asymmetric shocks and monetary policy in a currency union we analyze the conduct of monetary policy in a currency union in the face of asymmetric shocks in particular we compare the stabilization properties of a currency union versus alternative exchange rate arrangements the relative performance of a currency union is shown to depend on the extent of economic integration in patterns of consumption and production and on the relative weights placed on price stability versus employment stability in the monetary authority s objective function jel classification f33 f40

stabilization policy in a currency union abstract we show that the monetary authority of a currency union chooses to do nothing in the face of an asymmetric shock generating inefficiently high inflation and employment fluctuations in the member countries moreover adjustment is equivalent to that under a mckinnon rule

is the european community an optimal currency area optimal taxation versus the cost of multiple currencies the authors propose a view of optimal currency areas that is based on the principles of public finance inflation taxes are distortionary and an optimal spreading of tax distortions may require high inflation in one region and low inflation in another each region would need its own currency to do this on the other hand multiple currencies imply valuation and currency conversion costs which impede trade between regions this tradeoff is explored in the context of the european community s debate over a common currency using a two country variant of robert lucas and nancy stokey s cash in advance model copyright 1990 by american economic association

internal migration and urban employment in the third world for more than a decade michael todaros model has provided a widely accepted theoretical framework for explaining the massive flows of rural urban migration that are observed in many third world countries this paper however presents data amassed from a wide range of countries to highlight a crucial shortcoming of that model it will be shown that far from being general in nature the todaro approach is limited to explaining the movement of persons possessed of sufficient human capital to qualify them for modern sector employment the present work utilizes the perspective of the urban subsistence sector to develop a model that serves as a useful complement to that of todaro excerpt

a fundamental asymmetry of asymmetric shocks a simple n country specific factor type model with imperfectly mobile labour is developed it is shown that the effects of country specific productivity shocks hitting a small country have fundamentally asymmetric effects a positive shock will be accommodated by a moderate wage increase and sizeable in migration whereas a negative shock will be accommodated by a significant decrease in wages and moderate out migration it is argued that the results of the model are consistent with the recent irish experience the welfare effects of small economic fluctuations are also discussed c 2002 elsevier b v all rights reserved

large and small baseload power plants drivers to define the optimal portfolios despite the growing interest in small medium sized power plants smpp international literature provides only studies related to portfolios of large plants in infinite markets grids with no particular attention given to base load smpp this paper aims to fill this gap investigating the attractiveness of smpp portfolios respect to large power plant portfolios the analysis includes nuclear coal and combined cycle gas turbines ccgt of different plant sizes the mean variance portfolio theory mvp is used to define the best portfolio according to internal rate of return irr and levelised unit electricity cost luec considering the life cycle costs of each power plant carbon tax electricity price and grid dimension the results show how large plants are the best option for large grids while smpp are as competitive as large plants in small grids in fact in order to achieve the highest profitability with the lowest risk it is necessary to build several types of different plants and in case of small grids this is possible only with smpp a further result is the application of the framework to european oecd countries and the united states assessing their portfolios

the anatomy of corporate control directors shareholders and executive remuneration in giant us and uk corporations this paper provides a contemporary comparison of the anatomy of corporate contol in giant u s and u k corporations the comparison draws upon an analysis of share ownership executive remuneration board membership and the patterns of interlocking directorships the results are of significance not only for the managerialist hypothesis but also for the wider issues concerning the control and behavior of these giant corporations the evidence presented leads to some qualifications of the managerialist position furthermore the study identifies the potentially key role played by nonexecutiv e directors particularly where their board membership is associated with significant shareholdings of financial institutions copyright 1987 by oxford university press

board structure and executive pay evidence from the uk we examine the impact of board structure on executive pay for 1 880 uk public firms over the period 1983 2002 using panel data analysis first the proportion of non executive directors tends to decrease the rate of increase in executive pay whereas board size tends to increase it second the proportion of non executives strengthens the relation between the rate of increase in executive pay and changes in performance in particular although for firms in general the pay performance link is much weaker when performance is poor a higher proportion of non executives strengthens this link considerably finally firms that increase the number of nonexecutives in order to comply with the cadbury code of 1992 experience both a decline in the rate of increase in executive pay and an increase in pay performance sensitivity

heads i win tails you lose a career analysis of executive pay and corporate performance the paper utilises a novel career perspective to examine managerial theories of organisational control in the context of executive reward principal agent theory managerial power and neo institutionalism are evaluated detailed career histories of boardroom executives in all ftse350 companies between 1996 and 2008 are utilised using both a fixed effects panel and a career based approach rival hypotheses are tested in addition to the payperformance relationship the probability of job loss as a function of performance is also estimated the evidence presented points to the importance of institutional considerations in the standard agency theory and managerial power perspectives and lends support to a social theory of agency the analysis is empirical in nature and an effort is made to draw on qualitative studies to further flesh out the discussion the practical implications of the findings point to the inadequacy of existing arrangements to deliver efficient pay outcomes where performance is poor whilst highlighting dangers of relying on naive policy remedies that ignore the role played by institutional forces in their implementation also highlighted is the distinct advantage of boards adopting a cumulative or career oriented approach when evaluating executive performance from a policy perspective the case is made for truly long term incentives in the form of career shares

the emergence of migration theory and a suggested new direction abstract the literature on internal labour migration is surveyed using a fourfold taxonomic scheme the potential migrant as presented in the existing literature can be viewed as a supplier of labour an investor in human capital and a consumer of regional amenities such as public goods the paper develops a fourth approach which treats the household rather than the individual as the migrating unit and which views the potential migrant as a producer of home produced commodities the continuities as well as the contrasts between the four approaches are discussed in the paper

bargaining a monetary union abstract two governments bargain over the benefits of a monetary union in a cash in advance world a novel feature of the model is that because households trade every period market behavior affects and is affected by the government negotiations as a result in addition to objective costs of delay market expectations about the bargaining outcome emerge as crucial determinants of a monetary union there is a continuum of bargaining outcomes indexed by market expectations some outcomes imply that the monetary union is delayed for an arbitrary number of periods journal of economic literature classification numbers f4 c7

stochastic dominance and expected utility survey and analysis while stochastic dominance has been employed in various forms as early as 1932 it has only been since 1969 1970 that the notion has been developed and extensively employed in the area of economics finance agriculture statistics marketing and operations research in this survey the first second and third order stochastic dominance rules are discussed with an emphasis on the development in the area since the 1980s

fuel mix diversification incentives in liberalized electricity markets a mean variance portfolio theory approach monte carlo simulations of gas coal and nuclear plant investment returns are used as inputs of a mean variance portfolio optimization to identify optimal base load generation portfolios for large electricity generators in liberalized electricity markets we study the impact of fuel electricity and co2 price risks and their degree of correlation on optimal plant portfolios high degrees of correlation between gas and electricity prices as observed in most european markets reduce gas plant risks and make portfolios dominated by gas plant more attractive long term power purchase contracts and or a lower cost of capital can rebalance optimal portfolios towards more diversified portfolios with larger shares of nuclear and coal plants

total board remuneration and company performance using a hitherto neglected source of data this paper combines executive emoluments with executive options to construct a broader measure of executive pay than has been possible in earlier british studies the result of including the long term share option component of pay along with the more commonly utilized short term component of emoluments is to reveal executive pay as being significantly more sensitive to company performance than has previously been thought to be the case the paper questions the current policy stance of british institutional investors and of the greenbury committee with respect to executive share options copyright 1996 by royal economic society

participation in a currency union in any voluntary cooperative agreement the potential gain from deviation should determine the minimum influence required over common decision making this paper begins by observing that a highly asymmetric distribution of power between two partners is not sustainable if the choice variables are strategic substitutes it then studies a simple general equilibrium model of a monetary union and shows that a small economy will not take part in the agreement unless it can secure influence that is more than proportional to its size and a transfer of seigniorage revenues in its favor copyright 1992 by american economic association

monetary and fiscal policies interaction in monetary unions in this paper the literature on the interaction between monetary and fiscal policies in a monetary union is surveyed by adopting the concept of symbiosis as a starting point the paper highlights the importance of uncertainty policy makers preferences and targets then the role of commitment to policy rules and coordination is addressed the analysis also focuses on the importance of the data considered for the generation of the policy mix as a final step the paper discusses the main results in the literature on public debt management in a monetary union all the reported theoretical results are then adopted to retrieve policy and institutional implications for the european monetary union

free riding convergence and two speed monetary unification in europe this paper shows that two speed monetary unification carries a danger low inflation countries in europe have an interest in delaying entry of the high inflation country because it would raise the average inflation rate however this country might refuse to join when the first group find it qualified to that is when convergence has taken place this is because the high inflation country can employ its monetary policy to stabilize against shocks given that the currency union members have optimally chosen a lower inflation rate hence a tradeoff exists between the necessity for convergence and the free rider problem

institutional investment mergers and the market for corporate control the increasing importance of institutional investors as shareholders in individual companies has led to an important debate on their impact on corporate performance in this paper we focus on their role in the market for corporate control this has so far been the subject of very little systematic investigation despite its theoretical and practical significance we consider the impact of financial institutions using two u k merger samples and employing both univariate and multivariate techniques of analysis in the first sample drawn from the low merger period 1981 1983 pre and post merger differences are found between merging companies with and without a significant institutional presence however in the takeover boom year of 1986 from which the second sample is drawn all such distinctions become blurred

the consequences of interregional labor migration for the regional labor market theory methodology and dutch experience an important problem of interregional migration is whether migrants fulfill vacancies which could also have been filled by native unemployed it is argued that this problem could adequately be analyzed by means of ex post comparison of both categories with regard to age education family status and work experience in a dutch case study this comparison has been made by means of logistic regression and the results have been cross validated the migrants are found to have superior labor market characteristics the implications of this finding for some migra tion theories and regional policy are discussed

establishing a central bank issues in europe and lessons from the us list of figures list of tables preface list of conference participants 1 introduction part i the design of a central bank 2 designing a central bank for europe a cautionary tale from the early years of the federal reserve system 3 the european central bank reshaping monetary politics in europe 4 the ecb a bank or a monetary policy rule part ii transition from national central banks to a european central bank 5 hard erm hard ecu and european monetary union 6 voting