equilibrium unemployment search behaviour and unemployment persistency unemployment persistency and high equilibrium unemployment is often assumed to be caused by rigidities and low search efficiency in the labour market especially in european welfare states with generous income replacement schemes these arguments are tested on data from sweden an old welfare state with a long period of full employment that has changed into a situation with high unemployment data show a clear and very strong unemployment duration dependency but it is not possible to prove that this is a result of low employability among the long term unemployed getting a job is most of all associated with relative qualifications recall expectations and local labour market conditions and not with search behaviour or high wage demands it is argued that unemployment duration when unemployment is high can best be understood as a selection process rather than a search process and that econometric estimations of equilibrium unemployment are too pessimistic about the potential for an expansive economic policy it is also argued that an active labour market policy is a more efficient compliment to such a policy than changes in income replacement ratios copyright 2001 by oxford university press

pricing free bank notes abstract during the pre civil war period us banks issued distinct private monies called bank notes a bank note is a perpetual risky non interest bearing debt claim with the right to redeem on demand at par in specie this paper investigates the pricing of this private money taking into account the enormous changes in technology during the period namely the introduction and rapid diffusion of the railroad a contingent claims pricing model for bank notes is proposed and tested using monthly bank note prices for all banks in north america together with indices of the durations and costs of trips back to issuing banks constructed from pre civil war travelers guides evidence is produced that market participants properly priced the risks inherent in these securities suggesting that wildcat banking was not common because of market discipline

employability adaptability and flexibility changing labour market prospects 2000 employability adaptability and flexibility changing labour market prospects regional studies vol 34 no 7 pp 599 600

private information deposit interest rates and the stability of the banking system abstract the regulation of deposit interest rates has received little support from economists the same is true for the original rationale for such regulation that bank competition for deposits generates inherent instability in the banking system this paper develops an adverse selection model of banking in which this rationale is correct moreover in this model instability in the banking system can arise despite the presence of a lender of last resort and despite the absence of any need for deposit insurance however in the world described the regulation of deposit interest rates is shown to be an appropriate response to instability in the banking system finally it is argued that adverse selection models of deposit interest rate determination can confront a number of observed phenomena that are not readily explained in other contexts

grim down south the determinants of unemployment increases in british cities in the 2008 2009 recession lee n grim down south the determinants of unemployment increases in british cities in the 2008 2009 recession regional studies this paper investigates the impact of the 2008 2009 recession on unemployment in the sixty largest cities in great britain the key determinant of changes in unemployment was the skills of the population with highly skilled cities experiencing smaller increases cities with employment in financial services or manufacturing sectors experienced larger increases in unemployment whether a city has a specialized or a diverse economy appears less important than the industries in which the city is specialized the results highlight a problem as the largest unemployment increases were in cities seen as having least potential for future growth

misintermediation and macroeconomic fluctuations abstract individuals plan consumption and production for different point in the future using interest rates of various maturities as a guide however the financial intermediaries individuals work through traditionally do not match the maturity structure of their assets and liabilities as a result aggregate production plans and aggregate consumption plans for each period in the future need not coincide the resulting discrepancy will eventually appear as a recession or boom involving an unanticipated change in interest rates and production inside the original intertemporal production possibilities frontier maturity transformation is therefore not an essential function of financial intermediation but rather a mis function one which we call misintermediation

a model of the bfh payments system the bfh payments system was introduced by robert l greenfield and leland b yeager in a laissez faire approach to monetary stability 6 the key element of their proposal is to dispense with base money and instead tie the means of payment to a nearly comprehensive bundle of goods and services by the institution of indirect convertibility their system promises to be free from inflation and several sources of recession while bfh was named to credit fischer black i eugene fama 3 4 and robert hall 10 11 it must not be confused with their specific institutions or arguments greenfield and yeager modified their ideas and have continued to develop the system 20 5 21 8 9 the purpose of this paper is to present a model of bfh consistent with simple textbook macroeconomics contrary to first impressions bfh is best understood using the concept of money but the absence of base money makes the quantity theory inappropriate for analysis instead a simple keynesian model illustrates the determination of interest rates real income the price level and the quantity of money aggregate supply the is relationship and money demand are conventional only the money supply process is unusual

on the economics of private money abstract the application of laissez faire to the monetary system is a key ingredient of important proposals for monetary reform both new and old that seek to discipline government creation of money through competition this paper provides an overview of issues to be encountered in the construction of theoretical models of private monetary economies including consideration of market imperfections that have been hypothesized to arise in these systems further some descriptive history of the less regulated monetary systems of 19th century new york is undertaken with an emphasis on discussing the nature of market generated banking and monetary institutions in light of these critiques

the failure of woodford s model of the channel system in the cashless economy woodford claims to present a cashless and frictionless model of the channel system of interest rate control this note explains why woodford s frictionless model omits an essential feature of channel systems the need for clearing e cash balances at the central bank without the existence of some form of final settlement on the books of the central bank channel systems collapse woodford makes this conceptual error because he assumes that moneyless accounting systems of exchange can be applied to model e cash economies

redundancy in an expanding labour market a case study of displaced workers from two manufacturing plants in southampton previous studies of redundancy have been derived from a restricted geographical base they have been predominantly concerned with workers made redundant by manufacturing firms in older industrial regions and have largely ignored redundancies in more buoyant labour market areas this paper examines the post redundancy experience of workers made redundant by two large manufacturing firms in southampton in the mid 1980s comparison with previous studies of redundancy in less prosperous labour markets in northern regions of the uk highlights contrasts in the proportions of workers finding alternative employment and in rates of pay working conditions and levels of job satisfaction the study also highlights the importance of gender in post redundancy experience another factor that has been neglected in previous studies

money is an experience good competition and trust in the private provision of money the interplay between competition and trust as efficiency enhancing mechanisms in the private provision of money is studied with commitment trust is automatically achieved and competition ensures efficiency without commitment competition plays no role trust does play a role but requires a bound on efficiency stationary inflation must be non negative and therefore the friedman rule cannot be achieved the quality of money can be observed only after its purchasing capacity is realized in this sense money is an experience good

effectiveness of policy measures in transforming the energy system abstract the effectiveness of public policy measures in creating energy impacts were investigated through 20 policy cases on renewable energy and efficient energy use the policies were grouped into subsidy type and catalyzing measures based on the use of the public financial resources the policy cost of subsidies ranged from 1 mwh up to over 100 mwh the feed in tariffs being clearly the most expensive choice the public measures that strive for catalyzing market breakthroughs lie in the range 0 1 1 mwh but some business driven and procurement type measures could come down to even 0 01 mwh the policy costs observed could decrease by 25 60 if accounting for lagging energy impacts the better policy efficiency of catalytic measures is most likely due to a stronger market and business sensitiveness understanding of market needs and focusing more on the end use sector with active stakeholder involvement the magnitude of the energy impacts were in average larger from the subsidy instruments but a few end use technologies linked to catalytic measures reached even higher effects due to the strong market penetration achieved

a model of nominal contracts a model is produced in which labor contracts that prespecify unindexed nominal wage payments arise endogenously these contracts function as a self selection mechanism under appropriately different attitudes toward price level risk which can either arise directly from preferences or be induced by different patterns of asset holdings nominal contracts allow high productivity workers to signal their type by their willingness to accept unindexed contracts this explanation of nominal contracts does not require that money be used in any particular set of transactions and nominal contracts enhance the risk faced by all parties accepting them

the development of the new monetary economics this paper looks into the history of economic thought to examine the forerunners of the new monetary economics this approach emphasizes the role of regulations on private financial intermediation in determining the particular institutional arrangements that contemporary monetary theory treats as data the new view investigates the possibility that under laissez faire the unit of account and means of payment traditionally bundled together in the item called money may become separated the earlier writers who share this perspective have been overlooked by historians of economic thought as well as by recent contributors to the new monetary economics an examination of these theorists is of more than historical interest for many of their insights and analyses are relevant to modern monetary theory

renewable energy an efficient mechanism to improve gdp abstract this article analyzes the effects of renewable energy on gdp for 116 economies in 2003 through structural equation modeling sem approach in order to decipher the mechanism of how the use of renewables improves macroeconomic efficiency we decompose gdp by the expenditure approach although previous theory predicts positive effects of renewables on capital formation and trade balance the sem results show that renewables have a significant positive influence on capital formation only the result that renewables do not have a significant impact on trade balance implies that renewables do not have an import substitution effect thus we confirm the positive relationship between renewable energy and gdp through the path of increasing capital formation but not for the path of increasing trade balance

embedding the multinationals institutions and the development of overseas manufacturing affiliates in wales and north east england phelps n a mackinnon d stone i and braidford p 2003 embedding the multinationals institutions and the development of overseas manufacturing affiliates in wales and north east england reg studies 37 27 40 the impact of foreign direct investment fdi upon host regions is a topic of perennial interest within the fields of regional economics industrial geography and regional development much of the early literature here draws negative conclusions regarding the wider indirect impacts of fdi on host regions pointing to the branch plant syndrome in light of significant processes of corporate restructuring and the build up of host region institutional capacities however recent literature has claimed that the plants of multinational enterprises mnes are becoming increasingly embedded in regional economies against this backdrop this paper aims to provide a critical assessment of the regional embeddedness of fdi in wales and the north east of england based upon an extensive survey of o

a theory of monetary exchange the transactions cost for alternative exchange mechanisms for the household exchange problem can be characterized by the computational complexity of the exchange process the computational complexity for any exchange mechanism is at least nh where n is the number of goods and h is the number of households imposing the conditions of conservation nonnegativity and quid pro quo results in a command exchange mechanism whose computational complexity is nh multiparty barter exchange formalized using graph theory has computational complexity

free bank failures risky bonds versus undiversified portfolios almost 30 of the 872 banks established under the free banking system 1837 62 are considered failures unable to reimburse noteholders for the full value of their bank notes upon closure lacking sufficient data economists have focused on one of two general failure explanations poor regulation design or undiversified bank portfolios i test both explanations within hazard functions using warren weber s annual balance sheet data for almost every antebellum bank my results suggest that free banking s bond secured note issue was the underlying problem but individual banks could have avoided failure by diversifying their assets with loans and controlling their circulation

separation of unit of account from medium of exchange the separation of a unit of account uoa from a medium of exchange moe in the commodity money system is investigated by considering explicitly a seller s choice of uoa in terms of either an moe or a unit of metal weight if the likelihood of debasement of an moe and its rate are high enough the price is posted in terms of a unit of metal weight rather than an moe interestingly this moe uoa separated equilibrium yields the flexible nominal price whereas an moe uoa integrated equilibrium yields the sticky one this implies the nominal price rigidity in the fiat money system where moe and uoa are integrated

the recent performance of the uk labour market century there is no question that one of the major challenges facing any industrialised country is to ensure that its labour market operates so as to enable people who want to work to do so at a reasonable rate of pay so this will be our focus in what follows in fact we consider two major issues the first refers to the performance of the labour market from the macroeconomic point of view and this we cover in section 2 here we look at unemployment and inflation explaining why recent history from this perspective looks relatively benign and asking about the future consequences of some of the significant policy changes since 1997 the second major issue dealt with in section 3 concerns the imbalances in the labour market across different skill groups focusing particularly on the problem of worklessness facing the unskilled again we attempt to analyse why this problem has arisen and the main thrust of recent policy in attempting to resolve it we then conclude with a summary of what we have learned

existence and stability of conventions and institutions in a monetary economy the example of money illustrates that the role of history is crucial in explaining the emergence and persistence of conventions and institutions this implies that in analyzing money and monetary institutions the usefulness of the general equilibrium analysis and game theory which both draw upon an instrumental concept of rationality is limited in our view a fruitful analysis of conventions and institutions has to take account of the importance of historical contingencies and the fundamental incompleteness of individual knowledge

the failure of training in britain analysis and prescription in the last decade education and training et reform has become a major issue in many of the world s industrial powers one theme which runs throughout these reform initiatives is the need to adapt et systems to the changing economic environment these changes include the increasing integration of world markets the shift in mass manufacturing towards newly developed nations and the rapid development of new technologies most notably information technologies education and training are seen to play a crucial role in restoring or maintaining international competitiveness both on the macro level by easing the transition of the workforce into new industries and at the micro level where firms producing high quality specialized goods and services require a well qualified workforce capable of rapid adjustment in the work process and continual product innovation this paper will highlight the need for policy makers and academics to take account of the two way nature of the relationship between et and the economy

competitive banking bankers clubs and bank regulation this paper reexamines the view that banking regulation and central banking arose to counter market failures it investigates the factors that led bankers to form clubs and examines the regulations imposed by clubs on their members it suggests that such regulation is different from real world regulation and central banking and would be unlikely to arise spontaneously from free banking anyway it also suggests that this view is consistent with available evidence and compares it with the alternative views of gary gorton and donald j mullineaux 1987 and of charles a e goodhart copyright 1994 by ohio state university press

creating self sustaining high skill ecosystems geographic clusters of high technology companies are an increasingly important source of wealth and job creation in the advanced industrial countries this article provides a framework for understanding the conditions that give rise to these self sustaining high skill ecosystems hses that is based on the cases of the highly successful biomedical and computer hardware and software firms clustered in northern and southern california the framework identifies four requirements that hses share in common with natural ecosystems a catalyst to trigger the start of their development ongoing nourishment a supportive host environment and a high degree of interdependence among the actors in the system the framework is then applied to the uk identifying those policy options that are necessary for gaining greater returns from the uk s strong research base

can we improve the structure of financial systems 1993 the main theme of this paper is that several of the characteristics of our present western monetary and banking systems have been crucially dependent on the particular temporal process of historical development and are not an essential feature of more fundamental preferences or technological conditions they exist in part because we take them for granted it is the purpose of this paper to examine what might change in both theory and practice if some of these inessential characteristics were to be changed

the geographical concentration of labour market disadvantage this paper argues that british welfare to work policies are inadequate given the geographical concentration of worklessness in northern regions and in cities and former coalfields while unemployment has been converging geographically inactivity has not all the welfare to work target groups youth unemployed long term unemployed lone parents the long term sick and partners of the unemployed have closely similar geographical distributions official arguments that there are adequate job vacancies everywhere are shown to be flawed the geography of worklessness is largely explained by the weakness of adjustment through migration and commuting to the loss of jobs in manufacturing and mining the cities being particularly affected by urban rural manufacturing shift policy needs to promote more relevant employment in high unemployment areas through increased spending on derelict land reclamation transport and other infrastructure the case for more supportive policies towards manufacturing should also be considered

fishing in different pools job search strategies and job finding success in canada in the early 1980s this article examines the job search methods of jobless workers and emphasizes sample selectivity in choice of job search strategies especially use of public employment agencies longitudinal data from the labour force survey of canada for 1981 1983 and 1986 indicate that job search methods change with the business cycle and that many people find jobs without any reported search the determinants of job search success also vary substantially over the business cycle implying a substantial social return to public employment agencies at the 1983 trough of the recession but no noticeable benefits when aggregate unemployment is relatively low

old industrial regions and employability inactivity has been growing across the developed world and is especially high in old industrial areas a general move towards more flexible labour markets and the restructuring in these regions ove

public employment agencies and unemployment spells reconciling the experimental and nonexperimental evidence econometric evidence strongly suggests that unemployed job seekers who use the services of a public employment agency pea have longer unemployment spells than those choosing alternative search methods yet in some well designed u s experiments increased use of pea services has been associated with faster transitions intojobs the author argues that the nonexperimental studies may be biased toward finding a positive relationship between unemployment spell duration and pea use because they ignore the possibility that peas are chosen by manyjobseekers only after other search methods have been tried unsuccessfully and a period of unemployment has elapsed an analysis of u k survey data with information on the timing of pea use in 1987 88 supports that hypothesis

the mechanics of indirect convertibility this paper sets out the mechanics and equilibrating processes of indirectly convertible monetary systems in which currency issuing banks redeem their currency with redemption media of the same value as the commodity or commodity basket that defines the dollar it goes on to investigate the paradox of indirect convertibility and suggests that indirect convertibility is feasible despite the paradox finally it assesses the systems of fisher hall and others that have been suggested as alternatives to indirect convertibility but concludes that these alternative systems are open to serious objections copyright 1995 by ohio state university press

internationalization as a strategy to overcome industry barriers an assessment of the marine energy industry abstract research on conditions to develop new innovations within emerging renewable energy industries is often done with a national focus however recent research on international entrepreneurship has revealed that firms operate on international levels very early in their life time thus based on former research on international entrepreneurship and case examples we build the propositions that firms in the marine energy industry use internationalization as a strategy to overcome industry barriers our primary source of data is a unique dataset from a global survey of all the companies in the marine energy industry who are aiming to commercialize a wave or tidal energy device this paper is organized in two steps first we identified the most challenging industry barriers perceived by companies second we use these to form propositions which we assess through empirical data the two most challenging barriers perceived by the companies are need for capital and need for supportive political schemes our findings reveal that internationalization certainly is a common strategy to access capital and attractive support schemes in foreign countries the early internationalization has implications for researchers managers and policy makers

the suppression of state banknotes a reconsideration george selgin it is generally believed that congress in imposing a prohibitive 10 tax on state banknotes in 1865 made the public better off by doing away with inferior brands of currency while simultaneously helping finance the civil war by stimulating bond sales to national banks in truth the tax served neither purpose the true purpose of the 10 tax was not to enhance bond sales or to improve the quality of the currency but to offset the inflationary effects of greenbacks and national banknotes in the long run the public might have been better off had state banks retained their right to issue currency jel g21 n21 let us have a bank currency that will be recognized in the next town a currency that will be recognized in new york philadelphia boston new orleans chicago or any other part of the united states representative john f farnsworth illinois april 28 1864 congressional globe 38th congress 1st session 1934 i f the national banks with the great advantages which they enjoy cannot compete successfully with the state banks it simply shows that the latter subserve better the interests of the business community and should not be destroyed representative francis kernan new york february 16 1865 congressional globe 38th congress 2d session 833 i introduction during the civil war a 10 tax was placed on any issuance of notes of state chartered or incorporated banks deliberately forcing state banks out of the paper currency business and making the regulation and issuance of currency a prerogative of the federal government and of federally chartered national banks this paper reexamines the congressional decision to suppress state banknotes american monetary historians have conventionally viewed the decision as reflecting 1 the public s intolerable disgust with an unregulated currency hammond 1957 11 compare dunbar 1922 220 and 2 the government s desire to boost the demand for national bank charters so as to expand the market for its debt e g hughes and cain 1998 373 74 dowd 1992 230 i plan to argue that neither view accounts adequately for the 10 tax the first view in particular begs important questions that have gone unaddressed if state banknotes were clearly inferior to national banknotes why was a prohibitive tax needed to drive them out of circulation just how were consumers supposed to benefit from having their choices restricted i explore several responses to these questions and ultimately conclude that consumers considered some state banknotes to be just as desirable as their national bank counterparts i argue that the 10 tax served not to overcome any banknote market failure but to force the withdrawal of relatively high quality state banknotes i then proceed to show that the tax was not needed to secure adequate bond sales to national banks proponents of the tax were striving not to increase the number of applications for national bank charters but to limit growth in the aggregate money stock i conclude by suggesting that because state banks of issue could have accommodated market demands that national banks failed to satisfy consumers might have been better served had state banknotes been allowed to survive ii the chase plan when the first shots of the american civil war were fired at fort sumter the paper currency of the united states consisted of over 200 million in banknotes issued by nearly 1 500 state chartered banks the quality of these banknotes varied according to their issuers management and regulatory environment 1 some banknotes circulated at par only near their source and at fluctuating discounts elsewhere so that persons carrying notes from state to state risked incurring currency exchange losses of the sort borne by international travelers today a few were subject to especially heavy discounts or were refused altogether because their issuers solvency was in question

friedman versus hayek on private money review essay abstract few areas of economic activity can claim as long and unanimous a record of agreement on the appropriateness of governmental intervention as the supply of money benjamin klein 1974 p 423

reconnecting the long term unemployed to labour market opportunity the case for a local active labour market policy campbell m 2000 reconnecting the long term unemployed to labour market opportunity the case for a local active labour market policy reg studies 34 655 668 this paper argues that the development of a local active labour market policy can make a valuable contribution to reconnecting the long term unemployed to labour market opportunities such an approach is broadly consistent with the evolving eu and uk government policy agendas but it is argued the content and nature of local action needs to be informed by a sound understanding of the causes of long term unemployment and the lessons that can be learnt from studies of the effectiveness of previous active labour market policy interventions at national and local level a strategic framework is proposed which can be used as a means of examining current policy and as an approach to developing local policy campbell m 2000 reintegrer les chomeurs de longue duree dans le marchedu travail pour une politique en faveur d un marchedu travail actif

has government any role in money abstract recent interest in monetary reform has been sparked by the emergence of a world irredeemable paper money system in light of this interest we review the current validity of four good reasons friedman advanced in 1960 to rationalize government intervention we conclude that the forces that produced government involvement in the past will persist deregulation of financial intermediaries is desirable on grounds of market efficiency though it is an open question whether government should continue as lender of last resort we expect that the present world fiat money standard will neither degenerate into hyperinflation nor revert to a commodity standard

individual wealth reservation wages and transitions into employment we investigate the relationship between financial wealth reservation wages and labor market transitions wealth is assumed to affect the level of the reservation wage and the employment probability we test for the validity of this assumption by estimating a simultaneous equations model of reservation wages labor market transitions and wealth the data used for the analysis relate to a sample of unemployed job searchers we use subjective information on the reservation wage wealth is found to have a significantly positive impact on the reservation wage the overall impact of wealth on the employment probability is negative though small

unemployment vacancies and the long term unemployed this paper is concerned with two related features of the labor market the ratio of long term to total unemployment r and the relat ionship between unemployment and vacancies the u v curve a model is developed to explain r in terms of the average probability that an unemployed person will find a job within a particular time period when the authors add the empirically confirmed hypothesis that this exit probability is lower for the long term than it is for the short term unemployed the n the model is consistent with the observed pattern of unemployment copyright 1988 by royal economic society

laissez faire monetary theorists in late nineteenth century america economists have recently begun to reconsider many forms of regulation of money and banks from what may be termed a laissez faire perspective some have questioned fundamentally the rationale for any government role this development raises an interesting question for historians of thought what intellectual support did the concept of a free market monetary system receive in the 19th century the heyday of classical liberalism and laissez faire thought this paper takes up the question by critically surveying american monetary writings from the last half of the 19th century 2 we find that the idea of a laissez faire monetary policy was never very popular in the united states though it did have proponents whose work was often insightful most of the relevant literature was written in response to consequences wrought by the monetary legislation of the civil war that legislation included not only the national bank acts 1863 4 but also an ancillary measure effective 1866 placing a prohibitive tax on state bank notes these laws forced banks of issue to become national banks and thus to buy federal bonds as collateral for their notes which had the intended effect of creating an extra demand for the federal government s wartime debt in addition congress authorized the issue of legal tender greenback currency by the treasury a frequent theme in the post bellum monetary literature was the alleged deficiency or inelasticity of the currency supply some the greenbackers and silverites wanted the government to increase its contributions to the money supply others especially toward the end of the century argued for the establishment of a centralized agency with special powers of note issue a handful of writers renewed the radical jacksonians campaign for laissez faire in money and banking 3 in their view the defects of existing arrangements could best be solved by deregulation of banking and by removal of the federal government from the business of supplying money

continuity and evolution in an old industrial region the labour market dynamics of the rise and fall of northern rock dawley s marshall n pike a pollard j and tomaney j continuity and evolution in an old industrial region the labour market dynamics of the rise and fall of northern rock regional studies the northern rock mortgage bank was a high profile casualty of the credit crunch in 2007 an evolutionary geographical political economy approach demonstrates that northern rock s growth and decline was shaped by its location in an old industrial region and echoes the historical position of the peripheral region in the spatial division of labour a longitudinal investigation focuses on the labour market dynamics of northern rock s rapid growth and decline on the north east of england the northern rock case highlights the enduring occupational structure of the region s labour market and shows how older industrial regions suffer from a process of occupational disadvantage that restricts their ability to adapt to economic change

a laissez faire approach to monetary stability this paper develops some diverse hints for a new monetary system offered separately by fischer black eugene fama and robert e hall for reasons that will become evident though we should perhaps say payments system instead of monetary system none of the economists mentioned has actually proposed the particular system set forth here nor examined all its properties and we call it the bfh system not to implicate them but only to give credit for some component ideas and to have a convenient label l regardless of who if anyone may actually advocate the system contemplating it is instructive it illuminates by contrast some characteristics of our existing and recent systems

state restrictions on local debt their role in preventing default abstract default by a local government can impose a negative externality upon other localities within a state because the state s ability to enforce debt repayment depends upon the proportion of municipalities favoring repayment localities benefit from maintaining their state s reputation for enforcement hence jurisdictions not wishing to default favor enforcement of repayment by other jurisdictions a debt limit increases support for enforcement by reducing the proportion of municipalities preferring default we characterize when such a limit is optimal we also examine the role of special districts which typically neither are subject to a debt ceiling nor fully backed by the jurisdiction

legal restrictions and monetary evolution abstract the legal restrictions school of monetary theory hypothesizes that the use of ordinary currency would die out if legal tender laws were abolished instead interest bearing instruments would be used in transactions this paper refutes the claim as far as it applies to money as a medium of exchange the network externality or coordination convention properties of a medium of exchange imply that the strategy of holding interest bearing instruments is not necessarily individually dominant there is a critical mass of users that has to be assembled before a switch can occur

unemployment questions and some answers in more or less every country in the oecd unemployment was lower in the decades following the second world war than in any other period of comparable length either before or since for example in britain unemployment has exceeded 5 in every peacetime decade from 1850 onwards except for the 1950s and 1960s alternatively as we can see in table 1 p 779 average unemployment in the 1980s and 90s is higher generally much higher than in the 1960s in every country considered why this is so is one of the questions which underlies this paper a second question which is also illustrated in the unemployment numbers presented in table 1 p 779 concerns the causes of the enormous variation in unemployment rates across the oecd countries as we shall see these are difficult questions the first in particular is one for which we do not have a complete answer by this i do not mean that we do not have theories which are broadly consistent with these numbers in fact we have theories consistent with more or less any numbers what we lack is a satisfactory empirical explanation of the time series pattern of oecd unemployment in what follows we remain focused on these two questions first considering the theoretical background and then looking at some possible answers we finish with some speculative conjectures on the first question

interpreting new evidence about china and u s silver purchases abstract this paper offers a reinterpretation of the influence on china of america s silver policy in the early 1930 s recently compiled evidence about events in china are described and interpreted in light of a model of free banking under a commodity standard our interpretation is that the u s silver purchase program did not set off a chain of bad economic events which eventually forced china off silver and onto a fiat standard rather china was forced off silver by its own government which wanted to make itself the beneficiary of the capital gain associated with the appreciation of silver and to relieve itself of the restrictions that are imposed on government finance by a commodity standard

mismatch in local labour markets in central scotland the neglected role of demand this paper presents a model of mismatch unemployment in two local labour markets in scotland a total of seven possible sources of such unemployment are identified and examined within the context of a predominantly urban area and a mixed urban rural area these are contiguous travel to work areas ttwas the paper attempts to identify what causes recruitment difficulties and discusses the extent to which the problem is demand induced a survey of employer practices and attitudes is followed up by multiple regression analysis to determine the effect of these practices on vacancy duration the analysis shows that there are certain recruitment practices and inherent characteristics of employers which result in job offers that are either unattractive or inaccessible to the unemployed it is argued that design of policy for implementation at the local level needs to take account more explicitly of the demand side of the local labour market than has so far been evident in the uk approach to the skill mismatch issue

are the unemployed unemployable abstract this paper develops a matching model of the labor market under wage rigidity when hiring decisions are irreversible there are two types of workers the skilled and the unskilled the model is used to analyze whether technological advances may have increased unemployment it is shown that it is likely to be so if they are associated with an increase in the productivity and or the supply of skilled workers relative to unskilled workers these effects are stronger when hiring decisions are more irreversible

business cycles and compositional variation in u s unemployment in this article we study u s unemployment dynamics using grouped unemployment data from the current population survey over the period 1968 1992 we estimate a model that traces variation in these unemployment data both over time and between demographic groups back to the underlying variation in the inflow and the outflow in turn we model the outflow as a transition process in which we allow the exit probabilities to depend on calendar time duration and demographic group we use the estimation results to provide a decomposition of aggregate u s unemployment dynamics in various incidence and duration components

do open market operations matter theory and evidence from the second bank of the united states abstract modigliani miller theorems for open market operations describe conditions under which central bank portfolio rearrangements will have no consequences for allocations relative prices or the time path of the price level such theorems for government owned central banks have limited applicability and hence are difficult to test we develop a modigliani miller theorem for privately owned central banks and test its implications using data from the second bank of the united states the data are consistent with an absence of price level effects due to open market operations and are inconsistent with standard versions of the quantity theory of money

free banking and information asymmetry a traditional argument against free banking is that it will collapse because of information externalities it is impossible for depositors to tell whether a high deposit rate offered by a bank is due to its high efficiency or risky lending strategy this paper shows that in a separating equilibrium a higher quality bank offers a lower deposit rate and holds a smaller proportion of risky loans than a lower quality bank to signal its underlying quality hence free banking is not inherently unstable the empirical results for the hong kong banking system during 1964 65 are consistent with the hypothesis of a separating equilibrium

the concept of employability the concept of employability plays a crucial role in informing labour market policy in the uk the eu and beyond this paper analyses current and previous applications of the term and discusses its value as an exploratory concept and a framework for policy analysis it then traces the development of the concept discusses its role in current labour market and training strategies with particular reference to the uk and seeks to identify an approach to defining employability that can better inform labour market policy by transcending explanations of employment and unemployment that focus solely on either supply side or demand side factors although the literature offers a range of definitions of employability many policy makers have recently used the term as shorthand for the individual s employability skills and attributes it is argued that this narrow usage can lead to a hollowing out of the concept of employability the paper concludes by presenting a broad framework for analysing employability built around individual factors personal circumstances and external factors which acknowledges the importance of both supply and demand side factors

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

competitive payments systems comment view lawrence h white criticizes several recent proposals for monetary reform including what we 1983 call the bfh system under this system the government precluded from issuing money would merely define a new unit of account and encourage the unit s general adoption by using it in all its own pricing contracting and accounting the definition would run in terms of so comprehensive a bundle of precisely gradable items with continuously quoted prices that the new unit would have a stable general purchasing power

asymmetric information and optimal bank reserves one traditional argument in favor of bank reserve requirements holds that since a b ank and its depositors are asymmetrically informed as to the bank s reserve position and its portfolio the bank will hold too few reserves and too risky a port folio this being the case presumably a central banking authority is equipped t o impose and to monitor a minimal reserve requirement yielding a pareto superior outcome this paper analyzes this position in the context of a formalmodel and shows that at least for some parameters of the model there is such a case for a minimal reserve requirement copyright 1987 by ohio state university press

explaining the demand for free bank notes abstract this paper explains why the risky notes of banks established during the free banking era 1837 1863 were demanded even when relatively safe specie gold and silver coin was an alternative free bank notes were demanded because they were priced to reflect the expected value of their backing the empirical evidence supports this explanation specifically in new york wisconsin and indiana the expected value of backing was sufficient for free bank notes to circulate at par which they did in minnesota the backing for notes was very poor they exchanged well below par being treated as small denomination securities

the local low skills equilibrium moving from concept to policy utility it is more than three decades since the publication of finegold and soskice s 1988 influential article the failure of training in britain analysis and prescription this widely cited publicati

the emancipation proclamation confederate expectations and the price of southern bank notes we examine the behavior of a semimonthly series of the confederate dollar price of bank notes these notes traded at par with confederate dollars from october of 1861 until november 5 1862 we use a model of the demand for two currencies to argue that this departure from par results from altered southern expectations after the 1862 congressional elections assured the enactment of the emancipation proclamation previously southerners believed a win or a negotiated settlement would allow a return to the union intact when these expectations changed bank notes appreciated against confederate dollars in addition our empirical work shows that notes appreciated following northern victories

returning to work regional determinants of re employment after major redundancies abstractusing matched employer employee data on roughly 429 000 workers made redundant from large plant closures or major downsizing in sweden between 1990 and 2005 this paper analyses the role of the regional industry mix specialization related and unrelated variety in the likelihood of returning to work the results show that a high presence of same or related industries speeds up the re employment process while high concentrations of unrelated activities do not the role of related activities is particularly evident in the short run and in regions with high unemployment consequently the prospect of successful diversification is enhanced in regions with related industries

are labour markets necessarily local spatiality segmentation and scale this paper draws on recent debates about scale to approach the geography of labour markets from a dynamic perspective sensitive to the spatiality and scale of labour market restructuring its explo

labour underutilisation in metropolitan labour markets in australia individual characteristics personal circumstances and local labour markets there has been a growing awareness that the issue of labour market disadvantage is substantially greater than merely considering unemployment and the ability to find a job there is an increasing l

private money and banking regulation we show that the regulation of lending practices is desirable for the optimal provision of private money in an environment in which bankers cannot commit to repay their creditors neither an unregulated banking system nor a form of narrow banking in which banks hold 100 in reserves can provide the socially efficient amount of money if bankers provided such an amount then they would prefer to default on their liabilities we show that a regulation that increases the value of the banking sector s assets e g by limiting competition in credit markets will mitigate the commitment problem if the return on the banking sector s assets is made sufficiently large then it is possible to implement an efficient allocation

bank panics government guarantees and the long run size of the financial sector evidence from free banking america governments attempt to increase the confidence of financial market participants by making implicit or explicit guarantees of uncertain credibility confidence in these guarantees presumably alters the size of the financial sector but observing the long run consequences of failed guarantees is difficult we look to america s free banking era and compare the consequences of a broken guarantee during the indiana centered panic of 1854 to the panic of 1857 in which guarantees were honored our estimates of a model of endogenous market structure indicate substantial negative long run consequences to financial depth when panics cast doubt upon a government s ability to honor its guarantees

banks free banks and u s economic growth the federalist financial revolution may have jump started the u s economy into modern growth but the free banking system 1837 1862 did not play a direct role in sustaining it despite lowering entry barriers and extending banking into developing regions we find in county level data that free banks had little or no effect on growth the result is not just a symptom of the era as state chartered banks seem to have strong and positive effects on manufacturing and urbanization jel g21 n21 o43

solvency regulations and the management of banking risks abstract in the recent years international banking authorities have succeeded implementing harmonized solvency regulations however two stages can be distinguished 1 up to 1993 a rigid approach has prevailed with the cooke ratio for credit risks and the standardized approach to market risks 2 since then a movement towards flexibility has been acknowledged notably with the validation of internal models of the var type and the precommitment proposal of kupiec and o brien the objective of this article is to discuss the pros and cons of these different approaches within a coherent conceptual framework that applies contract theory to the regulation of banking

extending employability or solving employers recruitment problems demand led approaches as an instrument of labour market policy for years labour market policy in the uk has been dominated by activation measures that seek to increase employment levels among the unemployed this supply side focus emphasises individual charac

scottish banking before 1845 a model for laissez faire during the free banking era in eighteenth and early nineteenth century scotland there were a number of legal restrictions affecting the evolution of the system scottish banking was characterized by restrictions on small denomination and interest bearing notes there were also restrictions inhibiting the development of capital markets and entry into banking furthermore the bank of england operated as a shadow central bank for the scottish system these considerations call into question the use of the scottish banking experience as the appropriate model for laissez faire and as evidence against the legal restrictions theory of money and the new monetary economics copyright 1989 by ohio state university press

the causes of free bank failures a detailed examination abstract in this paper we propose and test a new explanation of bank behavior during the free banking era 1837 1863 arguing against the conventional view that free bank failures were due to wildcat banking we claim they were caused by falling asset prices confronting both explanations with our new and detailed data set developed from state auditor reports we find that the falling asset price explanation of free bank failures explains far more failures than does the wildcatting hypothesis