerts in july 2005 and the un world summit in september

the war making state and privatisation states created with the central purpose of defending national independence resist the process of macro economic reform since it appears to limit their power to pursue this aim the states of the former centrally planned economies were marked out by their extreme subordination to the military drive so the resistance to reshaping the war making state into a market facilitating state is considerable the transition tends to be halted where the old structures of central control are ended without markets supplying alternative imperatives a rent seeking state is created these themes are examined in relationship to privatisation of state owned enterprises in four countries russia china vietnam and the ukraine

the october 1987 s p 500 stock futures basis five minute changes in the s p 500 index and futures contract are examined over a ten day period surrounding the october 1987 stock market crash since nonsynchronous trading problems are severe in these data new index estimators are derived and used the estimators use the complete transaction history of all 500 stocks nonsynchronous trading explains part of the large absolute futures cash basis observed during the crash the remainder may be due to disintegration of the two markets even after adjustment for nonsynchronous trading the index displays more autocorrelation than does the futures and the futures leads the index

bureaucrats in business the roles of privatization versus corporatization in state owned enterprise reform abstract this article provides evidence from a sample of 12 developing countries that countries which improved state owned enterprise performance the most followed a comprehensive strategy of reforms including a combination of privatization and corporatization further evidence that corporatization works better in combination with ownership and other reforms is provided through an analysis of government contracts with public managers private managers and private owners contracts with private managers and owners did better than contracts with public managers in part because the property rights of the former gave them a larger stake in the outcomes the article analyzes the political economy of state enterprise reform and finds that privatization and corporation have similar political costs and tend to succeed or fail together where reform was politically desirable politically feasible and credible countries privatized and corporatized successfully when countries were not politically ready to reform alternative ownership strategies were not successful in improving performance

gradualism versus big bang speed and sustainability of reforms a beneficial reform may be blocked by a majority if it is implemented by a big bang but the same reform may succeed with an optimally designed gradualist approach a gradualist approach can sometimes split opposition force and is in this sense more politically sustainable on the other hand if both approaches are politically preferred to no reform a big bang is often preferred to gradualism in terms of both political support as well as economic efficiency

futures trading with information asymmetry and otc predominance another look at the volume volatility relations in the european carbon markets this paper constitutes the first exercise of analysing the european carbon market efficiency from a double perspective combining both nature of execution venues screen vs otc trading and their volatility liquidity relations using a bivariate asymmetric gjr garch model we first document that otc exchange traded trading volume shows consistent bi uni directional granger causality to our volatility estimates consistent with greater responsiveness of the otc exchange traded market to changes in market wide idiosyncratic risks second we report significant contemporaneous and lagged positive causality of otc derivatives volume on spot futures volatility confirming that the sequential information arrival hypothesis siah applies third we find that the one way causality from otc to futures volumes is mainly driven by heterogeneous investor beliefs trading volume provides an indication on how private information is dispersed and held at different levels rather than proxying information signal itself after rejecting execution venues substitutability we advocate for systematic clearing and netting of otc positions through a unique clearing house and reporting rules to identify speculation in line with mifid art 59 proposals

government in transition abstract the speed of economic reforms is not the only important determinant of the success of the transition to a market economy the transition of government from a communist state to an institution supporting a market economy is as critical survey evidence shows that russia lags significantly behind poland in the transition of its government which may account for its inferior economic performance despite adopting similar economic reforms i argue that the lack of turnover of old communist politicians and the creation of inappropriate electoral and fiscal incentives for these politicians may account for the poor performance of the russian government and suggest some strategies for improving the situation

how to reform a planned economy lessons from china the countries of eastern europe and the former soviet union have been flooded with advice from the west on how to liberalize their planned econo mies this advice is unfortunately offered in an empirical vacuum no one knows how these econo mies will react to the proposed liberalization meas ures there exists however a neglected source of information china offers a long time series of data over a decade s worth on the effects of reforms on a planned economy china s reforms were gradual but their cumulative effect has been large and they have been remarkably successful china s experiments provide some practical les sons on what kinds of reforms can work elsewhere the dominant school of thought among economists favours the big bang policy of reforming quickly and according to a comprehensive plan partial reforms in this view are useless they will be negated by the remnants of the planning system the proponents of big bang reform have been influential with poland czechoslovakia and rus sia announcing plans for a rapid transition to capi talism