occupational downgrading and upgrading in britain the willingness of workers to move down an occupational hierarchy is a potentially important source of flexibility in the labour market but relatively little is known about the scale or pattern of occupational up and downgrading this paper examines who downgrades and the cyclical structure of up and downgrading we find that occupational downgrading is surprisingly large relative to flows into unemployment individuals who have a high payoff to skilled work such as educated workers are less likely to downgrade contrary to expectations the rate of downgrading is found to be greater in the boom while upgrading follows the more conventional expectation of also being procyclical this finding is interpreted as evidence consistent with the rationing of jobs in the downgrading process contrary to the assumptions of simple dual labour market models

indexed versus nominal government debt under inflation and price level targeting this paper presents a dsge model in which long run inflation risk matters for social welfare optimal indexation of long term government debt is studied under two monetary policy regimes inflation targeting it and price level targeting pt under it full indexation is optimal because long run inflation risk is substantial due to base level drift making indexed bonds a better store of value than nominal bonds under pt where long run inflation risk is largely eliminated optimal indexation is substantially lower because nominal bonds become a relatively better store of value these results are robust to the pt target horizon imperfect credibility of pt and model calibration but the assumption that indexation is lagged is crucial a key finding from a policy perspective is that indexation has implications for welfare comparisons of it and pt

the new pattern of regional unemployment causes and policy significance in common with most oecd countries unemployment in britain has differed significantly between regions but the persistence of relative regional unemployment rates in britain has been until recently particularly striking however during the i990 93 recession the relative regional unemployment pattern changed significantly for the first time in seventy years our primary purpose here is to understand these recent changes and to examine what might be learned about the contribution of economic policies to the amelioration of both regional unemployment rate differentials and the amplitude of regional unemployment cycles finally we ask whether there are any policy lessons to be drawn from the recent cycles in regional unemployment patterns which might provide insight into the amplitude of macro economic cycles

pollution claim settlements under private information abstract the classical problem of resolving a nuisance dispute between a pollution generating firm and nearby residents is modelled here as a mechanism design problem we assume that the designer of the mechanism is the firm that it is uncertain about the actual losses suffered by residents and that the initial assignment of property rights is one where each resident is entitled to prevail we derive a profitmaximizing scheme under the individual rationality and incentive compatibility constraints and examine its properties it is shown that the outcomes it yields are sometimes inefficient moreover when many residents are affected by pollution and the degree of uncertainty with respect to the losses they suffer is large these inefficiencies become rampant

estimating uk regional price indices 1974 96 hayes p 2005 estimating uk regional price indices 1974 96 regional studies 39 333 344 this paper examines the behaviour and construction of regional expenditure indices published in the croner reward regional cost of living surveys for 1974 96 it identifies a number of problems in using these data as an appropriate deflator to the new earnings survey regional wages series in examining labour supply side decisions instead an alternative method with which to construct regional prices is recommended using a combination of data from croner reward from the published retail price index rpi and from the expenditure and food survey efs formerly known as the family expenditure survey whilst these new data suggest that regional inflation rates were not significantly different from one another over the sample period they point to an episode of increased regional price variation over the late 1980s and early 1990s this paper suggests that these alternative indices would be of interest when examin

life cycle asset accumulation and allocation in canada this paper documents the life cycle patterns of household portfolios in canada and investigates several hypotheses about asset accumulation and allocation inferences are drawn from the 1999 survey of financial security with some comparisons to earlier wealth surveys from 1977 and 1984 i find cross sectional evidence for asset decumulation at older ages when annuitized assets like pension wealth are included in the analysis i also find that the portfolio share of financial assets increases sharply with age while indicators of risk tolerance appear to decrease this is consistent with families desiring more liquid and less risky assets as they age jel classification d31 e21 g11 le cycle de vie de l accumulation et de l allocation des actifs au canada ce memoire documente le cycle de vie des portefeuilles des menages au canada et examine plusieurs hypotheses quant a l allocation et l accumulation des actifs on developpe certaines inferences a partir de l enquete sur la securite financiere de 1999 ainsi qu a partir des enquetes sur la richesse de 1977 et 1984 certains resultats pointent vers une decumulation des actifs avec l avancement de l ge quand on prend en compte dans l analyse les actifs annualises comme les rentes il semble aussi que la portion des debentures augmente dramatiquement avec l ge et que les indicateurs de tolerance de risque paraissent diminuer voila qui s arrime bien a un desir d avoir des actifs plus liquides et moins risques a mesure qu on vieillit

the regional transmission of uk monetary policy dow s c and montagnoli a 2007 the regional transmission of uk monetary policy regional studies 41 797 808 concerns have been raised in the media about a one size fits all monetary policy for the uk if there are diverse economic conditions in different regions then a unitary monetary policy cannot suit all the purpose of this paper is to explore this issue further by breaking it down into two separate issues first there is the more conventional way of considering the question in terms of the effect of a particular interest rate change on regions experiencing different economic conditions this requires a consideration of the nature and causes of regional economic disparities in the uk and how these might be affected by particular interest rate changes but there is further the question of how monetary policy is transmitted to the different regions the possibility is considered that there may be regional differences in how a particular monetary policy is translated into different financial

monk mortgages in a new keynesian model abstract there has been much interest recently in the role of household long term mortgage debt in the transmission of monetary policy this paper offers a tractable framework that integrates the long term debt channel with the standard new keynesian channel providing a tool for monetary policy analysis that reflects the recent debates in the literature as there is a nontrivial role in the model for both short and long term debt it provides a laboratory to investigate the effects of monetary policy operating not only through its current short term actions but also through expected persistent changes in its stance

inflation nominal portfolios and wealth redistribution in canada les ameliorations dont pourraient beneficier les regimes de politique monetaire font actuellement l objet d un debat public dans les pays caracterises par un taux d inflation bas et stable comme les etats unis et le canada ainsi le regime canadien de cibles d inflation est soumis en ce moment a un examen en profondeur

aggregate and welfare effects of redistribution of wealth under inflation and price level targeting abstract an unanticipated rise in the price level redistributes wealth from lenders to borrowers its size depends on the monetary policy regime as inflation targeting it and price level targeting pt have different implications for the price level path following price level movements the effects of an unexpected 1 price level increase are measured and assessed under both regimes overall the redistribution of wealth and the implied aggregate and welfare effects are larger under it than they are under pt the youngest the poorest and the government gain at the expense of the rest of the population and when the government gain is given to households as lump sum transfers the effects on gdp are negative and long lasting

two views of the geographic distribution of unemployment this paper investigates the extent to which equilibrium and disequilibrium explanations can account for unemployment rate differentials between cities it shows that shocks that disturb the steady state relationship among the unemployment rates of metropolitan areas tend to be eliminated by mobility within a single year it also shows that high unemployment areas tend to be those with attractive climates and amenities high wages and high unemployment insurance it argues that the main effect of government programs that create jobs in high unemployment areas will be to lure additional job seekers to those areas

on inflation as a regressive consumption tax abstract evidence on the portfolio holdings and transaction patterns of households suggests that the burden of inflation is not evenly distributed we build a monetary growth model consistent with key features of cross sectional household data and use this framework to study the distributional impact of inflation at the aggregate level our model economy behaves similar to standard monetary growth models within the representative agent abstraction inflation has however important distributional effects since it is effectively a regressive consumption tax thus neglecting the distributional consequences of inflation may prove misleading in assessing the effects of inflation in our economy

asymmetric volatility spillovers between uk regional worker flows and vacancies this paper investigates volatility spillovers between uk regional job finding job separation and vacancy rates employing a large bayesian logistic smooth transition vector autoregression var model we find high volatility spillovers between uk regional labour markets analyses of net spillovers show that in general shocks to job separation rates tend to spread into job finding and vacancy rates while vacancy rates are usually at the receiving end of shocks transmitted from the job separations and job findings to shed further light on the shock propagation mechanism we also look into more detailed matters such as the differences in spillovers between regions within the same regime and that of the same region but in different regimes

price level changes and the redistribution of nominal wealth across the euro area we document the presence of sizable distributional effects from unexpected price level movements in the euro area ea using sectoral accounts and newly available data from the household finance and consumption survey the ea as a whole is a net winner of unexpected price level increases with italy greece portugal and spain being the biggest beneficiaries and belgium and malta being the largest losers governments are net winners of inflation while the household hh sector is a net loser in the ea as a whole hhs in belgium ireland malta and germany incur the biggest per capita losses while hhs in finland and spain turn out to be net winners of inflation considerable heterogeneity exists also within the hh sector relatively young middle class hhs are net winners of inflation while older and richer hhs are losers as a result wealth inequality in the ea decreases with unexpected inflation although in some countries austria germany and malta inequality increases due to presence of relatively few young borrowing hhs we document that hhs inflation exposure varies systematically across countries with hhs in high inflation ea countries holding systematically lower nominal exposures

government finance in the wake of currency crises we address three questions i can classical models be reconciled with the fact that many crises are marked by high rates of depreciation and small increases in seignorage revenue ii what are the implications of different financing methods for post crisis rates of inflation and depreciation iii how do governments pay for the fiscal costs associated with currency crises to study these questions we use a general equilibrium model in which prospective government deficits trigger a currency crisis we then use our model in conjunction with fiscal data to interpret government financing in the wake of three recent currency crises korea 1997 mexico 1994 and turkey 2001

the welfare cost of inflation revisited the role of financial innovation and household heterogeneity notre analyse demontre que le ratio monnaie consommation augmente avec l ge des menages et decroit avec la consommation et que ce ratio a fortement augmente dans le contexte de tres bas taux d interet des dernieres annees nous elaborons un modele a generations imbriquees de la detention de monnaie pour des motifs de transaction dans lequel nous introduisons des effets d ge l utilisation de la monnaie augmente avec l ge des menages des effets de cohorte les jeunes generations font appel a des technologies financieres plus evoluees et des effets temporels les taux d interet nominaux influent sur la detention de monnaie

optimal monetary policy under incomplete markets and aggregate uncertainty a long run perspective abstract this paper examines the role of monetary policy in an environment with aggregate risk and incomplete markets in a two period overlapping generations model with aggregate uncertainty optimal monetary policy attains the ex ante pareto optimal allocation this policy aims to stabilize the savings rate in the economy by changing real returns of nominal bonds via variation in expected inflation optimal expected inflation is procylical and on average higher than without uncertainty simple inflation targeting rules closely approximate the optimal monetary policy

regional differences in mortgage demand and mortgage instrument choice in the uk koblyakova a hutchison n and tiwari p regional differences in mortgage demand and mortgage instrument choice in the uk regional studies this paper presents empirical evidence of regional variations in mortgage choice decisions within the uk s mortgage sector utilizing british household panel survey bhps data for the years 2001 2007 and 2008 the paper suggests that a household s decision to choose a variable rate mortgage is more likely to occur in areas with lower incomes and affordability rates such as northern england scotland and wales since variable rate mortgages are more sensitive to income and monetary policy shocks the disproportional distribution of variable contracts within the mortgage sector may have a differential impact on the regions

the cyclical sensitivity of regional employment and unemployment differentials gordon i r 1985 the cyclical sensitivity of regional employment and unemployment differentials reg studies 19 95 110 this paper examines inter regional variations in the cyclical sensitivity of employment and unemployment in the uk over the past thirty years it shows that the patterns for employment and for unemployment are quite different the cyclical sensitivity of unemployment is greatest in the high unemployment regions while that for employment is greatest in the more industrial regions it is argued that the primary reason for differences in the sensitivity of unemployment is not demand side factors but cyclical variations in labour mobility between regions lower mobility in periods of high unemployment reduces the effectiveness of inter regional supply adjustments and increases the variance of unemployment rates

distributional consequences of asset price inflation in the euro area we study the distributional consequences of housing price bond price and equity price increases for euro area households using data from the household finance and consumption survey hfcs the capital gains from bond price and equity price increases turn out to be concentrated among relatively few households while the median household strongly benefits from housing price increases the capital gains from bond price increases relative to household net wealth do not correlate with household net wealth or income bond price increases thus leave net wealth inequality largely unchanged in contrast equity price increases largely benefit the top end of the net wealth and income distribution thus amplify net wealth inequality housing price increases display a hump shaped pattern over the net wealth distribution with the poorest and richest households benefitting least with regard to the latter finding there exists considerable heterogeneity across euro area countries

the dynamic benchmarking of labour markets jones m k 2004 the dynamic benchmarking of labour markets reg studies 38 495 506 this paper investigates the potential role of benchmarking labour market performance at the regional level it focuses on how labour market comparison can be simplified using a single composite measure of performance whilst capturing the multi dimensional nature of labour market performance the issues that surround the development of a composite measure are discussed including the selection of domains indicators an appropriate benchmark and weights the possibilities of dynamic benchmarking for monitoring labour market performance are illustrated through a benchmark of the welsh labour market and the localities currently receiving objective 1 funding