indenture an institution for a credible commitment without extortion abstract the aim of kritikos and bolle kritikos a s bolle f journal of economic behavior and organization 34 1998 279 294 was to analyze the institution of the indenture game within today s institutional setting unfortunately holt bases his rejoinder on a historical occurrence with a different institutional context this explains why his rejoinder is inconsistent

the scope of mandatory bargaining a critique and a proposal this paper argues that the mandatory permissive distinction in the scope of the duty to bargain collectively should be abandoned in favor of a policy of classifying all lawful subjects as mandatory the author shows that in recent applications of the distinction by the nlrb and the courts many subjects of interest to labor have been declared within the exclusive control of management she argues that the rationales used by the board and the courts in these decisions are not compelling and the mandatory permissive distinction is even less convincing when its current application is compared to the criteria of an ideal scope of bargaining

inflation and reputation in many macroeconomic models with rational expectations optimal policy is time inconsistent and therefore announced policy may not be credible this paper models the government s credibility explicitly using kreps and wilson s analysis time consistent optimal government policy emerges as a sequential equilibrium in a repeated game this policy is at least as good as the inconsistent optimal policy and dominates the consistent policy when reputational effects are ignored thus the analysis resolves the problem of specifying a credible optimal policy in such models the results show why attempts to disinflate may lead to recession even with perfectly flexible prices this abstract was borrowed from another version of this item

social welfare cooperators advantage and the option of not playing the game the aa outline a model of how freedom to choose between playing and not playing particular pisoner s dilemma games can 1 increase social welfare and 2 provide relative gains to intending cooperators when cooperators are relatively more willing to play they will interact more frequently with each other and their pay off per encounter will be higher potentially higher than that of intending defectors the aa speculate about the cognitive processes that underlie this result

temporary stabilization a stochastic analysis abstract this paper develops a stochastic model of exchange rate based inflation stabilization in which agents have expectations of devaluation driven by a mixed diffusion jump process in a richer stochastic environment where a brownian motion drives the rate of devaluation and a poisson process determines the probability of devaluation we examine consumption and wealth equilibrium dynamics when a stabilization plan is implemented and contingent claims markets are unavailable we also assess the effects of exogenous shocks on consumption and welfare finally we use the proposed model to carry out a simulation experiment of the equilibrium dynamics

union wages and union decline evidence from the construction industry two well documented empirical findings are that unionized employees typically receive substantially higher compensation than their non union counterparts and that union representation in the united states has declined over time some observers have hypothesized a causal link between these two phenomena the achievement of a union wage premium they argue hastened union decline both by reducing union firms economic competitiveness and by inducing employers to adopt various union avoidance strategies using data from the current population survey and the census bureau s census of construction the authors test this hypothesis for the construction industry even in estimations that allow for a lagged response and incorporate a variety of controls they find no evidence that high union nonunion wage ratios in construction in the 1970s or 1980s resulted in lower union membership in 2000

the nlrb s deferral to arbitration before and after olin an empirical analysis the nlrb s 1984 decision in olin corporation established new guidelines making it more likely that the board and its regional offices would defer in unfair labor practice cases to the prior decisions of arbitrators in those cases analyzing case file data in two nlrb regional offices for the january 1983 june 1985 period the author questions the validity of some assumptions underlying the olin decision and raises concerns about the consequences of the decision she finds that the two offices frequently deferred to and infrequently dissected arbitral opinions even before olin and that subsequently the percentage of cases deferred rose even higher furthermore following olin the board s division of advice promulgated and at least one of the two regional offices apparently adopted an inferential form of analysis that may compromise the statutory rights of charging parties particularly individual charging parties

industrial relations performance economic performance and qwl programs an interplant analysis this study analyzes the relationship among plant level measures of industrial relations performance economic performance and quality of working life programs the analysis employs pooled time series and cross section data from 18 plants within a division of general motors for the years 1970 79 the empirical results show strong associations between industrial relations and economic performance measures and limited support for the hypothesis that quality of working life efforts improve both kinds of performance

the argentine stabilization plan of december 20th abstract in this paper an analytical model is developed to incorporate the essential characteristics of the stabilization plan implemented in argentina in january 1979 the model is based upon a set of simplifying assumptions that only approximate the complexity of the real world it is assumed that the expectations of inflation and the degree of excess demand or supply in the non traded goods market are the main intermediate determinants of the rate of inflation in that market the rate of change of prices of traded goods being determined by the external inflation together with the rate of devaluation treating thus the external rate of inflation as exogenous the only instrument available for influencing the rate of inflation in the long run is the rate of devaluation since the model assumes a fixed exchange rate regime the money supply is endogenous and hence unsuitable as an instrument of economic policy

institutional pressures and ethical reckoning by business corporations prior studies have provided explanations for the presence use and dissemination of codes of corporate ethics or codes of corporate conduct of business corporations most such explanations are functional in nature and are descriptive as they are derived from the codes and their associated documents we search for more underlying explanations using two complementary theories first social contract theories explaining the exogenous and endogenous reasons of organizational behavior and then institutional theory explaining why organizations take similar measures in response to institutional pressures based on our explanations we contend that the codes and their use and dissemination are arising from underlying social and institutional pressures for firms to continuously validate their existence in the face of increasing changes and recurrent uncertainties

exchange rate management intertemporal tradeoffs exchange rate management is possible only if the government pursues consistent monetary and fiscal policies the authors constructa model in which the real consequences of exchange rate management depend on the precise time pattern of these policies the authors study the constraints on feasible policies and the comparative dynamics of disinflation by means of exchange rate targeting theoretical results are consistent with exchange rate managed disinflation attempts in argentina chile and israel copyright 1987 by american economic association

exchange rate based inflation stabilization the initial real effects of credible plans abstract this paper studies the initial effects of exchange rate based stabilization programs within a dynamic general equilibrium model of a small open economy in which inflation acts as a tax on intermediate transactions and capital accumulation is subject to convex adjustment costs and gestation lags the model replicates the typical pattern of slow inflation convergence sustained real exchange rate appreciation trade balance deterioration and expansion in domestic spending followed by a deflationary slowdown without resorting to sticky prices imperfect credibility or adaptive expectations calibrated versions of the model are compared with the initial effects of the argentine convertibility plan of april 1991

the confines of stakeholder management evidence from the dutch manufacturing sector stakeholder theory is a pertinent example of a framework that has been stretched over many conceptual contexts and that has been applied to a wide variety of empirical phenomena a pressing issue involves the scope of application of stakeholder theory however because it is not a comprehensive ethical scheme or problem solving algorithm we begin our search for the boundaries of stakeholder management by identifying a presently under acknowledged yet major underlying assumption notably that the approach is rooted in voluntary action and association building on this presumption we argue that firm stakeholder relationships are best to be understood in contractualist terms i e as voluntary arrangements between two or more parties seeking mutual benefit this assertion subsequently allows us to identify three boundary conditions applying to stakeholder theory 1 the parties should be sufficiently autonomous 2 their interests need to be alignable and 3 they should be capableof living up to their commitments we substantiate these criteria with evidence from a collective case study of buyer supplier relationships in the dutch manufacturing sector demonstrating that the stakeholder management model fails when these boundary criteria are violated

general equilibrium effects of investment incentives in mexico mexico has experimented with several tax instruments designed to promote private capital formation among such initiatives were general and industry specific tax credits employment tax credits and corporate tax credits the authors examine relative efficacy of such instruments using a dynamic computable general equilibrium model they carry out model simulations using three equal yield investment incentive scenarios increases in investment tax credits increases in employment tax credits and an equivalent reduction in the corporate tax rate the authors present outlines of the tax policy environment with model details and they highlight alternate tax incentives regimes conclusions and summary results are provided by the authors

on exchange rate stabilization abstract this paper extends calvo s 1986 and obstfeld s 1985 analyses of stabilization policies through predetermined exchange rates in a few directions the graphic and analytical techniques used here make it possible to perform a variety of policy experiments under a general utility function and in the presence of a consumer durable good or under time nonseparable preferences it also shows that the dynamic process of exchange rate stabilization exhibits hysteresis effects that is the steady state behavior of the economy depends on the initial condition and a temporary stabilization policy has a permanent effect on the economy

the evolutionary stability of cooperation is cooperation without central authority stable if so how robust is it despite what might be the conventional wisdom the evolution of cooperation did not solve this problem deductively in fact results obtained later by others seem to have contradicted the book s main message reexamining this exceptionally influential work yields a new picture part of axelrod s evolutionary story turns out to be false but the main intuition that retaliatory strategies of conditional cooperation are somehow advantaged proves correct in one specific and significant sense under a standard evolutionary dynamic these strategies require the minimal frequency to stabilize hence they support the most robust evolutionary equilibrium the easiest to reach and retain moreover the less efficient a strategy the larger is its minimal stabilizing frequency hobbesian strategies of pure defection are the least robust our main theorems hold for a large class of games that pose diverse cooperation problems prisoner s dilemma chicken stag hunt and many others

shareholder value stakeholder management and social issues what s the bottom line we test the relationship between shareholder value stakeholder management and social issue participation building better relations with primary stakeholders like employees customers suppliers and communities could lead to increased shareholder wealth by helping firms develop intangible valuable assets which can be sources of competitive advantage on the other hand using corporate resources for social issues not related to primary stakeholders may not create value for shareholders we test these propositions with data from s p 500 firms and find evidence that stakeholder management leads to improved shareholder value while social issue participation is negatively associated with shareholder value copyright 2001 john wiley sons ltd

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

the effectiveness of monetary policy anchors firm level evidence analyses of monetary policy posit that exchange rate pegs inflation targets and central bank independence can help anchor private sector inflation expec tations yet there are few direct tests of this argument we offer cross national micro level evidence on the effectiveness of monetary anchors in controlling private sector inflation concerns using firm level data from eighty one countries approximately 10 000 firms we find evidence that international anchors exchange rate commit ments correlate significantly with a substantial reduction in private sector concerns about inflation while domestic anchors inflation targeting and central bank inde pendence do not our conjecture is that private sector inflation expectations are more responsive to exchange rate anchors because they are more transparent more con straining and more costly than domestic anchoring arrangements the literature on monetary policy highlights the role of monetary institutions in stabilizing private sector inflation expectations central bank independence cbi inflation targeting it and fixed exchange rates pegs are widely viewed as insti tutions that have the capacity to mitigate private sector concerns that policymak ers will exploit them after they have locked in their price wage and investment decisions while other empirical research explores the institutional correlates of inflation and its variability yielding mixed results we use firm level data in our study to directly assess the impact of monetary anchors on private sector inflation concerns we find evidence that pegs mitigate firm owners concerns with infla tion but that domestic anchors such as it and cbi are uncorrelated with our micro indicators of inflation expectations considerable research has investigated the use of it cbi and pegs as institu tions that establish monetary policy credibility whereas these anchors are expected

importing credibility through exchange rate pegging this paper employs an optimal taxation framework in order to study the credibility of monetary policy making in an open economy since inflation is in part uncontrollable due to stochastic disturbances the authority s actions cannot be monitored perfectly when the exchange rate floats thus implying that reputational forces may become ineffective in contrast pegging the nominal exchange rate to a low inflation currency allows perfect monitoring because the exchange rate is in principle controllable for this reason exchange rate pegging may import credibility and result in the best reputational equilibrium even though the authority retains the discretion to devalue unexpectedly

accounting for the decline in union membership 1950 1980 this study analyzes the components of the post 1950 trends in the share of the private work force organized by unions which rose from 1950 to 1954 and then fell steadily to 1980 the authors decompose the sources of growth and decline into changes in organizing activity success in certification elections losses from decertification elections and net growth due to economic causes the last a residual measure designed to capture the effect of factors such as plant closings layoffs and new hires they find that all factors except decertifications accounted for a substantial part of the decline since 1954 when the level of aggregate economic activity is held constant loss of membership due to other economic causes shows no downward trend a finding that challenges the view that the decline in the unionized share of the work force has been due primarily to a secular decline in employment in the strongly unionized industries

the exceptional decline of the american labor movement this paper adopts a historical new institutionalist perspective to explain why the decline of the american labor movement has been exceptional in comparison to other labor movements and especially its canadian counterpart under this perspective national founding conditions and traditions become embedded in institutional norms that shape national institutional environments and trajectories substantially constraining labor movements and hence accounting for their development and future the author argues that the founding conditions of the united states gave rise to mobilization biases biases affecting the various parties relative ability to mobilize resources and thus ultimately privileging some interests over others that explain both why the labor movement developed as it did and why it has declined he concludes that in view of these biases and the norms underpinning them the american labor movement s future unlike the future of its european counterparts lies in perpetual struggle rather than

the dynamics of optimal gradual stabilizations inflation inertia may be quite tenacious because of the simultaneous interaction between policy actions and inflationary expectations under imperfect credibility this result is particularly relevant for understanding some of the failed efforts to stabilize inflation in south america this article deals with the issue of inertia in the framework of imperfect information about the type of the policymaker and extends the existing models to an infinite horizon because policymakers do not have perfect control of inflation a frivolous stabilizer may deviate from the policies of a serious stabilizer without necessarily being unmasked immediately when the difference in the ability of strong and weak policymakers to control inflation is large unexpected inflation may be persistently negative for quite a while thus causing reduced economic activity and giving the indication that credibility is low if the policymaker persists with the stabilization this pattern gradually disappears as his reputation rises but before this final stage the serious policymaker has to compromise his inflation objective in view of adverse expectation about this type and pay the cost of imperfect credibility

temporary stabilization predetermined exchange rates the paper analyzes the impact of a stabilization policy based on a temporary reduction in the rate of devaluation against a background in which a constant rate of devaluation has no real effects it is shown that the temporary policy does and furthermore that the real effects tend to become bigger in absolute value as the horizon of the temporary policy is shortened the central discussion is carried out in terms of a one good cash in advance model with perfect capital mobility and ramsey type consumers results are extended to account for home goods and variable velocity the roles of capital mobility and banking liberalization are briefly discussed

stabilization dynamics and backward looking contracts abstract exchange rate based stabilizations often result in an initial output expansion one explanation for this phenomenon has been that in the presence of inflation inertia a reduction in the nominal interest rate causes the domestic real interest rate to fall thus increasing aggregate demand this paper reexamines this issue in the context of an intertemporal optimizing model in contrast to previous results the analysis shows that if the intertemporal elasticity of substitution is smaller than the elasticity of substitution between traded and home goods a permanent reduction in the rate of devaluation leads to a fall in aggregate demand

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

domestic and external factors in the determination of the real interest rate the case of uruguay the high level of the real interest rates in the 1980s is not a phenomenon limited to small countries the united states and other industrial countries in europe have been confronted with a similar experience although numerous studies have aimed to explain the level of real interest rates within the framework of developed countries there is a lack of theoretical and empirical work about the determination of real interest rates in small open developing countries and about the process of transmitting variations in the real interest rates across countries

the political economy of monetary institutions in recent decades countries have experimented with a variety of monetary institutions including alternative exchange rate arrangements and different levels of central bank independence political economists have analyzed the choice of these institutions emphasizing their role in resolving both the time inconsistency problem and dilemmas created by an open economy this first generation work however suffers from a central limitation it studies exchange rate regimes and central bank institutions in isolation from one another without investigating how one monetary institution affects the costs and benefits of the other by contrast the contributors to this volume analyze the choice of exchange rate regime and central bank independence together and in so doing present a second generation of research on the determinants of monetary institutions the articles incorporate both economic and political factors in explaining the choice of monetary institutions investigating how political institutions democratic processes political party competition and interest group pressures affect the balance between economic and distributional policy objectives

ties that grind corroborating a typology of social contracting problems contractualism conceives of firm stakeholder relations as cooperative schemes for mutual benefit in essence contractualism holds that these schemes as well as the normative principles that guide and constrain them are ultimately ratified by the consent and endorsement of those subject to them this paper explores the empirical validity of a contractualist perspective on firm stakeholder relations it first develops a typology of firm stakeholder contracting problems it subsequently confronts this typology with empirical data collected in an interview study of concrete stakeholder management practices involving in depth research interviews with forty four managers working in the dutch financial services industry the findings of this theory building study suggest that there are limits to the applicability of the contract model in the context of stakeholder management and that disregarding either the model or its limitations may lead to highly ineffective firm stakeholder relations

union competition and strikes the need for analysis at the sector level international comparative research has found that strike incidence is higher where two or more unions bargain with an employer multi unionism as is common in most european countries than where only one union does all else equal two proposed explanations for this relationship both invoking inter union rivalry as the main dynamic are that under multi unionism unions a make propagandistic use of strikes to attract members or b compete with each other by bidding up bargaining demands to date the evidence bearing on these hypotheses has been equivocal because the author argues researchers have focused on activity at the national level rather than at the lower levels that are more commonly the nexus for strike formation the author performs empirical tests using industry sector level data for seven european countries for the years 1990 2006 and finds evidence clearly favoring the competitive bargaining hypothesis over the propaganda hypothesis

optimal accommodation by strong policymakers under incomplete information abstract this paper examines the optimal behavior of a policymaker who is able to precommit labelled strong when the public entertains the possibility that he is either strong or weak unable to precommit the main result is that in the presence of doubts about their type it is optimal even for strong policymakers to partially accommodate inflationary expectations this contrasts with vickers 1986 who finds that when strength is conceived in terms of the relative concern for employment the strong policymaker inflates less under incomplete than under full information the paper also provides a theory of endogenous announcements

resurrecting the weak credibility hypothesis in models of exchange rate based stabilization abstract we analyze how weak credibility affects the volatility of consumption spending in a model of exchange rate based stabilization that allows for both durable and nondurable goods the inclusion of durables greatly improves the explanatory power of the weak credibility hypothesis the hypothesis can account for the main qualitative properties of the boom bust cycle provided the elasticity of durables expenditure with respect to tobin s q is greater than the intertemporal elasticity of substitution moreover the quantitative effects are very large in numerical simulations based on conservative assumptions about the expenditure share of durables 20 and wealth effects none aggregate consumption increases 17 22 and the real exchange rate appreciates 24 26 when the crawl decreases from 100 to zero for 3 years in variants of the model that incorporate supply effects the consumption boom is equally strong but appreciation of the real exchange rate rises to 30 40

the mandatory permissive distinction and collective bargaining outcomes the authors use union contract and laboratory experiment data to assess whether the distinction between mandatory and permissive bargaining subjects affects collective bargaining outcomes in general the findings suggest that the distinction has an impact the contract analysis suggests that bargaining differs across contracts that include permissive items and contracts that exclude permissive items further an analysis of the potential impact of the distinction in a controlled setting indicates that unions negotiate less favorable nonwage bargaining outcomes when an issue s legal status is permissive or unknown than when it is mandatory

living in agreement with a contract the management of moral and viable firm stakeholder relationships in a contractual firm stakeholder relationship the participants are expected to act according to the agreement and for mutual benefit by acting against the agreement at the expense of the other participant however may result in higher individual profits within a short period of time building on the unlocked iterated prisoner s dilemma pd setting scanlon s scanlon t m 1998 what we owe to each other belknap press of harvard university press cambridge mass version of contractualism and the social dilemma literature this article considers what types of behaviors should be followed by both parties in an established firm stakeholder relationship in order to reach an outcome that is defensible both in terms of morality and viability it is argued that a normative foundation which advises firms and stakeholders to ground their behavior on principles that could not reasonably be rejected by others forms a basis for moral and viable behavior that can be expressed in the form of a strategic rule that excludes defection and utilizes the option to exit in response to the other participant s defection then a set of testable propositions is developed that describe how a firm and its stakeholders can further promote moral and viable relationships

checks and balances private information and the credibility of monetary commitments the authors develop and test several new hypotheses about the anti inflationary effect of central bank independence and exchange rate pegs in the context of different institutions and different degrees of citizen information about government policies theory provides strong reason to believe that while central bank independence will prove more effective as a commitment mechanism in countries where multiple players in government have veto power checks and balances the number of veto players will have no effect on the credibility of exchange rate pegs conversely the authors argue that central bank independence does not solve the problems of commitment that arise when citizens are imperfectly informed about the contribution of government policy to inflation exchange rate pegs however mitigate these problems the authors present extensive evidence from cross country tests using newly developed data that provide strong support for their propositions

evolution and kantian morality what kind of preferences should one expect evolution to favor we propose a definition of evolutionary stability of preferences in interactions in groups of arbitrary finite size groups are formed under random matching that may be assortative individuals preferences are their private information the set of potential preferences are all those that can be represented by continuous functions we show that a certain class of such preferences that combine self interest with morality of a kantian flavor are evolutionarily stable and that preferences resulting in other behaviors are evolutionarily unstable we also establish a connection between evolutionary stability of preferences and a generalized version of maynard smith s and price s 1973 notion of evolutionary stability of strategies

ethics in finance and public policy the ibercorp case our research has found that companies which have diverged from traditional management in order to adopt strategies which include ethics cooperation and a joint vision of management obtain a greater added value the new challenges of competitiveness require a position of active cooperation between firms and their suppliers which should be considered as collaborators rather than adversaries an active cooperation management may well allow the company to improve the quality of its products and its image speed up delivery to its clients and make its production and trading more agile thus enhancing the perception the client has of the product an improved ethical quality in our dealings generating trust improving communication and establishing long term relationships with joint added value results in higher competitiveness and greater creation of wealth

conflicting statutory purposes another look at fifty years of nlrb law making the author describes how in 1947 congress incorporated two conflicting statements of purpose in taft hartley a restatement of the wagner act s policy of encouraging collective bargaining and a new statement stressing the rights of individual employees and making no mention of collective bargaining as a result the author argues both liberal and conservative boards can justify their policies by choosing between the taft hartley act s inconsistent statements of intent the author s analysis draws on the language and histories of the wagner and taft hartley acts the comments of seven former chairmen of the nlrb who attended a conference at cornell commemorating the 50th anniversary of the board and the wagner act interviews with several of those chairmen and writings by former chairmen

united nations global compact the promise performance gap the united nations global compact ungc was created in 2000 to leverage un prestige and induce corporations to embrace 10 principles incorporating values of environmental sustainability protection of human rights fair treatment of workers and elimination of bribery and corruption we review and analyze the gc s activities and impact in enhancing corporate social responsibility since inception first we propose an analytical framework which allows us to assess the qualities of the ungc and its principles in the context of external and internal elements that influence code effectiveness and implementation second we analyze ungc performance in encouraging companies to become signatory members and bring about demonstrable change in corporate csr sustainability activities in its 10 year report ungc has proclaimed growth in both membership and program activity however all credible and publicly available data and documentation conclusively demonstrate that the ungc has failed to induce its signatory companies to enhance their csr efforts and integrate the 10 principles in their policies and operations the result has been a loss of public trust and support of ungc from important constituencies among civil society organizations and those individuals and groups adversely impacted by corporate activities and resultant negative externalities this diminished credibility has also made ungc largely dependent on the corporate sector for its very survival we conclude that this dependence has in turn impaired and would continue to hinder ungc s ability to fulfill its mission such an outcome raises serious questions as to the viability usefulness and continued existence of ungc

on the credibility of alternative exchange rate regimes abstract most anti inflation plans have used a nominal exchange rate anchor even though many other variables can serve this role the conventional wisdom is that an exchange rate anchor imposes more macroeconomic discipline than other anchors though theory does not yet provide any clear reason why this is so we explain the link between an exchange rate anchor and discipline with a model that assumes that the public can monitor the nominal exchange rate more easily that it can the other variables in our model a barro gordon game of incomplete information with imperfect monitoring we show that serious stabilizers prefer more visible anchors such as the nominal exchange rate we also show that in some circumstances serious stabilizers will choose to fix the exchange rate even when fixed exchange rates have some costs such as diminished capabilities to respond to external shocks

company delistings from the un global compact limited business demand or domestic governance failure while a substantial amount of the literature describes corporate benefits of corporate social responsibility csr initiatives the literature is silent concerning why some companies announce csr initiatives yet fail to implement them the article examines company delistings from the un global compact delistings are surprising because the csr agenda is seen as having won the battle of ideas the analysis proceeds in two parts i first analyze firm level characteristics focusing on geography while controlling for sector and size i find that geography is a significant factor while small firms are more likely to be delisted than large firms and some sector characteristics determine delistings next i proceed to uncover country level characteristics including the degree of international economic interdependence as well as the quality of governance institutions multivariate regression analysis shows that companies are less likely to be delisted from countries where domestic governance institutions are well functioning to a lesser extent i find that firms from countries with international economies are more willing to comply with the un global compact requirements countries with a high share of outward fdi capita have a lower share of delisted firms as do countries that are internationally competitive

help harm or avoid on the personal advantage of dispositions to cooperate and punish in multilateral pd games with exit abstract simulated round robin tournaments are used 1 to assess the relative performance of non defecting conditionally cooperative programs in a three person pd setting where exit is possible pdes and 2 to assess the importance of sanctions for the success of joint enterprises we find that the possibility of exit allows individuals to escape from dysfunctional teams which increases the potential benefits of cooperation while reducing those associated with free riding we also find that punishment especially targeted punishment is critical to the success of shorter term enterprises similar results held in evolutionary settings where successful behavioral programs can be imitated or propagated by non rational biological or social processes our results suggest that non defecting programs of conditional cooperation can be rational average payoff maximizing strategies for participating in small multilateral settings where individuals can choose to participate in a pd game or not

exchange rate based stabilizations under real frictions the role of endogenous labor supply abstract this paper studies exchange rate based stabilization programs in the context of a model of a small open economy where labor supply is endogenous agents derive utility from both consumption and leisure in environments where consumption is subject to a cash in advance constraint a cut in the rate of devaluation lowers the nominal interest rate and hence alters the optimal mix of consumption and leisure the paper shows that in the presence of adjustment costs of investment a perfectly credible cut in the devaluation rate causes simultaneously a consumption and output boom a cumulative current deficit a sustained real appreciation of the domestic currency and an increase in labor supply over time it is also shown that an imperfectly credible stabilization program in this environment would have effects similar to the perfectly credible program but generate richer dynamics such as an initial boom in output followed by a recession which begins prior to the end of the program the model has clear welfare implications in that permanent reductions in inflation are unambiguously welfare enhancing

transparency reputation and credibility under floating and pegged exchange rates this paper shows that if the cost of importing foreign inflation and real exchange rate shocks are not too high then the equilibrium nominal exchange rate regime for a country with a credibility problem is a peg under which credibility is higher and inflation is lower than under a float this holds true although devaluations of the pegged rate are assumed to be costless the reason is that as realized inflation is not perfectly controllable planned inflation under a float is private information in contrast since the exchange rate can be perfectly controlled pegging resolves the private information problem is more transparent and makes reputation more effective

reputation in a model of monetary policy with incomplete information abstract previous models of rules versus discretion are extended to include uncertainty about the policymaker s type when people observe low inflation they raise the possibility that the policymaker is committed to low inflation type 1 this enhancement of reputation gives the uncommitted policymaker type 2 an incentive to masquerade as the committed type in the equilibrium the policymaker of type 1 delivers surprisingly low inflation with corresponding costs to the economy over an extended interval the type 2 person mimics this outcome for awhile but shifts eventually to high inflation this high inflation is surprising initially but subsequently becomes anticipated

exchange rate regimes and independent central banks a correlated choice of imperfectly credible institutions theory and empirical evidence show that low inflation is a precondition for economic growth independent central banks and fixed exchange rates are institutional mechanisms that help keep inflation low by lending monetary policy credibility to governments however the two institutions are commonly analyzed as substitutes that tie the hands of inflation prone governments thus the literature has difficulties describing why governments would adopt both institutions and the interaction between them this paper presents a model that allows policymakers the simultaneous choice of monetary institutions and shows that imperfectly credible institutions will overlap when exchange rates are fixed but adjustable and central bank independence is not fully ascertainable governments choose both institutions more generally the paper generates hypotheses about the conditions that make fixed exchange rates and independent central banks complements or substitutes thus contributing to an explanation of the diversity of global monetary institutions in the post bretton woods period

cooperation in strategic games revisited for two person complete information strategic games with transferable utility all major variable threat bargaining and arbitration solutions coincide this confluence of solutions by luminaries such as nash harsanyi raiffa and selten is more than mere coincidence staying in the class of two person games with transferable unility the article presents a more complete theory that expands their solution specifically it presents 1 a decomposition of a game into cooperative and competitive components 2 an intuitive and computable closed form formula for the solution 3 an axiomatic justification of the solution and 4 a generalization of the solution to games with private signals along with an arbitration scheme that implements it the objective is to restart research on cooperative solutions to strategic games and their applications jel codes c71 c72 c78 copyright 2013 oxford university press

exchange rate proclamations and inflation fighting credibility if governments choose economic policies that often run counter to their public commitments are those commitments meaningless we argue that govern ment proclamations can be critical in signaling economic policy intentions we focus on the realm of exchange rate policy in which countries frequently implement an exchange rate regime that differs from the officially declared regime we argue that the official exchange rate regime is one of the most important signals of a government s economic policy preferences when a government makes a de jure public commit ment to a fixed exchange rate it sends a signal to domestic and international markets of its strict monetary policy priorities in contrast a government that proclaims a floating exchange rate signals a desire to retain discretion over monetary policy even if it has implemented a de facto fixed rate we use data on 110 developed and devel oping countries from 1974 to 2004 to test two hypotheses first that governments that adopt de facto fixed exchange rates will experience less inflation when they back up their actions with official declarations and second that governments that abide by their commitments as demonstrated by a history of following through on their public declarations of a fixed exchange rate regime will establish greater inflation fighting credibility within developing countries democratic institutions enhance this credibility results from fixed effects econometric models provide strong support for our hypotheses

policy fundamentals interest rates differential and expected devaluation in the presence of an active crawling peg system abstract one of the most interesting theoretical issues that comes up from the analysis of the tablita period in the southern cone economies argentina chile and uruguay is the interpretation of why interest rates on domestic currency loans were much higher than the rate on foreign currency loans adjusted for devaluation of the domestic currency even though the rate of devaluation was set by the monetary authorities six months ahead and published in a little table tablita this was particularly puzzling in the case of uruguay which had practically perfect capital mobility we show that the reason rational economic agents were willing to pay high domestic interest rates rather than borrowing in foreign currency was that they realized that policy fundamentals were inconsistent with the sustainability of the exchange rate policy using data for uruguay we show that a second systematic component of expectations of devaluation is what we call the policy risk factor and modeled as a function of the fiscal and monetary variables jel 41 31

varieties of capitalism and job quality the attainment of civic principles at work in the united states and germany this article explores how institutional differences matter to the quality of a nation s jobs job quality is conceived as a dimension of a national economy s social performance and thus defined in accordance with civic principles focus is on the two archetypical varieties of capitalism the united states and germany using data from a 2009 telephone survey of u s and german workers we find that the overall attainment of civic principles as perceived by workers is no different in germany than in the united states even though the german institutional environment should be more conducive to them this is due to higher worker expectations in germany and a tendency for employer practices to compensate for the weaker liberal institutional environment in the united states once these are controlled german workers report substantially more positive outcomes we find that institutional differences also matter in how various employer practices are adopted and hence have indirect as well as direct implications

deja vu all over again the mexican crisis and the stabilization of uruguay in the 1970s abstract comparing the 1978 1982 uruguayan stabilization with the 1990 1994 mexican experience reveals that exchange rate based stabilization tends to increase the economy s vulnerability to unexpected shocks an exchange rate rule with full capital mobility can only succeed if compatible financial policies are strictly adhered to even when severe negative shocks take place and if reliance on persistent capital inflows is not essential this requires monetary restraint even under serious recessionary conditions and tight fiscal policies to moderate interest rates the epilogues of both experiences demonstrate that abandoning the exchange rate rule in the wake of a shock even if inevitable makes future stabilization more difficult

modern hyper and high inflations since 1947 hyperinflations by cagan s definition in market economies have been rare much more common have been longer inflationary processes with inflation rates above 100 percent per annum based on a sample of 133 countries and using the 100 percent threshold as the basis for a definition of very high inflation episodes this paper examines the main characteristics of such inflations among other things we find that i close to 20 percent of countries have experienced inflation above 100 percent per annum ii higher inflation tends to be more unstable iii in high inflation countries the relationship between the fiscal balance and seigniorage is strong both in the short and long run iv inflation inertia decreases as average inflation rises v high inflation is associated with poor macroeconomic performance and vi stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary

endogenous growth cycles current explanations why a growing economy necessarily goes through periods of high and low growth predict countercyclical r d investment as this is very controversial from an empirical perspective a stochastic poisson model of endogenous growth cycles is presented where the determinants of the cyclical behaviour of r d investment are analytically studied providing an explicit expression for the expected length of a cycle shows that high frequency fluctuations can indeed be understood by this approach it is also shown how small technological improvements translate into large aggregate fluctuations

the united nations global compact as a facilitator of the lockean social contract the united nations global compact ungc has difficulties in attracting new voluntary members and inciting them to implement its ten principles the present article analyzes this implementation deficit from the perspective of lockean social contract theory and derives new strategies for reducing it on this view the ungc presents itself as the attempt to realize a set of moral norms typically enforced by an impartial minimal state protecting its citizens from violations of their natural rights negative externalities and discrimination by bribed officials it will only succeed in facilitating the realization of those norms on a strictly voluntary basis if it manages to overcome the underlying n person prisoner s dilemma this requires the existence of a critical mass k n of conditionally moral firms which are willing to observe the ungc principles and to resist the temptation to free ride on their observance by others if it does not disadvantage them in comparison to their situation in a state of universal non observance four contracting problems can impede the conclusion of this lockean social contract the ungc has a slim chance of overcoming its implementation deficit on a non coercive basis by cultivating four institutional capabilities assisting conditionally moral firms in surmounting those four problems of voluntary norm compliance

inflation stabilisation and the consumption of durable goods exchange rate based stabilisations in chronic inflation countries have often been characterised by an initial consumption boom which is most evident in the behaviour of durable goods followed by a later contraction this paper provides an explanation for such a boom recession cycle based on the timing of purchases of durable goods the initial fall in inflation results in a wealth effect which induces many consumers to bring forward their purchases of durable goods thus generating an aggregate consumption boom since most consumers replenish their stock of durable goods at the beginning of the programme a later slowdown follows

the eyes of the needles a sequential model of union organizing drives 1999 2004 this paper models three stages of the union organizing drive using a new dataset covering more than 22 000 drives that took place between 1999 and 2004 the correlated sequential model tracks drives through all of their potential stages holding an election winning an election and reaching first contracts only one seventh of organizing drives that filed an election petition with the nlrb managed to reach a first contract within a year of certification the model which controls for the endogeneity of unfair labor practice ulp charges finds that a ulp charge was associated with a 0 smaller cumulative chance of reaching such a contract ulp charges had less effect on the votes cast than on the decision to hold an election and the ability to reach a first contract a sequential model such as this one could be extended to test between some competing theories about the determinants of union organizing

the paretian liberal paradox and ecological economics abstract two of the most basic considerations in collective choice are the pareto principle and some minimal protection of individual rights in his impossibility theorem sen 1970 shows that there is a potential inconsistency between preference sovereignty as expressed by the pareto condition and the protection of minimal rights a liberal or liberty condition the paretian liberal paradox plp and the extensive debate surrounding it prompts serious reconsideration of the traditional welfare economics approach the critique of welfarism made by the plp is of central importance for environmental issues given pervasive externalities missing markets uncertainty and potential irreversibilities making collective choice decisions on these issues may require using explicit non utility information and restricting individual preference sovereignty we explore the implications of the plp for long term environmental policy and the transdisciplinary field of ecological economics as a simple pedagogical device relying on sparse principles the plp stimulates an increased awareness of the potential conflict between preferences and rights recognition of the plp focuses attention on what counts as admissible information in collective choice rules for example consideration of the plp illuminates differences in the informational requirements of alternative sustainability concepts

the scope of bargaining and bargaining outcomes in the public schools this study examines state to state variations in the legality of bargaining over class size in public schools to determine first whether these variations in the legal scope of bargaining bear any relationship to actual class sizes and second whether these variations are indirectly associated with teachers salaries using a model of the quality of education to analyze data from the 1977 census of governments on 4 851 independent school districts the author concludes that restrictions on class size bargaining are associated with both larger student teacher ratios and higher teachers salaries he also finds that the availability of voluntary arbitration and the limited right to strike are related to lower student teacher ratios

where have all the union members gone this paper examines trends in union membership during the twentieth century the hypothesis is advanced that the provision of certain social welfare benefits by government substitutes for the private provision by unions thereby reducing the attractiveness of union membership the empirical implications of this hypothesis are examined using time series data on aggregate union membership for the period 1904 80 and using pooled state data for the period 1964 80 these latter data are used to examine the effect of departures from the traditional doctrine of employment at will both the time series and the cross section evidence suggest that government supply of union like services reduces union membership