boom bust cycle asymmetrical fiscal response and the dutch disease this paper investigates the changes in expenditure policy in oil exporting countries during boom bust in commodity price cycles and their implications for real exchange rate movements to do so we introduce a dutch disease model with downward rigidities in government spending to revenue shocks this model leads to a decoupling between real exchange rate and commodity export price movement during busts we test our model s theoretical predictions and underlying assumptions using panel data for 32 oil exporting countries over the period 1992 to 2009 results are threefold first we find that changes in current spending have a stronger impact on real exchange rate compared to capital spending second we find that current spending is downwardly sticky but increases in boom time and conversely for capital spending third we find limited evidence that fiscal rules have helped reduce the degree of responsiveness of current spending during booms in contrast we find evidence that fiscal rules are associated with a significant reduction in capital expenditure during busts while responsiveness to booms is more muted this raises concerns on potential adverse consequences of this asymmetry on economic performance in oil exporting countries

the effects of collective bargaining rights on public employee compensation evidence from teachers firefighters and police widespread public sector unionism emerged only in the 1960s as individual states opened the door to collective bargaining for state and municipal workers in this study the author exploits differences in timing of legislative reforms across states to construct estimates of the causal effects of public sector collective bargaining rights on pay benefits and employment for teachers firefighters and police perhaps surprisingly estimates that allow for state fixed effects and state specific trends show little effect on teachers pay benefits or employment despite significantly increasing union presence among teachers for firefighters the results show a substantial positive effect on wages for police the wage effect was more modest but the workweek was significantly shortened

property rights competition and depletion in the eighteenth century canadian fur trade the role of the european market pricing behavior at three hudson s bay company trading posts is examined in terms of a model of long run profit maximization of a depletable resource at fort churchill where the company acted as a monopsonist purchaser of furs from the indians rising european fur prices had little impact on prices paid to indians and beaver stocks in the hinterland were maintained at fort albany and york factory where the company faced competition from french traders prices at the posts were raised and the beaver was depleted these outcomes are consistent with optimal pricing behavior by the company the lack of well defined native property rights to the beaver was a crucial element

right to work laws free riders and unionization in the local public sector empirical models of local government unionization reveal substantial reductions in union membership due to right to work laws free riders rather than underlying antiunion sentiments are probably responsible because the unionization models include better measures of sentiments than right to work laws furthermore these laws reduce the probability that bargaining unions form by more than they reduce the probability that nonbargaining associations form in three of five local government functions these results also confirm the importance of free riders because union security clauses that prohibit free riders in states without right to work laws exist only in collective bargaining contracts

buffalo hunt international trade and the virtual extinction of the north american bison in the sixteenth century north america contained 25 to 30 million buffalo by the late nineteenth century fewer than 100 remained while removing the buffalo east of the mississippi took over 100 years the remaining 10 to 15 million buffalo on the great plains were killed in a punctuated slaughter lasting little more than ten years i employ theory international trade statistics and first person accounts to argue the slaughter was initiated by a foreign made innovation and fueled by a foreign demand for industrial leather european demand and american policy failure are jointly responsible for the slaughter on the plains jel f14 n51 n71 q57

contributions to canadian economic history the last 30 years the cliometric revolution that transformed economic history in the us in the 1960s was soon embraced by canadian economic historians many of the important issues surrounding canadian development remained the same the role of resources the place of international trade immigration capital accumulation and interactions with native americans among others but beginning in the 1960s and certainly over the last 30 years economic historians of canada have addressed them with the tools of modern economics both theoretical and empirical we highlight the recent work emphasizing not just the methods but also the fundamental ways our understanding of canadian history has been changed

news shocks in open economies evidence from giant oil discoveries this article explores the effect of news shocks in open economies using worldwide giant oil and gas discoveries as a directly observable measure of news shocks about future output the delay between a discovery and production is on average four to six years we first analyze the effects of a discovery in a two sector small open economy model with a resource sector we then estimate the effects of giant oil and gas discoveries on a large panel of countries our empirical estimates are consistent with the predictions of the model after an oil or gas discovery the current account and saving rate decline for the first five years and then rise sharply during the ensuing years investment rises robustly soon after the news arrives whereas gdp does not increase until after five years employment rates fall slightly and remain low for a sustained period

union membership in the united states 1973 1981 this paper reports estimates of union membership gathered from may current population surveys from 1973 to 1981 the authors present data by occupation industry selected states and smsas race gender and educational attainment the paper both extends and differs from that by freeman and medoff which presents unionism estimates for the private sector for 1968 75 to facilitate longitudinal analysis this paper reports three year moving averages of occupational and industry data and annual estimates of demographic classifications the data include public sector as well as private sector workers and they exclude workers not covered by the national labor relations act also the authors provide only union membership estimates not estimates on workers covered by union contracts this paper suggests that the percentage of all workers that are unionized in the united states remained fairly constant over the 1973 81 period

growth friendly fiscal rules safeguarding public investment from budget cuts through fiscal rule design abstract we study patterns of public investment behavior during fiscal consolidations in seventy five advanced and emerging economies during 1990 2018 and find that results differ significantly depending on fiscal rule design fiscal rules can be flexible meaning that they include mechanisms to accommodate exogenous shocks e g cyclically adjusted fiscal targets well defined escape clauses and differential treatment of investment expenditures or rigid meaning they establish numerical limits on fiscal targets without taking into account flexible features we find that in countries with either no fiscal rule or with a rigid fiscal rule a fiscal consolidation of at least 2 percent of gdp is associated with an average 10 percent reduction in public investment instead in countries with flexible fiscal rules the negative effect of fiscal adjustments on public investment vanishes which implies that flexible rules protect public investment during consolidation episodes the corollary is that the design of fiscal rules can add a growth friendliness dimension to the fiscal sustainability objective that has typically been the focus of fiscal rules in the past provided public investment is productive

the dutch disease a disease after all many third world oil producers are encountering serious problems in building up a diversified export base while west european oil and gas producers netherlands united kingdom are suffering a decline in their traded goods manufacturing sector induced by real wage pressures it is becoming increasingly clear that high but temporary oil revenues may be somewhat ora mixed blessing the quip of the economist notwithstanding the mechanism behind this unbalance is clear enough part of the oil revenues is spent on non traded goods which leads to a real appreciation i e a rise in the relative price of non traded goods in terms of traded goods this in turn draws resources out of the non oil traded sector into the non traded goods producing sector corden and neary 1982 van wijnbergen 1980 one may say that this is an efficient response to the increase in income from oil production the united kingdom mexico egypt simply should move into oil derived industries and non traded goods and forget about their manufacturing sector until oil reserves are exhausted however many developing countries are hesitant to take this advice after all the post world war ii success stories in economic development involve without exception countries that promoted their traded goods sector aggressively moreover it is a well established stylised fact that technological progress is faster in the traded non sheltered sectors of an economy than in the non traded sector balassa 1964 is an early reference considering the hypothesis that technological progress rather than taking place exogenously with the passage of time is a function of accumulated experience the concern of countries like egypt mexico or indonesia is much easier to understand since solow 1957 and denison 1962 it is known that capital accumulation explain only a small part of economic growth if most of economic growth is caused by learning by doing induced technologica

bargaining laws as a cause and consequence of the growth of teacher unionism this study analyzes state level data for 1959 78 to determine whether the rapid growth of teacher unionism during those years was primarily a result or a cause of the public sector bargaining laws adopted during the same period the author finds contrary to the view of some scholars that the enactment of laws requiring public sector employers to bargain with majority representatives of their employees was the single most important cause of the growth in the proportion of teachers covered by union contracts although the growth in teacher unionism in turn encouraged the adoption of some new or stronger bargaining laws this effect was relatively weak more important predictors of new bargaining laws included the extent of political patronage in a state and the bargaining laws adopted by neighboring states

good bad or ugly on the effects of fiscal rules with creative accounting abstract do fiscal rules lead to fiscal adjustment or do they encourage the use of creative accounting this question is studied with a model in which fiscal rules are imposed on measured fiscal variables which can differ from true variables because there is a margin for creative accounting the probability of detecting creative accounting depends on its size and the transparency of the budget the model studies the effects on fiscal policy of a budget rule separating structural from cyclical effects and examines how these effects depend on the underlying fiscal distortion and on the degree of transparency of the budget

asymmetric oil price shocks tax revenues and the resource curse abstract the paper proposes an asymmetric relationship between oil rents and institutions such that only positive oil windfalls adversely affect institutional quality and negative oil windfalls have no impact we test this theory empirically by studying the dynamics of institutional quality in russian regions we find that increases in tax revenues caused by exogenous positive oil price shocks do not change regional income but increase corruption and reduce regional democracy and governance quality declines in tax revenues from negative oil price shocks do not affect institutional quality but decrease regional income

public sector unions and municipal employment using 1980 data for a large sample of u s cities the author reexamines recent empirical findings of a positive association between public sector unionization and municipal employment several researchers have interpreted this correlation as evidence that public employee unions successfully exert political pressure to raise the demand for municipal services structural estimates of labor demand and the determinants of police and fire unionization reveal however that economies of scale in union formation are at least partly responsible for any positive association between public sector unionization and municipal employment the author concludes that previous studies overstate the amount of political clout wielded by municipal labor unions

bargaining laws and unionization in the local public sector this paper analyzes the effects of bargaining law characteristics on rates of unionization in over 10 000 local government departments representing five different government services that were without bargaining units in 1977 duty to bargain laws significantly increased the probability of bargaining union formation between 1977 and 1982 the results of the analysis reject the hypotheses that this effect reflects only underlying union strength the release of pent up demand for unionization or the transformation of nonbargaining unions into bargaining unions the changes in unionization attributable to duty to bargain laws are so large that they account for nearly all of the differences in average unionization rates between states with and without these laws

public sector earnings and the extent of unionization many studies have examined the influence of union density union members as a percentage of all workers on earnings in the private sector but few such studies have looked at the public sector using data from the 1991 current population survey this study estimates the determinants of earnings for state and local government employees in both the union and nonunion sectors the extent of public sector unionization appears to be positively correlated with earnings for both state and local government workers and for those covered and not covered by collective agreements although the effect for non covered employees is smaller than that for covered employees both effects are larger than those typically found in similar estimates for the private sector the authors also find that bargaining structure has some influence on earnings with the most consistent effect being a positive influence of arbitration on the earnings of local government workers

booming sector and de industrialisation in a small open economy this paper presents a theoretical analysis of the dutch disease the phenomenon whereby a boom in one traded goods sector squeezes porfitability in other traded goods sectors both by directly bi

the varieties of resource experience natural resource export structures and the political economy of economic growth many oil mineral and plantation crop based economies experienced a substantial deceleration in growth following the commodity boom and bust of the 1970s and early 1980s this article illustrates how countries dependent on point source natural resources those extracted from a narrow geographic or economic base such as oil and minerals and plantation crops are predisposed to heightened economic and social divisions and weakened institutional capacity this in turn impedes their ability to respond effectively to shocks which previous studies have shown to be essential for sustaining rising levels of prosperity analysis of data on classifications of export structure controlling for a wide array of other potential determinants of governance shows that point source and coffee and cocoa exporting countries do relatively poorly across an array of governance indicators these governance effects are not associated simply with being a natural resource exporter countries with natural resource exports that are diffuse relying primarily on livestock and agricultural produce from small family farms do not show the same strong effects and have had more robust growth recoveries

state collective bargaining laws and public sector pay using the public use microdata sample from the 2005 to 2015 american community survey the authors provide new evidence on how state collective bargaining laws affect public sector wages to isolat

do commodity price shocks weaken the financial sector this paper investigates the impact of commodity price shocks on financial sector fragility using a large sample of 71 commodity exporters among emerging and developing economies it shows that negative shocks to commodity prices tend to weaken the financial sector with larger shocks having more pronounced impacts more specifically negative commodity price shocks are associated with higher non performing loans bank costs and banking crises while they reduce bank profits liquidity and provisions to non performing loans these adverse effects tend to occur in countries with poor quality of governance weak fiscal space as well as those that do not have a sovereign wealth fund do not implement macroprudential policies and do not have a diversified export base these findings are robust to a battery of robustness checks

collective bargaining in small firms preliminary evidence of fundamental change this analysis of 481 negotiations in michigan over the period 1987 91 suggests that fundamental changes may have occurred recently in collective bargaining in small firms only 33 of the negotiations conformed to the traditional model of arm s length collective bargaining the balance involved either highly contentious or highly cooperative relations further in only one sixth 17 of the cases was the contract settled within one week before or after the contract expiration delays were more common and longer in negotiations in which settlements were implemented unilaterally by management over labor s objections than in cases involving strikes concessions figured prominently in the majority of the negotiations in the sample with a shift from wage to benefit concessions occurring during the period examined