democratization and institutional change in mexico the logic of partial insulation this article builds on previous work examining the incentives facing authoritarian elites to use central bank reform to constrain the economic policy choices of future governments it suggests that because creating an autonomous agency is costly authoritarian elites will only cede policymaking powers to an independent body commensurate with the degree of democratic threat that they face when a transition is looming insulation should be complete so as to tie the hands of successor governments to the greatest extent possible but when this risk of replacement is milder incumbent elites will be careful to design rules that continue to afford them some margin of maneuver as long as they remain in office the mexican central bank reform of 1993 is used as an illustration of the partial insulation strategy at work

central bank independence a critical view from a developing country perspective abstract merely establishing an independent central bank may not bring about its professed benefits in developing countries with shallow financial markets where there is limited scope for a truly independent monetary policy the benefits of an independent central bank may be eroded by conflicts between fiscal and monetary policy and by inherent problems of central bank institutional design so that problems of dynamic inconsistency associated with monetary policy are not solved but merely transformed less developed countries wishing to establish a low inflation path should concentrate on instituting financial policy reforms that bolster opposition to inflation and institutional arrangements that force discipline on fiscal policy directly rather than indirectly through monetary policy

a critical assessment of measures of central bank independence the methodology of measuring central bank independence suggested by bade and parkin three decades ago and inverse correlations between the measures and inflation have been widely accepted the measurement literature has made important contributions identifying elements of institutional design that establish the relationship between the central bank and the government and the measurements from an ordinal perspective provide some useful insights about the major institutional redesigns of central banks during the past several decades at the same time the measurement literature is problematic first a dummy variable bifurcating central banks into groups of independent and less independent central banks can duplicate the standard correlations suggesting the information content of the specific measures is limited second the correlations between inflation and measures of independence are not as stable as claimed and most important the measurements are subject to classification problems that have not been fully appreciated review of the institutional design and history of the bank of korea bank of japan and the federal reserve provide evidence the classification problems are important the measures of independence are more appropriately regarded as ordinal rankings of central bank independence rather than considered cardinal measures suitable for econometric modeling jel e50 e58 e65

political institutions and central bank independence a cross country analysis using three quantitative measures of central bank independence we apply ols and tsls regression methods to investigate the possible correlation between political liberty political instability and central bank independence for a sample of western democracies and highly democratic developing countries we show that cukierman s legal independence index is positively correlated with political freedom and regime political stability it is negatively correlated with party political stability for a sample of developing countries that excludes dictatorships we show that a special index of legal central bank autonomy is positively associated with political freedom and political stability finally we observe that for the same sample of nations the turnover index of central bank independence is not sensitive to our political variables

rules and discretion with noncoordinated monetary and fiscal policies the time inconsistency of optimal monetary policy is due to the effects of tax distortions thus the issue of how to improve upon the time consistent suboptimal monetary policy is related to that of the coordination of monetary and fiscal policy we present a model with three players the central bark the fiscal authority and wage setters in which distortionary taxes are explicitly modelled we show that binding commitments to monetary rules are not necessarily welfare improving if monetary and fiscal policy are not coordinated we also examine the effects of different degrees of independence of the central bank

corruption a review as is increasingly recognised in academic literature and by international organisations corruption acts as a major deterrent to growth and development the aim of this survey is to organise and summarise existing theoretical and empirical work on corruption with a view to identifying opportunities for further research the paper begins with a brief overview of key definitions of corruption and then turns to a review of the factors that favour or deter the growth of corruption together with a brief look at related models this is followed by an examination of the consequences of corruption for society and the consideration of measures that might help to reduce corruption the paper ends with suggestions for future research and includes summaries of data sources and key variables for use in this research

central bank independence and public debt policy the various proposals for the institutional design of the european monetary union have drawn fresh attention to the link between monetary and public debt policies this paper explores the strategic interaction between fiscal authorities setting public debt and the central bank controlling monetary policy in the absence of political distortions an optimally designed conservative independent central bank is sufficient to establish the second best in the presence of political distortions or with coordination of monetary and fiscal policy however also a debt target is needed

who wants an independent central bank monetary policy making and politics the costs and benefits of cooperative monetary and fiscal policy are analysed in the framework of a partisan business cycles model it is shown that political parties with different ideologies prefer to choose different arrangements for macroeconomic policy making more specifically right wing parties favour independent central banks more than left wing parties an independent central bank is also the generally preferred option from a social welfare point of view in addition the form of policy making arrangements between the fiscal and monetary authorities is shown to influence the extent of partisan cycles

testing commitment models of monetary policy evidence from oecd economies in ation rates in a number of oecd follow a common trend over the past four decades in ation starts out low in the 1960s rises for a time before peaking in the 1970s or early 1980s and then falls back to initial levels this similarity in the behavior of trend in ation suggests that any explanation of long run in ation trends ought to apply across oecd countries ireland 1999 shows that a simple time inconsistency model of monetary policy modifled to allow for a time varying nairu can explain long run trends in u s in ation in this paper we show that this result cannot serve as an explanation of the common trend in oecd in ation as it flts the data only in the u s we investigate two important variants of the hypothesis i that time inconsistency was an important component of central bank behavior in earlier decades but has become less signiflcant in recent years and ii that time inconsistency problems drive u s in ation which afiects in ation rates in other countries as a result of central bankers attempts to manage nominal exchange rate movements vis a vis the u s dollar we flnd that the flrst hypothesis flts the data no better than the baseline model we flnd some support for the international spillovers version of the model but the behavior of non u s central bankers with respect to domestic unemployment rates is not well described by the time inconsistency mechanism

selling the family silver institutional entrepreneurship and asset disposal in the english housing association sector the purpose of this paper is to shed light on english housing associations asset management strategies through an analysis of strategic decisions to either dispose of or retain valuable property a

electoral governance matters explaining the quality of elections in contemporary latin america this article provides a systematic cross national analysis of the role of electoral administration in explaining acceptable democratic presidential elections in 19 countries in latin america since the year 1980 or the first pivotal transitional election the authors provide two alternative measures of election administration one focused on the degree of partisanship or professional independence and another on formal legal institutional independence as well as on other key factors to test partial proportional odds ordered logit models predicting the probability of an acceptable flawed or failed electoral process the results show an important positive role for professional independent electoral commissions on electoral outcomes in latin america controlling for other socioeconomic and political factors formal legal independence matters when the rules of the game are likely to be respected in addition low quality elections are found disproportionately where incumbents seek reelection and where vic

revenue decentralization and inflation a re evaluation abstract a problematic feature of the existing empirical literature on the relationship between revenue decentralization rd and inflation is the use of inaccurate measures for rd using a newly constructed measure for rd that accounts for over time changes in sub national tax autonomy this paper finds that rd leads to lower inflation

revenue decentralization and income distribution abstract due to varying local revenue collection capacities and interest group activities revenue decentralization rd may lead to increased inequality this paper provides empirical evidence however that if coupled with good governance rd could improve income distribution

the cyclicality of the opportunity cost of employment the flow opportunity cost of moving from unemployment to employment consists of forgone public benefits and the forgone consumption value of nonworking time we construct a time series of the opportunity cost of employment using detailed microdata and administrative or national accounts data to estimate benefits levels eligibility take up consumption by labor force status hours taxes and preference parameters the opportunity cost is procyclical and volatile over the business cycle the estimated cyclicality implies far less unemployment volatility in leading models of the labor market than that observed in the data irrespective of the level of the opportunity cost

further evidence on revenue decentralization and inflation abstract results from a panel regression study of 19 oecd member countries suggest that when the measure of revenue decentralization is limited to the revenues over which sub national governments have full autonomy its impact on inflation is not statistically significant

who chooses to inflation target abstract in this article we seek what are the factors behind a country s decision to move to inflation targeting we find that high past inflation low debt levels and the absence of a nominal exchange rate anchor increase the probability that a country will end up opting for it

changes in job instability and insecurity using monthly survey data this article provides evidence on changes in short term job instability and insecurity using the survey of income and program participation monthly measures from this data set are contrasted with annual measures from the survey of income and program participation and the panel study of income dynamics neither data set shows an increase in job turnover during the 1980s and 1990s we also examine indicators of increased insecurity these include the probability that a job ends involuntarily is followed by a spell of nonemployment or that the subsequent job has lower wages these indicators of insecurity also show no upward trend

fiscal decentralization central bank independence and inflation abstract we develop earlier cross sectional studies of inflation rates by adding the degree of tax centralization as another explanatory variable this makes central bank independence perform appreciably better as an explanatory variable also we find that centralized countries have higher inflation

political influence on the central bank international evidence political influence on the central bank is measured bere by looking at the probability that a central bank governor will be replaced shortly after a political change of government the governor changes about half the time witbin six months of a nonconstitutional or other radical change of government a military coup or a restoration of democracy the governor is much less likely to change within six months following a routine change in the head of government about one fourth of the time in developing countries and one tenth in industrial countries these indicators vary across countries and correlate statistically with inflation and its variability and with real growth and real interest rates differences in the vulnerability of the central bank to political instability in political instability itself and in central bank turnover in nonpolitical periods seem to be a major part of the explanation for why developing countries have on average higher and more variable inflation than industrial countries do

financial system development in transition economies this paper provides an overview of the major issues with respect to financial system development in transition economies which were discussed at a conference in groningen the netherlands december 1997 after a brief remark on the role of financial system design during economic transition the paper focuses on the role of stock markets in the process of financial intermediation with emphasis on the role of regulations in these markets the role of deposit insurance to improve bank system stability and the importance of an independent central bank measurement issues relating to central bank independence and its impact on inflation and growth 2000 elsevier science b v all rights reserved

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

the effects of the unemployment insurance payroll tax on wages employment claims and denials abstract following a 13 year period when all employers in washington paid the same unemployment insurance ui tax rate washington was forced to adopt an experience rated tax system in 1985 we use this natural experiment to explore both tax incidence and the effects of experience rating we find that industry average tax rates are largely passed on to workers through lower earnings however our estimates imply that a firm can shift much less of the difference between its tax rate and the industry average rate our results also indicate that experience rating reduces turnover and ui claims and increases claim denials

job matching and propagation in the u s labor market the vacancy unemployment ratio and employment react sluggishly to productivity shocks we show that the job matching model in its standard form cannot reproduce these patterns due to excessively rapid vacancy responses extending the model to incorporate sunk costs for vacancy creation yields highly realistic dynamics creation costs induce entrant firms to smooth the adjustment of new openings following a shock leading the stock of vacancies to react sluggishly

occupational and job mobility in the us we propose a new methodology to measure worker mobility across occupations and jobs in the us building on the limited longitudinal dimension of monthly cps data for the period 1979 2006 we find that about 3 5 of male workers employed in two consecutive months report different three digit occupations this rate is procyclical mildly rising in the 1980s and falling after 1995 we also revise upward current estimates of aggregate job to job mobility since 1994 from 2 7 to 3 2 of employment per month despite extreme similarity of average levels and time series behavior occupational and job mobility are only weakly correlated

fiscal decentralization central bank independence and inflation a panel investigation we reinvestigate the relationship between revenue decentralization rd central bank independence cbi and inflation by modifying the paper by eco 72 2001 95 we show that in contrast to the earlier findings rd has a negative impact on inflation if accompanied by both cbi and local accountability in low inflation countries however rd has a negative impact on inflation even without these additional factors though cbi accentuates this effect

how citizens participate in macroeconomic policy international experience and implications for poverty reduction summary many developing and transitioning countries have difficulty sticking to sound macroeconomic policy international donors are pushing recipient countries to forge a public consensus on macroeconomic policy as a means to enhance sustainability and impacts on the poor finance and budget officials central bank staff and economic policymakers however often assume that citizens cannot understand or contribute to macroeconomic policy yet the poor often do not trust the government to make the right decisions for them how can citizen participation help bridge this gap based on a review of international experience the paper explores this question and identifies how development administrators can employ civic participation in macroeconomic policy the discussion highlights where citizens have the greatest options for participation and notes the impacts participation can have on fostering policies and outcomes that target poverty reduction 2003 elsevier science ltd all rights reserved

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

how does fiscal decentralization affect aggregate national and subnational government size abstract beyond conducting the usual regression analysis of the relationship between fiscal decentralization and aggregate government size national and subnational combined this paper makes the first attempt to examine how different fiscal decentralization measures affect the sizes of national and subnational state and local combined governments an econometric analysis using panel data from 32 industrial and developing countries 1980 1994 finds that 1 expenditure decentralization leads to smaller national governments larger subnational governments and larger aggregate governments 2 revenue decentralization increases subnational governments by less than it reduces national governments hence leads to smaller aggregate governments and 3 vertical imbalance tends to increase the sizes of subnational national and aggregate governments

domestic capacity and the implementation gap in regional trade agreements regional trade agreements rtas all over the world share many of the same institutional features from dispute settlement mechanisms to legalized language to escape clauses and espouse many of the same goals but many of those features are unimplemented in different contexts across the world many observers have pointed to an implementation gap in rtas most of which promise much but deliver relatively little but offer no explanation for this gap i argue that this is explained by domestic capacity in countries where the rule of law is weak and infrastructure is insufficient and particularly when those elements interact it is difficult to implement trade agreements this article utilizes expert survey data to demonstrate that member states with poor infrastructure and little respect for the rule of law are unable to carry out the obligations they agree to in their trade agreements domestic capacity both physical and institutional can explain the implementation gap between what agreements promise and wh

attitudes and behaviours of private sector landlords towards the energy efficiency of tenanted homes abstract the uk s housing stock generates approximately 27 of the country s total annual carbon emissions in light of the legally binding targets to reduce carbon emissions new housing is subject to a tightening of regulations governing energy demand and efficiency resulting in a gradual improvement in carbon emissions the question is how to achieve the deep carbon emission reductions from existing domestic properties of which 75 will still be in use in 2050 government has sought to provide incentives to homeowners to improve the energy efficiency of their households and mandate improvements in socially rented housing using a range of fiscal measures most recently the green deal there has however been little consideration of the 18 of uk households who privately rent their home a tenure that is growing fast the aim of this research is to investigate the factors that influence private sector landlords when considering energy efficiency improvements to their tenanted homes the results indicate that government policy has consistently failed to engage private sector landlords in the issue of energy efficiency and thus measures must be taken to understand the motivations of landlords in order to design effective incentives and interventions

central bank reform liberalization and inflation in transition economies an international perspective this paper develops extensive new data on the legal independence of new central banks in 26 former socialist economies fse this data is constructed using the codification system for measuring legal independence developed in cukierman webb and neyapti 1992 and in chapter 19 of cukierman 1992 this makes it comparable with earlier data on central bank independence cbi in the industrial democracies and in non fse developing countries and permits experimentation with alternative indices of cbi like those reviewed in eijffinger and van keulen 1995 the new indices of independence indicate that central bank cb reform in the fse during the nineties has been quite ambitious in spite of the large price shocks induced by the transformation from plan to market reformers in those countries chose to create central banks with levels of legal independence that are substantially higher on average than those of developed economies during the eighties based on data from 1989 through 1998 the evidence in the paper suggests that cbi is unrelated to inflation during the early stages of liberalization but for sufficiently high and sustained levels of liberalization and controlling for variables like price decontrols and wars legal cbi and inflation are significantly and negatively related these findings are consistent with the view that legal cbi no matter how high cannot contain the powerful inflationary impact of wide scale liberalization of formerly controlled prices but once the process of liberalization has gathered sufficient momentum legal independence becomes effective in slowing inflation down and the cumulative liberalization index developed by de melo et al 1996 becomes relatively less important the paper also presents evidence on factors that affect the level of cbi and examines the relation between inflation and cbi within a broader sample composed of the transition and of the developed economies

macro prudential governance and central banks facts and drivers abstract the great crisis has highlighted the importance of establishing macro prudential architectures to address problems of financial stability central banks are always part of macro prudential settings but their role is far from being homogeneous across countries reflecting the fact that according to economic theory there are pros and cons in extending central bank influence to macro prudential supervision the issue is then genuinely empirical are there any meaningful drivers explaining the actual choices made by policymakers about the central bank s role in macro prudential governance we identify three potential drivers micro supervision involvement monetary policy discretion overall institutional independence and test for their relevance by analysing current institutional settings in 31 advanced and emerging market economies we find that central bankers already in charge of micro supervision and less politically independent are more likely to get extended macro prudential powers the same is true if they have low monetary policy discretion being constrained by a monetary stability objective we interpret these results by using a political economy perspective

debt inflation and central bank independence abstract increasing the independence of a central bank from political influence although ex ante socially beneficial and initially successful in reducing inflation would ultimately fail to lower inflation permanently the smaller anticipated policy distortions implemented by a more independent central bank would induce the fiscal authority to decrease current distortions by increasing the deficit over time inflation would increase to accommodate a higher public debt by contrast imposing a strict inflation target would lower inflation permanently and insulate the primary deficit from political distortions

human capital and unemployment dynamics why more educated workers enjoy greater employment stability why do more educated workers experience lower unemployment rates and lower employment volatility empirically these workers have similar job finding rates but much lower and less volatile separation rates than their less educated peers we argue that on the job training being complementary to formal education is the reason for this pattern using a search and matching model with endogenous separations we show that investments in match specific human capital reduce incentives to separate but leave the job finding rate essentially unaffected the model generates unemployment dynamics quantitatively consistent with the data finally we provide novel empirical evidence supporting the mechanism studied in the paper this article is protected by copyright all rights reserved

the effect of central bank independence on inflation in developing countries abstract ismihan and ozkan ismihan m ozkan f g 2004 does central bank independence lower inflation economics letters 84 305 309 provide theoretical support for prior studies empirical findings of positive or no significant relationship between central bank independence cbi and average inflation performance the present paper argues that these findings are spurious because the studies use an econometric methodology that does not account for the measurement error in their proxies for cbi this paper employs an econometric methodology that does account for this measurement error and finds a strong negative relationship between cbi and inflation even though the sample is limited to developing countries

reconsidering the principal components of central bank independence the more the merrier we use principal component analysis to reassess the link between different attributes of central bank independence and inflation performance we suggest that coding problems may account for the fact that almost none of the attributes included in the cukierman index has a systematic plausible relationship with inflation the multi faceted cukierman index also seems to be out performed by a much narrower index focusing solely on policy independence these findings point to the importance of using public choice analysis to isolate the real problem here namely finding specific central bank structures that effectively insulate central bankers from political pressures

does the dynamic time consistency model of inflation explain cross country differences in inflations dynamics dynamic time consistency models of monetary policy imply that the size of the inflationary response to price shocks and the persistence of inflation is inversely related to factors that enhance the central bank s ability to commit to low average inflation hence these models predict that the dynamics of inflation vary over time and across countries in response to changes in measures of political support for low inflation we find support for this hypothesis in data fromeighteen oecd countries over the period 1961 94 however political variables account for only a small fraction of the variation in inflation dynamics across countries 2004 elsevier ltd all rights reserved

risk commercialism and social purpose repositioning the english housing association sector originally seen as the third arm of uk housing policy the independent not for profit housing association sector had long been seen as effective in filling the gap where the state or market were unable to provide for households in need since the 1980s in particular successive governments had viewed housing associations in favourable terms as efficient semi autonomous social businesses capable of leveraging significant private funding by 2015 in contrast central government had come to perceive the sector as inefficient bureaucratic and wasteful of public subsidy making use of institutional theory this paper considers this paradigm shift and examines the organisational responses to an increasingly challenging operating environment by focusing in particular on large london housing associations the paper analyses their strategic decision making to address the opportunities and threats presented the paper argues that in facing an era of minimal subsidy low security and high risk the 2015 reforms represent a critical juncture for the sector housing organisations face a stark dilemma about whether to continue a strategy of profit for purpose or to embrace an unambiguously commercial ethos the article contends that the trajectory of decision making although not unidirectional leads ultimately towards an increased exposure to risk and vulnerability to changes in the housing market more fundamentally the attempt to reconcile social and commercial logics is likely to have wider consequences for the legitimacy of the sector

the decline of job loss and why it matters there is considerable evidence that american workers face lower risks of job loss in recent years than 10 20 or 30 years earlier i summarize some of the evidence for this claim and explain why the decline of job loss matters my attention centers on unwelcome job loss employer initiated separations that lead to unemployment temporary or persistent drops in earnings and other significant costs for job losers since there is no fully satisfactory statistic for the incidence of job loss i consider several measures and data sources

central bank independence and inflation good news and bad news abstract the bad news is that the findings of recent studies of central bank independence and inflation are very sensitive to outliers the good news is that evidence presented here reinforces the existing case for bank independence in high income economies

strategic asset management in the social rented sector approaches of dutch and english housing associations in england and the netherlands in response to changes in housing policy and the market there is widespread enthusiasm for asset management in the social rented sector a key issue in both countries is the development of a strategic approach towards the formulation of asset management plans the paper examines this issue in relation to the current practice of housing associations in both countries drawing on case studies in england and the netherlands it is concluded that in both countries practice varies widely between housing associations some of the approaches adopted by front runners can be seen as models for other associations yet to develop a strategic approach towards asset management lessons can also be learnt across national boundaries though necessarily mediated by differences between the two housing systems

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

inflation and central bank independence a meta regression analysis using 59 studies we perform a meta regression analysis of studies examining the relationship between inflation and central bank independence cbi the studies considered are very different with respect to the cbi indicator used the sample of countries and time periods covered model specification estimators used and publication outlet we conclude that there is a significant publication bias however we also find a significant genuine effect of cbi on inflation differences between studies are not caused by differences in cbi indicators used

central bank independence and the monetary instrument problem we study the monetary instrument problem in a dynamic noncooperative game between separate discretionary fiscal and monetary policy makers we show that monetary instruments are equivalent only if the policy makers objectives are perfectly aligned otherwise an instrument problem exists when the central bank is benevolent while the fiscal authority is short sighted relative to the private sector excessive public spending and debt emerge under a money growth policy but not under an interest rate policy despite this property the interest rate is not necessarily the optimal instrument

employment hours and earnings consequences of job loss us evidence from the displaced workers survey data are used from the 1984 2016 displaced workers surveys dws to investigate the incidence and consequences of job loss 1981 2015 these data show a record high rate of job loss in the great re

declining labor turnover and turbulence abstract the rate of job loss has been on a secular decline for the last four decades or longer changes in demographics or industry composition do not account for the trend this paper seeks to identify the possible sources of the decline using a simple search and matching model with two types of workers experienced and inexperienced where the former type faces a risk of skill loss during unemployment the calibrated model suggests that a higher risk of skill loss during unemployment results in a lower job separation rate because workers accept lower wages in exchange for job security various other potential hypotheses are also examined

does central bank independence lower inflation this paper provides a potential explanation for the recent findings of no significant relationship between central bank independence cbi and lower inflation we argue that although cbi delivers lower inflation in the short term it may reduce the scope for productivity enhancing public investment and so harm future growth potential we also argue that the effects on growth make cbi less likely to achieve lower inflation in the long term

is job stability in the us falling reconciling trends in the current population survey and panel study of income dynamics this article considers whether two commonly used sources of information on employer tenure the panel study of income dynamics and the current population survey yield systematically different trends in employer tenure little evidence of a discrepancy between the data sets in the 1980s or 1990s is found when comparable samples variable definitions and time frames are used neither data set shows a significant trend in the share of workers with 1 year or less of tenure while both data sets show an increase in the fraction of men with less than 10 years of tenure starting in the late 1980s

has job stability declined yet new evidence for the 1990 s we update the evidence on changes in job stability through the mid 1990s using recently released current population survey data for 1995 that parallel earlier job tenure supplements in the aggregate job stability declined modestly in the first half of the 1990s moreover the relatively small aggregate changes mask rather sharp declines in stability for workers with more than a few years of tenure nonetheless the data available to this point do not support the conclusion that the downward shift in job stability for more tenured workers and the more modest decline in aggregate job stability reflect long term trends

inflation and central bank independence revisited abstract king and ma economics letters 72 2001 95 claim that evidence which they report for a sample of 42 countries shows that central bank independence cbi and inflation are not significantly related the present paper argues that this putative failure of cbi to affect inflation is due to king and ma s use of an econometric methodology that does not account for the inaccuracy of their proxy for cbi employing an alternative econometric methodology that tackles the measurement error problem directly this paper finds a strong negative relationship between cbi and inflation

turbulence and unemployment in a job matching model according to ljungqvist and sargent 1998 high european unemployment since the 1980s can be explained by a rise in economic turbulence leading to greater numbers of unemployed workers with obsolete skills these workers refuse new jobs due to high unemployment benefits in this paper we reassess the turbulence unemployment relationship using a matching model with endogenous job destruction in our model higher turbulence reduces the incentives of employed workers to leave their jobs if turbulence has only a tiny effect on the skills of workers experiencing endogenous separation then the results of ljungqvist and sargent 1998 2004 are reversed and higher turbulence leads to a reduction in unemployment thus changes in turbulence cannot provide an explanation for european unemployment that reconciles the incentives of both unemployed and employed workers jel e24 j64

fiscal decentralization fiscal rules and fiscal discipline fiscal decentralization fd and fiscal rules fr are institutional mechanisms that are implemented by varying degrees in increasing number of countries this paper investigates empirically the effect of fr on the effectiveness of fd in achieving fiscal discipline panel evidence strongly supports that balanced budget and expenditure rules help fd to achieve this goal while debt rule has a direct disciplinary effect

persistence of employment fluctuations a model of recurring job loss standard models of employment fluctuations cannot reconcile the unemployment rate s remarkable persistence with the high job finding rates found in worker flows data a matching model emphasizing high hazard rates among newly formed firm worker matches can resolve this shortcoming in the model matches are experience goods consequently newly employed workers face higher hazard rates following a job loss workers may experience several short lived jobs before finding stable employment at an aggregate level an initial burst of job loss precipitates a steady flow of recurring job loss a simulation shows that this recurring job loss can account for the fact that the unemployment rate remains elevated for as much as 4 or 5 years following an initial jump intuitively the labour market frictions associated with the difficult and time consuming process of matching unemployed workers with appropriate jobs represent an appealing way to enhance conventional dynamic general equilibrium models of economic fluctuations that generally exhibit very little internal propagation of business cycle shocks 1 nevertheless although conventional matching models such as the canonical mortensen and pissarides 1994 model successfully explain many other important features of the labour market they fail to explain the high degree of persistence observed in the u s unemployment rate the primary reason for this failure is that data on labour market flows show that unemployed workers actually find jobs quite quickly therefore following a shock that triggers a burst of job loss the high job finding rate implies that the unemployment rate in these models returns quite rapidly back toward its average level this represents a significant obstacle to the notion that frictions in the labour market account for much of the propagation of business cycle shocks this paper asserts that existing matching models fail to capture an important feature of the labour market that can reconcile the dramatic persistence of the unemployment rate with the evidence of high job finding rates specifically although unemployed workers find jobs quickly the newly found jobs often last only a short time after an initial job loss a worker may experience several short lived jobs before settling into more stable employment this recurring job loss slows the pace at which the unemployment rate returns to its normal level following an adverse shock

why did the average duration of unemployment become so much longer there has been a substantial increase in the average duration of unemployment relative to the unemployment rate in the u s over the last 30 years we evaluate the performance of a standard job search model in explaining this phenomenon in particular we examine whether the increase in within group wage inequality and the decline in the incidence of unemployment can account for the increase in unemployment duration the results indicate that these two changes can explain a significant part of the increase over the last 30 years although the model fails to match the behavior of unemployment duration during 1980s

human capital specificity evidence from the dictionary of occupational titles and displaced worker surveys 1984 2000 measures of four basic skills constructed from the dictionary of occupational titles are used to examine the source of human capital specificity the measures are used to characterize the skill portfolio of each job and to construct distance measures between jobs wage losses in the displaced worker surveys are shown to be more closely associated with switching skill portfolios than switching industry or occupation code per se these switches represent large decreases in the skill portfolio in the postdisplacement job the recent evidence for industry specific capital is reexamined the results suggest a difference between fluid and crystallized skills

decentralization and inflation commitment collective action or continuity do political and fiscal decentralization make it easier or harder to control inflation statistical analysis of average annual inflation rates in a panel of 87 countries in the 1970s and 1980s found no clear relationship between decentralization and the level of inflation political decentralization however does appear to reduce change in countries relative inflation rates over time by creating additional veto players federal structure may lock in existing patterns of monetary policy whether inflationary or strict among the mostly developed countries that started with low inflation inflation tended to increase more slowly in federations than in unitary states among the mostly developing countries that started with high inflation inflation tended to increase faster in the federations there is evidence that political decentralization locks in a country s degree of practical central bank independence whether high or low and the relative hardness or softness of budget constraints on subnational governments

inflation and central bank independence conventional wisdom redux until recently there existed a broad consensus that an important institution for combating inflation is a central bank insulated from political influence this conventional wisdom has been challenged by among others campillo and miron 1997 who present evidence purporting to show that if an inflation regression equation is expanded to include not only their proxy for central bank independence cbi but other regressors as well then the negative correlation between inflation and cbi vanishes the present paper argues that allegations of the demise of this nexus should not be accepted uncritically this paper which reports the results of an analysis of covariance structures finds a strong negative relationship between inflation and cbi

does central bank independence really matter new evidence for developing countries using a new indicator abstract this paper provides a new indicator for central bank independence cbi based on the turnover rate of central bank governors for 82 developing countries over the period 1980 1989 using this new indicator it is concluded that this proxy for cbi is related to inflation only if the high inflation countries are included in the sample the view that both cbi and inflation are caused by effective opposition towards inflation is not supported using both the extreme bound analysis and sala i martin s method we do not find evidence that cbi is robustly related to economic growth

checks and balances and the supply of central bank independence abstract the paper analyzes the institutional conditions under which policymakers can credibly commit to an independent central bank and thereby mitigate the well known time consistency problem in monetary policy it is shown theoretically that granting independence via a statute is only credible for legislative systems with at least two heterogeneous decision making bodies which both have veto rights for example bicameral systems this thesis is supported by empirical evidence the legal independence of central banks is significantly higher in those oecd countries whose legislative processes are characterized by extensive checks and balances furthermore the negative relation between legal independence and inflation is larger in countries with checks and balances than in countries without checks and balances

replacing a disobedient central bank governor with a docile one a novel measure of central bank independence and its effect on inflation this paper identifies two mechanisms that empirical papers on central bank independence assume to be embedded in the yardstick measure of turnover rate of central bank governor i the removal of a governor who is perceived as a challenger by the government and ii whether his her replacement is an ally of the government we identify the first mechanism with premature exits of central bankers and the second by examining whether or not the incoming governor is drawn from the ranks of the executive branch of the government we find that only premature exits and replacements with government allies increase inflation

central bank independence and monetary control ing from details these conclusions imply that inflation is lower the higher is cbi and that given independence countries that pre announce monetary policy have even lower rates of inflation furthermore there is no evidence that cbi retards growth or investment as a matter of fact for ldcs the evidence points in the opposite direction low independence is associated with lower growth and investment some economists feel that excessive independence may interfere with the potential stabilisatory function of monetary policy since fluctuations in the growth rate of the economy are found to be unrelated to cbi this does not appear to be the case iii commitment via central bank independence and

occupational specificity of human capital we find that returns to occupational tenure are substantial everything else being constant 5 years of occupational tenure are associated with an increase in wages of 12 20 moreover when occupational experience is taken into account tenure with an industry or employer has relatively little importance in accounting for the wage one receives this finding is consistent with human capital being occupation specific

mobile capital domestic institutions and electorally induced monetary and fiscal policy the literature on global integration and national policy autonomy often ignores a central result from open economy macroeconomics capital mobility constrains monetary policy when the exchange rate is fixed and fiscal policy when the exchange rate is flexible similarly examinations of the electoral determinants of monetary and fiscal policy typically ignore international pressures altogether we develop a formal model to analyze the interaction between fiscal and monetary policymakers under various exchange rate regimes and the degrees of central bank independence we test the model using data from oecd countries we find evidence that preelectoral monetary expansions occur only when the exchange rate is flexible and central bank independence is low preelectoral fiscal expansions occur when the exchange rate is fixed we then explore the implications of our model for arguments that emphasize the partisan sources of macroeconomic policy and for the conduct of fiscal policy after economic and monetary union in europe

meeting the decent homes standard london housing associations asset management strategies the english government s 10 year flagship decent homes programme ended in 2010 the purpose of this article is to examine the asset management strategies that a sample of london housing associations took to meet the decent homes standard drawing on the concept of institutional logics the article outlines the social housing sector s conflicting regulatory context whereby organisations were statutorily obliged to improve housing standards without being able to raise rents as a way to fund improvements depending on whether the housing association adopts a market orientated or traditional task orientated approach to asset management the associations sampled have either disposed of non decent stock to generate cash flows or else retained the stock undertaking minimal repairs to meet the government s target deadline the article concludes that not only has this national performance target triggered different organisational responses it has also led to longer term unintended consequences for existing an

on the impossibility of central bank independence four decades of time and intellectual inconsistency the intellectual justification for modern central banking time inconsistency celebrated its fortieth anniversary in 2017 alongside the cambridge journal of economics however the key progeny of the time inconsistency literature central bank independence has fundamental flaws that have been thus far neglected in mainstream research in the first instance the argument for independence relies on a utilitarian rather than institutional analysis one that neglects the genesis of central banks and their relation to other institutions within a country second central bank independence neglects the complex interdependencies of the global monetary and financial system applying an institutional lens to the concept of central bank independence i conclude that independence fails under the reality of globalization as much as it does in a domestic context with central banks reliant on all manner of political institutions they are never really independent operationally or in terms of policy

do central bank law reforms affect the term in office of central bank governors in this paper we confirm the hypothesis that central bank independence reforms reduce the likelihood that a central bank governor will be replaced however the strength of this effect depends on the rule of law and the degree of political polarization c 2009 elsevier b v all rights reserved

who is afraid of political instability abstract an unstable macroeconomic environment is often regarded as detrimental to economic growth among the sources contributing to such instability much of the blame has been assigned to political issues this paper empirically tests for a causal and negative long run relation between political instability and economic growth but finds no evidence of such a relationship sensitivity analysis indicates that there is a contemporaneous negative relationship but also that in the long run and ignoring institutional factors the group of african countries plays the determining role

central bank independence centralization of wage bargaining inflation and unemployment theory and some evidence abstract this paper proposes a conceptual framework to investigate the effects of central bank independence of the degree of centralization of wage bargaining and of the interaction between those institutional variables on real wages unemployment and inflation in a framework in which unions are averse to inflation this aversion moderates union s wage demands as they attempt to induce the central bank to inflate at a lower rate an increase in the degree of centralization of wage bargaining a decrease in the number of unions triggers two opposite effects on real wages unemployment and inflation it reduces the substitutability between the labor of different unions and therefore the degree of effective competition between them this reduced competition effect raises real wages unemployment and inflation but the decrease in the number of unions also strengthens the moderating effect of inflationary fears on the real wage demands of each union this strategic effect lowers real wages unemployment and inflation for sufficiently inflation averse unions the interaction between those two effects produces a calmfors driffill type relation between real wages and centralization the paper analyzes the effects of central bank independence on the position and the shape of this relation as well as on inflation and unemployment the paper features two mechanisms one of which is novel through which monetary institutions have real effects the model implies that if there is a single union social welfare is maximized when the central bank attaches a zero weight to inflation but when the number of unions is larger than one this result is no longer true in general empirical evaluation of some of the theoretical implications using data from 19 developed economies is for the most part supportive of those implications

the price of experience we identify a key role of factor supply driven by demographic changes in shaping several empirical regularities that are a focus of active research in macro and labor economics in particular demographic changes alone can account for the large movements of the return to experience over the last four decades for the differential dynamics of the age premium across education groups emphasized by katz and murphy 1992 for the differential dynamics of the college premium across age groups emphasized by card and lemieux 2001 and for the changes in cross sectional and cohort based life cycle profiles emphasized by kambourov and manovskii 2005 jel d91 e24 i23 j11 j24 j31

are workers permanently scarred by job displacements this paper investigates whether workers suffer lasting scars following job displacements using david t ellwood s 1982 terminology scars represent persistent effects whereas blemishes are transitory adjustments which dissipate over time more precisely dislocated individuals are defined as scarred if they continue to earn less or to be unemployed more than their nondisplaced counterparts even after the conclusion of a several year adjustment period