strikes and holdouts in wage bargaining theory and data we develop a private information model of union contract negotiations in which disputes signal a firm s willingness to pay previous models have assumed that all labor disputes take the form of a strike yet a prominent feature of u s collective bargaining is the holdout negotiations often continue without a strike after the contract has expired production continues with workers paid according to the expired contract we analyze the union s decision to strike or hold out and highlight its importance to strike activity strikes are more likely to occur after a drop in the real wage or a decline in unemployment

on cross border bank credit and the u s financial crisis transmission to equity markets this paper examines the role played by cross border equity bond and bank credit flows versus international trade in the transmission of the u s financial crisis to equity markets worldwide we estimate vector autoregressive models with exogenous global factors using monthly data on 36 emerging and developed countries the results from an eclectic methodology that includes causality tests generalized impulse responses and forecast error variance decompositions indicate that the crisis is mostly transmitted through bank credit rather than portfolio flows and international trade the results are robust to altering the exogenous versus endogenous vectors of variables to measuring equity prices in u s dollars or local currency to averaging the data across countries versus averaging the parameters from individual country estimation and to redefining the start date of the crisis the findings endorse the use of banking regulation and capital controls as part of the policy toolkit to limit financial vulnerability

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

bilateral portfolio dynamics during the global financial crisis abstract there has been considerable bilateral variation in the pattern of portfolio capital flows during the global financial crisis for a given destination investors from different countries adjusted their holdings to different degrees we show that the size of the initial bilateral holding geographical distance common language the level of trade and common institutional linkages help to explain the pattern of adjustment these bilateral factors are more important for equities than for bonds and for investors from developing countries than for investors from advanced countries

cyclical fluctuations in strike activity using a set of data on contracts and strikes for the period 1970 81 the author distinguishes among the roles of aggregate business conditions labor market conditions and product market conditions in the determination of strike incidence and duration strike incidence is found to be highest in industries that are depressed relative to the rest of the economy but in regions with low unemployment this finding is consistent with the theory that the cost of a strike to a firm increases with the demand for its product and the cost of a strike to the union increases with unemployment another finding however is that strikes are longest in industries that are booming relative to the rest of the economy

a context based procedure for assessing participatory schemes in environmental planning the efficiency of participatory schemes in environmental planning is an emerging research area and many issues are not solved yet regarding the assessment of such procedures it is essential for decision makers to identify improvement opportunities of participatory schemes we propose an original procedure to address such issue through a bargaining model from the signaling game literature which accounts for participation design as well as for agents preferences beliefs and bargaining power the model is calibrated using qualitative data from surveys in french local communities involved in municipal solid waste management model simulations are used to test for assumptions on the stakeholder dialogue and explore sensitivity of game outcomes to structural parameters we propose a set of performance indicators to identify the most effective participatory schemes in achieving convergence in stakeholder positions regarding environmental and land use planning

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

are workers paid their marginal products status is like coase s social costs a reciprocal phenomenon given that one person s gain in status can occur only at the expense of a loss in status for others and that workers are free to choose their coworkers it follows that the competitive wage structure within a firm must be one in which individual wage differences understate individual differences in marginal products the purpose of this paper is to examine a variety of empirical evidence that relates to this proposition about the firm s internal wage structure the paper is organized as follows section i briefly summarizes the theoretical considerations that govern competitive wage determination when status matters to people and firms are viewed as voluntary associations of workers section ii then confronts the predictions of section i by examining pay and productivity schedules for a group of sales occupations for which these schedules are relatively easily observed section ii also examines the relationship between wages and productivity for a sample of university professors an occupation in which individual productivity differences are for a variety of obvious reasons relatively more difficult to measure all of the evidence examined is consistent with the hypothesis that within firms wage rates vary substantially less than do individual productivity values section iii discusses additional observations and evidence that bear on this same hypothesis it suggests that the implicit market for status may strongly influence the ways in which firms are organized to carry out the tasks they perform section iv concludes by considering the claim that egalitarian internal wage structures arise because of equity considerations it argues that the concept of equity appears very closely linked to the concept of status and suggests a strategy for assigning monetaty value to the equity considerations that so often dominate public policy decisions

strikes wages and private information private information models of strikes suggest that the strike is used as an information revealing device by the union in the presence of asymmetrical information a testable prediction of these models is that there is a negative relationship between strikes and the unpredicted component of the wage this paper finds evidence of such a relationship in a large sample of u s labor contracts the real wage falls by about 3 percent after a strike lasting one hundred days copyright 1989 by american economic association

the great moderation in international capital flows a global phenomenon abstract this paper highlights a recent great moderation in global capital flows characterised by smaller volumes and lower volatility of cross border transactions however there are substantial differences across countries and regions which we analyse by comparing the level of international capital flows observed in 2005 06 immediately prior to the onset of the global financial crisis to the post crisis period of 2013 14 when global flows arguably settled at a new normal we find that since the pre crisis period gross capital inflows recovered more for economies with smaller pre crisis external and internal imbalances lower per capita income improving growth expectations a less severe impact of the global financial crisis and less stringent macroprudential policy on the asset side countries with a more accommodative monetary policy a milder impact of the crisis and oil exporters managed to increase gross capital outflows in the post crisis period

fickle capital flows and retrenchment evidence from bilateral banking data abstract we empirically examine the response of cross border capital flows to economic uncertainty using bilateral banking flow data we show that while banks reduce their exposure to a foreign country when it becomes more risky they tend to increase their exposure to their home country in bad times a retrenchment to further understand this puzzle we examine how the differential response to foreign and domestic uncertainty is affected by country specific characteristics bilateral characteristics and crises our analysis suggests that most of the current theories based on either information asymmetries between foreign and domestic investors or institutional risk cannot explain bilateral data well on the other hand our results show that global crises have an asymmetric impact on the risk attitudes of banking institutions towards country specific uncertainty global crises make investors more risk averse towards foreign uncertainty but have no effect on the responsiveness to domestic uncertainty

information incentives and contract timing patterns a prominent feature of wage contracting in the united states is the bunched timing pattern that is often associated with the process of pattern bargaining the model describes the bunching of wage contracts as the equilibrium outcome of decentralized decisions in an economy composed of both competitive and monopolistically competitive product markets agents time their wage adjustment to take advantage of the information associated with the timing decisions of others this information based motive leads to staggered contracting a bunching equilibrium requires the presence of heterogeneous product markets and occurs because the information transmitted by contracting agents differs across the market structures copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

hot money in bank credit flows to emerging markets during the banking globalization era this paper investigates the relative importance of hot money in bank credit and portfolio flows from the us to 18 emerging markets over the period 1988 2012 we deploy state space models a la kalman filter to identify the unobserved hot money as the temporary component of each type of flow the analysis reveals that the importance of hot money relative to the permanent component in bank credit flows has significantly increased during the 2000s relative to the 1990s this finding is robust to controlling for the influence of push and pull factors in the two unobserved components the evidence supports indirectly the view that global banks have played an important role in the transmission of the global financial crisis to emerging markets and endorses the use of regulations to manage international capital flows

the direction of wage spillovers in manufacturing this study develops a model of wage behavior for both union and nonunion workers in the u s manufacturing sector and tests that model with separate union and nonunion wage change series covering the period 1960 to 1978 the empirical results support the traditional view that union wage behavior influences or spills over into nonunion wage changes but not vice versa these results are of particular interest because they contrast sharply with an earlier study by flanagan that reported an opposite spillover effect flanagan s results are shown to be quite sensitive to the choice of model specification and data period

mexico s balance of payments crisis a chronicle of a death foretold this paper claims that the roots of mexico s balance of payments crisis are found in the prevailing high degree of capital mobility and financial globalization under these circumstances shifts in foreign capital flows and anticipation of a banking system bailout may produce large imbalances between stocks of financial assets and foreign reserves threatening the sustainability of currency pegs econometric analysis suggests that half of mexico s reserve losses could be accounted for by these phenomena large financial imbalances are also fertile ground for self fulfilling prophesy crises which lead devaluations to produce deep recessions these difficulties can be partly remedied by appropriate policies

logit estimates of strike incidence from canadian contract data logit estimates of strike incidence are made based on a unique and comprehensive data set of 2 437 collective agreements the appropriate level of aggregation since that is where bargaining occurs the results are interpreted through a theoretical framework emphasizing that strikes are more likely when the joint costs of using the strike mechanism are low relative to the cost of alternative mechanisms for achieving the same purposes such functions of strikes are to generate information elicit truth telling establish reputations provide catharsis and solve intraorganizational conflict

strategic delay in bargaining with two sided uncertainty the role of strategic delay is analyzed in an infinite horizon alternating offer model of bargaining a buyer and seller are engaged in the trade of a single object both bargainers have private information about their own preferences and are impatient in that delaying agreement is costly an equilibrium is constructed in which the bargainers signal the strength of their bargaining positions by delaying prior to making an offer a bargainer expecting large gains from trade is more impatient than one expecting small gains and hence makes concessions earlier on trade occurs whever gains from trade exist but due to the private information only after costly delay panmunjom korea upi the american general and the north korean general glared at each other across the table and the only sound was the wind howling across the barren hills outside their hut maj gen james b knapp negotiator for the united nations command unc was waiting for maj gen ri choonsun of the democratic people s republic of north korea to propose a recess they sat there arms folded for 42 hours not a word finally gen ri got up walked out and drove away evening bulletin philadelphia 11 april 1969

a theory of holdouts in wage bargaining holdouts the continuation of negotiations beyond the contract expiry date are the most common form of disputes in labor contract negotiations the authors model holdouts as a delaying tactic employed by unions to obtain information about other bargaining outcomes in their industry novel implications of their model include a positive association between holdout duration and the number of bargaining pairs negotiating contracts simultaneously bunching of holdout durations within these negotiating groups and fewer strikes among holdouts which end later in groups using a large panel of contract negotiations in canadian manufacturing the authors find considerable support for these predictions copyright 1998 by american economic association

repatriation of debt in the euro crisis with the beginning of the euro crisis the long standing trend of european financial integration reversed investors unwound cross border positions of debt obligations and increased holdings of locally issued debt in other words debt obligations were repatriated we use data on bank portfolios to document three new empirical regularities of the financial disintegration i repatriation affected mainly debt of crisis countries ii repatriation affected mainly public debt iii the public debt of crisis countries that was not repatriated was reallocated to large and politically influential countries within the euro area we read these results in light of standard theories of cross border portfolio allocation and argue that the sum of these patterns constitutes evidence for the secondary market theory of public debt

cyclical fluctuations in strike durations canadian data on strikes between 1946 and 1983 are used to estimate linear regression models for the logarithm of completed duration a thorough investigation of the influence of the business cycle reveals strong support for the hypothesis that strike durations are countercyclical the cyclical effect is shown to be robust to both the choice of cyclical variable and the econometric specification and the magnitude of the effect is quite substantial experimentation with different representations of the cycle reveals that it is difficult to improve on a simple formulation involving a single continuous variable

worker substitutability and patterns of unionisation a strategic three party bargaining model is developed in which one distinguished party the firm has to reac h agreements with the other two each of which is a group of workers in the prebargaining stage the two worker groups decide whether to organize jointly or separately the main observation relates the equi librium pattern of unionization to the substitutability in production between the two groups the outcome is joint or separate unions acco rding to whether the two groups are substitute or complementary facto rs of production the analysis also considers possibilities for firm s strategic intervention in the unionization process copyright 1988 by royal economic society

the repeated lake game abstract in common property ecological systems such as shallow lakes an increasing number of users leads to additional nash equilibria with considerably lower welfare when the game is repeated these bad outcomes can be turned into an advantage

legal harmonization institutional quality and countries external positions a sectoral analysis abstract motivated by the action plan for a european capital markets union cmu this paper analyzes the potential for legal harmonization and convergence in institutional quality to affect capital market integration based on hand collected data on the implementation of eu directives our analysis yields three key insights first legal harmonization promotes portfolio equity holdings second discrepancies in institutional quality matter primarily for cross border debt positions third the relationship between external investments and harmonization varies significantly across sectors the non bank financial corporations which account for a large share of portfolio positions react more to institutional harmonization than do banks and the non financial private sector

follow the money quantifying domestic effects of foreign bank shocks in the great recession the financial crises have focused consider able academic and policy attention on the roles of foreign banks in transmitting shocks and creating vulnerability for host or parent countries adverse consequences are presumed and a premise of their destabilizing behavior in particular surrounding the branches of foreign banks has taken hold global banks actively allocate funds across their banking organizations in normal times and in stress periods cetorelli and goldberg forthcoming during the great recession some for eign locations of us banks were core investment markets that continued as destinations for funding while other foreign locations served as core funding markets that would send even larger net flows to their parent banks following parent balance sheet disturbances cetorelli and goldberg 2011b in this paper we provide complementary evidence focusing on the perspective of a host country we analyze the activity of foreign banks

non cooperative bargaining and union formation we study a union formation decision problem when workers consist of two groups distinguished by different productivities workers may form either a joint union or two separate unions the whole decision process is modelled as an extensive form bargaining game workers form a joint union when the sizes or productivities of the groups are similar in the first case there is a wage differential which is more less than proportional to the productivity difference if the size of the more productive is smaller larger than that of the less productive in the second case there is no wage differential in this paper we study a union formation decision problem when workers consist of two groups distinguished by different productivities they may form either a joint union or two separate unions depending on the relative size and productivity of the two groups the whole decision process is modelled as an extensive form bargaining game in which the two groups of workers bargain with each other as well as with a firm the labour market is sharply distinguished from the goods market by the widespread practice of collective bargaining usually several groups of workers with different characteristics for example skill level or geographical location are represented as a single unit and or several employers form a single bargaining unit against a giant union this multiplicity of bargaining units creates a complicated bargaining structure and makes the outcome hard to analyse the purpose of this paper is to provide a model which captures this complexity and at the same time clarifies the underlying structure of bargaining power although economists have been aware of the multiplicity problem for a long time it has been received little rigorous theoretical treatment until recently davidson 1985 examined the possible gains that can be obtained by trade unions through joint bargaining in an oligopolistic industry there is a positive externality due to the fact that a higher wage rate in one firm generates a larger demand hence a higher wage in competing firms when a joint union is organized these externalities are internalized to the benefit of workers horn and wolinsky 1985 investigated the equilibrium pattern of unionization in an industry where a firm employs two types of workers they found that workers tend to form a single union when the two types are substitutes in the sense that the incremental contribution of one group to the firm s revenue is decreasing with respect to the size of the other group since workers bargaining power comes from the loss that they can

choosing the wrong pond social comparisons in negotiations that reflect a self serving bias we explore the role that choice of comparison groups plays in explaining impasse in teacher contract negotiations we hypothesize that the negotiators select comparable districts in a biased fashion such that teachers salaries in districts that unions view as comparable are higher than teachers salaries in districts that school boards view as comparable we also predict that strike activity is positively related to the difference in the salary levels of the unions and boards lists of comparables we test these predictions using a unique combination of subjective survey and field data on teacher contract negotiations in pennsylvania both hypotheses are supported by the data

a new database on the structure and development of the financial sector this article introduces a new database of indicators of financial structure and financial development across countries and over time the database is unique in that it combines a wide variety of indicators that measure the size activity and efficiency of financial intermediaries and markets it improves on previous efforts by presenting data on the public share of commercial banks introducing indicators of the size and activity of nonbank financial institutions and constructing measures of the size of bond and primary equity markets this article introduces a new database the first to provide comprehensive measures of the development structure and performance of the financial sector this database is the first to define and construct indicators of the size and activity of nonbank financial intermediaries such as insurance companies pension funds and non deposit money banks it is also the first to include indicators of the size of primary equity markets and primary and secondary bond markets in constructing the database authors carefully deflate measures and match stock and flow variables

globalization and the increasing correlation between capital inflows and outflows abstract the correlation between capital inflows and outflows has increased substantially over time in a sample of 127 advanced and developing countries we provide evidence that this is a result of an increase in financial globalization stock of external assets and liabilities this dominates the effect of an increase in trade globalization exports plus imports which reduces the correlation between capital inflows and outflows in the context of a two country model with 8 shocks we show that the theoretical impact of financial and trade globalization on the correlation between capital inflows and outflows is consistent with the data

uncertainty and cross border banking flows abstract while global uncertainty measured by the vix has proven to be a robust global push factor of international capital flows there has been no systematic study assessing the role of uncertainty in driving bilateral capital flows this paper examines the effects of higher country specific uncertainty on cross border banking flows using data from the bank for international settlements locational banking statistics the bilateral structure of this data allows disentangling supply factors from demand factors thereby helping identify the effect of higher uncertainty on cross border banking flows from other confounding factors the results of this analysis suggest that i uncertainty in a source country domestic economy is both a lender specific push and pull factor that robustly predicts a decrease in outflows cross border lending and inflows cross border borrowing ii the decline in cross border borrowing is larger than the decline in cross border lending that is the net cross border position of the banking sector increases iii despite a decline in cross border bank lending in the absolute sense the share of cross border bank lending in total bank lending increases suggesting a portfolio rebalancing iv this rebalancing occurs only when banks are lending to borrowers in advanced economies but not to those in emerging market economies

ride the wild surf an investigation of the drivers of surges in capital inflows over the past 15 years gross inflows to industrial and developing countries have enjoyed a wild ride after reaching record highs in the run up to the global financial crisis they collapsed dramatically in 2008 09 as signs of global recovery reappeared capital inflows resumed although at different speeds the recovery in flows was faster and sharper in developing countries this paper aims at understanding the domestic and external drivers of these surges in gross inflows using quarterly data for 67 countries from 1975 to 2010 it finds that domestic and external factors have significant explanatory power in driving surges of inflows this finding holds for the sample of industrial countries whereas domestic factors play a significantly larger role in explaining surges to developing countries zooming into the findings shows that a financial booms tend to attract massive capital inflows b surges to either industrial or developing countries are driven by regional contagion and c strong growth and natural resource abundance are keys to attract inflows of foreign capital into developing countries

on conflict over natural resources abstract this paper considers a game theoretic framework of repeated conflict over natural resource extraction in which the victory in each engagement is probabilistic and the winner takes all the extracted resource every period each contesting group allocates its capabilities or power between resource extraction and fighting over the extracted amount the probability of victory rises with fighting effort but a weaker group can still win an encounter the victorious group wins all of the extracted resources and converts them to power and the game repeats in one model groups openly access the resource in a variant of the model the stronger group can access a larger part of the resource than its rival while in a second variant of the model the advantage of the dominant group is made more decisive than in the first two models our models generate outcomes that mimic several aspects of real world conflict including full military mobilization defeats in one or repeated battles victories following defeats changes in relative dominance and surrender we examine comparative dynamics with respect to changes in the resource attributes resource extraction initial power allocation fighting capabilities and power accumulation the policy implications are evaluated and future research avenues are discussed

domestic credit growth and international capital flows during the pre crisis period europe experienced substantial cross country variation in domestic credit growth and cross border capital flows we investigate the inter relations between domestic credit growth and international capital flows during the period 1993 2008 with a special focus on the boom period of 2003 2008 we establish that domestic credit growth in european countries is strongly related to net debt inflows but not to net equity inflows this pattern also holds for an extended sample of 54 advanced and emerging economies

contagious cooperation temptation and ecosystem collapse real world observations suggest that social norms o f cooperation can be effective in overcoming social dilemmas such as the joint management of a c ommon pool resource but also that they can be subject to slow erosion and sudden collapse we show that these patterns of erosion and 15 collapse emerge endogenously in a model of a closed community harvesting a renewable natural resource in which individual agents face the tempta tion to overexploit the resource while a cooperative harvesting norm spreads through the community via interpersonal relations we analyze under what circumstances small changes in key parameters including the size of the community and the rate of technological progress trigger catastrophic transitions from 20 relatively high levels of cooperation to widespread norm violation causing the social ecological system to collapse

external adjustment and the global crisis abstract the period preceding the global financial crisis was characterized by a substantial widening of current account imbalances across the world since the onset of the crisis these imbalances have contracted to a significant extent in this paper we analyze the ongoing process of external adjustment in advanced economies and emerging markets we find that countries whose pre crisis current account balances were in excess of what could be explained by standard economic fundamentals have experienced the largest contractions in their external balance we subsequently examine the contributions of real exchange rates domestic demand and domestic output to the adjustment process allowing for differences across exchange rate regimes and find that external adjustment in deficit countries was achieved primarily through demand compression rather than expenditure switching finally we show that changes in other investment flows were the main channel of financial account adjustment with official external assistance and ecb liquidity cushioning the exit of private capital flows for some countries

current accounts and financial flows in the euro area abstract we construct a new database of bilateral financial flows among euro area countries and their major world partners and explore the role of financial links in the accumulation and then adjustment of current account imbalances in the euro area the data show that the geography of financial flows can differ quite markedly from trade flow patterns and suggest that the nexus between surpluses in the core with deficits in the periphery went along financial rather than trade interlinkages in particular the data document the dominant role of core countries in financing the euro area periphery s current account deficits before the financial crisis both directly and through intermediating financial flows from outside of the euro area most of this financing took the form of debt instruments following the withdrawal of private financing from core countries during the crisis the ecb mediated funding and other official flows helped the periphery to refinance its liabilities and smoothen the external adjustment

the great retrenchment international capital flows during the global financial crisis the current crisis saw an unprecedented collapse in international capital flows after years of rising financial globalization we identify the stylized facts and main drivers of this development the retrenchment in international capital flows is a highly heterogeneous phenomenon first across time being especially dramatic in the wake of the lehman brothers failure secondly across types of flows with banking flows being the hardest hit due to their sensitivity of risk perception and thirdly across regions with emerging economies experiencing a shorter lived retrenchment than developed economies our econometric analysis shows that the magnitude of the retrenchment in capital flows across countries is linked to the extent of international financial integration its specific nature with countries relying on bank flows being the hardest hit as well as domestic macroeconomic conditions and their connection to world trade flows gian maria milesi ferretti and cedric tille

an empirical test of an asymmetric information model of strikes recent developments in the theory of strategic bargaining demonstrate how informational asymmetries can lead to prolonged and costly bargaining these models can be applied to contract negotiations yielding an economic theory of strikes to date however few empirical tests of these models have been carried out in this paper a set of predictions concerning the incidence and unconditional duration of strikes is derived from a simple bargaining model in which the union is uncertain about the firm s future profitability these predictions are then tested on a micro data set of major u s contract negotiations that took place from 1973 to 1977

nonlinear behavior of the socio economic dynamics for lake eutrophication control abstract to succeed in combating lake eutrophication cooperation of local inhabitants small factories and farmers in reducing phosphorus discharge is very important but the willingness of each player to cooperate would depend on the cooperation of other players and on the level of environmental concern of the society in general here we study the integrated dynamics of people s choice of behavior and the magnitude of eutrophication assumptions are there are a number of players who choose between alternative options a cooperative and environment oriented option is more costly than the other the decision of each player is affected by social pressure as well as by economical cost of the options the lake pollution increases with the total phosphorus released and a high pollution level in the lake would enhance the social pressure the model includes a positive and a negative feedback loops which create diverse dynamical behavior the model often shows bistability having an equilibrium with a high level of cooperation among people and clean water and the other equilibrium with low cooperation and polluted water which are simultaneously stable the model also shows fluctuation between a high and a low levels of cooperation in alternating years cycle with a longer periodicity or chaotic fluctuation conservatism of people stabilizes the system and sometimes helps maintaining cooperation the system may show unexpected parameter dependence the improved phosphorus removing efficiency might make water more polluted if it causes the decline in the environmental concern and cooperation among people

fdi debt and capital controls abstract we examine the link between financial sector fdi flows banking debt flows and capital controls in emerging market economies during episodes of large gross capital inflows surges we find that fdi surges in the financial sector behave remarkably similar to surges in banking debt flows they are associated with boom bust cycles in gdp and expansions of credit in foreign currency unlike surges in fdi in the non financial sectors moreover global and contagion factors have a strong explanatory power in explaining surges in financial fdi and banking debt flows compared to surges in non financial sectors but capital controls have the opposite effect on the two types of flows restrictions on short term debt flows tend to decrease the likelihood of surges in banking debt flows but increase the likelihood of surges in financial sector fdi

waves of international banking integration a tale of regional differences abstract we propose an original measure of international banking integration based on gravity equations and a spline function on a panel of 14 countries and their 186 partners between 1999 and 2012 contrary to the conventional wisdom we uncover that 1 the international banking integration outside the euro area has been tenaciously increasing since 1999 and has even strengthened after the crisis 2 in contrast the international banking integration of the euro area has been cyclical since 1999 with a peak in 2006 and a complete reversal since then 3 this decline is not a correction of previous overshooting but a marked disintegration 4 outside the euro area the level of income does not affect the shape of banking integration

cross country causes and consequences of the crisis an update abstract we update rose and spiegel forthcoming rose and spiegel 2010 and search for simple quantitative models of macroeconomic and financial indicators of the great recession of 2008 09 we use a cross country approach and examine a number of potential causes that have been found to be successful indicators of crisis intensity by other scholars we check a number of different indicators of crisis intensity and a variety of different country samples while countries with higher income and looser credit market regulation seemed to suffer worse crises we find few clear reliable indicators in the pre crisis data of the incidence of the great recession countries with current account surpluses seemed better insulated from slowdowns

conflict between groups of players in coupled socio economic and ecological dynamics conflict among multiple groups is a major source of difficulty in environmental conservation people are often divided into various groups that have different social factors sometimes leading to differences in the degree to which they cooperate in environmental conservation this obstructs the social consensus needed to solve the environmental problems here we study the coupled dynamics of human socio economic choice and lake water pollution and examine the magnitude of the difference in cooperation levels between two groups in the model many players choose between a costly but cooperative option and a selfish option the former results in a reduced phosphorus discharge into the lake each player s choice is affected by an economic cost and social pressure social pressure is a psychological factor that promotes cooperation it becomes stronger when more players in the society are cooperative conformist tendency and when the problem at hand is a greater concern to society in the model two groups sometimes show large differences in their cooperation levels even when both have exactly the same social factors however cooperation levels are more likely to differ between groups that have different social factors enhancement of the cross group conformist tendency is the most effective way to minimize differences in cooperation levels and to mitigate conflict between groups

strikes and wages a test of an asymmetric information model this paper describes a simple model of labor disputes based on the hypothesis that unions use strikes to infer the profitability of the firm the model posits the existence of a negatively sloped resistance curve between wages and strike duration in addition it offer a series of predictions relating wage and strike outcomes to changes in the expected profitability of the firm and changes in the alternative opportunities of striking workers these implications are tested using data on wage outcomes strike probabilities and strike durations for a large sample of collective bargaining agreements

longitudinal analysis of strike activity this article presents an empirical study of strike activity in a panel of contract negotiations for some 250 firm and union pairs evidence is presented on two sources of variation in dispute rates changes in the characteristics of the collective bargaining agreement that affect subsequent strike outcomes and the effects of lagged strikes on the incidence and duration of subsequent disputes strike probabilities are significantly affected by the duration and expiration month of the previous agreement dispute rates are also increased by the occurrence of a short strike during the previous negotiations and reduced by the occurrence of a long strike

fdi productivity and financial development this paper examines the effect of foreign direct investment fdi on growth factor accumulation physical and human capital does not seem to be the main channel through which countries benefit f rom fdi instead we f ind that countries with well developed financial markets gain significantly

sequential bargaining with incomplete information this paper describes a simple two person two period bargaining game and solves it using the concept of perfect bayesian equilibrium in which the actions of each player convey information which is used by his opponent the paper examines the effects of changes in bargaining costs the size of the contract zone and the length of the bargaining process on such aspects of the solution as the probability of impasse and the likelihood of concessions the combination of information transfer and the lack of pre commitment embodied in perfectness yields many surprising results common perceptions about the effects of parameter changes on bargaining processes are suspect and should be checked in the particular game being discussed

financial instability reserves and central bank swap lines in the panic of 2008 in this paper we connect the events of the last twelve months the panic of 2008 as it has been called to the demand for international reserves in previous work we have shown that international reserve demand can be rationalized by a central bank s desire to backstop the broad money supply to avert the possibility of an internal external double drain a bank run combined with capital flight thus simply looking at trade or short term debt as motivations for reserve holdings is insufficient one must also consider the size of the banking system m2 here we show that a country s reserve holdings just before the current crisis relative to their predicted holdings based on these financial motives can significantly predict exchange rate movements of both emerging and advanced countries in 2008 countries with large war chests did not depreciate and some appreciated meanwhile those who held insufficient reserves based on our metric were likely to depreciate current account balances and short term debt levels are not statistically significant predictors of depreciation once reserve levels are taken into account our model s typically high predicted reserve levels provide important context for the unprecedented u s dollar swap lines recently provided to many countries by the federal reserve this abstract was borrowed from another version of this item

u s monetary policy and fluctuations of international bank lending abstract there is no consensus in the empirical literature on the direction in which u s monetary policy affects cross border bank lending we find robust evidence that the impact of the u s federal funds rate on cross border bank lending in a given period depends on the prevailing international capital flows regime and on the level of the two main components of the federal funds rate macroeconomic fundamentals and the monetary policy stance during episodes in which bank lending from advanced to emerging economies is booming the relationship between the federal funds rate and cross border bank lending is positive and mostly driven by the macroeconomic fundamentals component which is consistent with a search for yield behavior by internationally active banks in contrast during episodes of stagnant growth in bank lending from advanced to emerging economies the relationship between the federal funds rate and bank lending is negative mainly due to the monetary policy stance component of the federal funds rate the latter set of results is most pronounced for lending to emerging markets which is consistent with the international bank lending channel and flight to quality behavior by internationally active banks

synchronized deforestation induced by social learning under uncertainty of forest use value abstract deforestation often has been studied in terms of land use models in which natural processes such as ecological succession physical disturbance and human decision making are combined in many land use models landowners are assumed to make decisions that maximize their utilities however since human understanding of ecological and social dynamics is clouded by uncertainty landowners may not know true utility values and may learn these values from their experiences we develop a decision model for forest use under social learning to explore whether social learning is efficient to improve landowners decisions and can lead to effective forest management we assume that a forest is composed of a number of land parcels that are individually managed landowners choose whether or not to cut trees by comparing the expected utilities of forest conservation and deforestation landowners learn utility values not only from their own experiences but also by exchanging and sharing information with others in a society by analyzing the equilibrium and stability of the landscape dynamics we observed four possible outcomes a stationary forested landscape a stationary deforested landscape an unstable landscape fluctuating near an equilibrium and a cyclic forested landscape induced by synchronized deforestation synchronized deforestation which resulted in a resource shortage in a society was likely to occur when landowners employed a stochastic decision and a short term memory about past experiences social welfare under a cyclic forested landscape can be significantly lower than that of a stationary forested landscape this implies that learning and remembering past experiences are crucial to prevent overexploitation of forest resources and degradation of social welfare

learning in sequential wage negotiations theory and evidence when union firm pairs bargain sequentially and when unobserved components of firms abilities to pay are subject to correlated shocks unions that bargain later in a sequence can acquire valuable information by observing previous bargaining outcomes in their industry we derive the implications of this kind of learning in an asymmetric information model of wage negotiations and argue that the most robust implication is a lower incidence of strikes among followers than leaders in wage negotiations considerable empirical support for this implication is found in a long panel of canadian contract negotiations

reduced cross border lending and financing costs of smes abstract this paper investigates how the withdrawal of banks from their cross border business impacted the borrowing costs of european firms since the crisis we combine aggregate information on total and cross border credit with firm level survey data for the period 2010 2014 we find that the decline in cross border lending led to a deterioration in the borrowing conditions of small firms in countries with more pronounced reductions in cross border credit inflows the likelihood of a rise in firms external financing costs increased this result is mainly driven by the interbank channel which plays a crucial role in transmitting shocks to the real sector across borders