institutional determinants of labor reallocation in transition the transition process differed in the countries of the former soviet union fsu and those of central and eastern europe cee in terms of reallocation of labor real wage employment and output adjustment we sift through the theoretical and empirical literature to find an explanation for these diverging adjustment trajectories and conclude that they can be explained by the fact that the cee countries adopted social policies that upheld wages at the bottom of the distribution forcing the old sector to restructure or collapse while the fsu countries allowed wages to free fall not forcing the hand of the old sector

globalization veto players and welfare spending this article examines the role of globalization and its interaction with domestic political institutions veto players in shaping welfare spending in 18 advanced industrial countries from 1960 to 2000 first the author evaluates how integrated world markets have influenced welfare expenditures results suggest that globalization increased welfare spending in this sample second the author studies how domestic political institutions mediate the impact of globalization on welfare spending with a new data set on veto players for the years 1960 to 2000 the author finds that as the number of and ideological distance among veto players increases the upward pressure of globalization on welfare spending is reduced the results show that globalization has pressured states to expand welfare spending but the extent to which states have responded to pressure critically depends on the number of and ideological distance among veto players whose agreement is required to change welfare policy

unskilled migration a burden or a boon for the welfare state as relatively low earners migrants are net beneficiaries of the welfare state therefore in a static setup migration may be resisted by the entire native born population however it is shown that in a dynamic setup with a pension system which is an important pillar of any welfare state migration is beneficial to all income high and low and all age old and young groups when the economy has good access to international capital markets the pro migration feature of the dynamic model is weakened and possibly overturned when the economy does not have good access to such markets in this case to the extent that factor prices are significantly affected by migration because of low substitution between labour and capital low skill native born and possibly also high skill native born may lose

reforms and the real exchange rate the role of pricing to market abstract the paper investigates how endogenous markups affect the extent to which policy reforms can influence international competitiveness in a two country model where trade costs allow for international market segmentation we show that endogenous pricing to market behavior of firms acts as an important transmission channel of the policies by strengthening the degree of competition between firms product market deregulation at home leads to a reduction in domestic markups which generally leads to an improvement in the international competitiveness of the home country conversely the power of competitive tax policy to depreciate the real exchange rate is dampened as domestic firms take the opportunity of the labor tax cut to increase their markups the variability of markups also affects the normative implications of the reforms this indicates the importance of taking into account endogenous pricing to market behavior when intending to correctly evaluate the overall effects of the reforms

political and institutional determinants of fiscal policy in the european community in recent theoretical and empirical research the variation in political and institutional arrangements which may affect the process of national policy formation is examined in order to explain cross country differences with respect to fiscal policies pursued in this paper we build upon this literature and examine whether and how cross country differences in debt accumulation and public sector size of member countries of the european community during the 1980s can be explained we conclude that the growth of government debt is positively related to the frequency of government changes and negatively to sound budgetary procedures in countries with left wing governments the growth of the share of government spending in total output generally tends to be higher

labor market opportunities and women s decision making power within households abstract despite the perceived importance of labor market opportunities in shaping married women s outside option and their bargaining power within households as a result this link has received very little empirical attention using longitudinal data on who makes the decision on a wide range of issues within mexican households and data from the administrative records of the mexican social security institute this paper identifies the effects of relative changes in labor market opportunities for men and women on both working and non working women s decision making power i find that increases in labor market opportunities improve women s decision making power as well as children s health using differential labor demand shocks across mexican industries caused by china s admission to the wto gives similar results

industrial complexes in mexico implications for regional industrial policy based on related variety and smart specialization abstractindustrial complexes in mexico implications for regional industrial policy based on related variety and smart specialization regional studies the goal of this paper is to identify and analyze the location of industrial complexes in mexico with the purpose of providing an analytical foundation for the construction of regionally based industrial policies based on the principles of related variety and smart specialization that complement current national level policy efforts to promote investment and stabilize the real exchange rate the results of this analysis highlight distinct complexes located in particular portions of the country the location of these complexes points to several regional policy options that will better address regional heterogeneities in the distribution of industry employment as well as regional differences in workforce competencies infrastructure quality and extra regional linkages than have national level industrial policies

structural change the real exchange rate and the balance of payments in mexico 1960 2012 this paper estimates a structural model of the balance of payments with disaggregated exports manufactures and other and imports final and intermediate and a reduced form model of the trade balance for the mexican economy the analysis identifies structural changes in the composition of mexico s trade and the parameters that affect it across five subperiods marked by statistical breakpoints the results indicate that a tightening of the balance of payments constraint may account for the post liberalization slowdown in mexico s growth only during certain subperiods and that the impact of real exchange rate changes on the trade balance has diminished most likely as a result of the increasing integration of export industries into global supply chains the results also suggest an asymmetry whereby a country cannot sustain growth above the rate consistent with balance of payments equilibrium as expected but it can grow persistently below that rate when other constraints are more binding

integration and the structure of public spending he voluminous tax competition literature suggests that increased economic integration leads to reduced tax rates and suboptimal levels of government spending as countries compete for mobile factors of production integration may influence not only the size of the government but also the structure of public spending comprehensive studies analyzing the effect of integration on the overall structure of government spending are rare however this article fills this void by providing an empirical analysis of the effects of economic integration on the overall structure of public spending in a number of organisation for economic co operation and development countries using panel data on the different government spending components for the period 1970 to 2002 the authors find that integration negatively influences government consumption and investment but that there is no empirical evidence that transfers are positively or negatively affected by integration as suggested by the compensation and efficiency views respectively less

partisan politics and fiscal policy does the partisan character of governing parties play a role in the formation of fiscal policy the conventional view is that the left tends toward excessive deficits whereas the right practices a more prudent fiscal policy however strong arguments have been advanced that whatever room existed previously for partisanship in fiscal policy making has been sharply reduced by developments in recent decades these issues are examined with a series of models that have been estimated using data from 14 organization for economic cooperation and development countries for the period from 1961 through 1991 the evidence suggests that the relationship between partisanship and fiscal policy is contingent on macroeconomic conditions the evidence also suggests that these differences have been reduced over recent decades

social protection and economic integration the politics of pension reform in an era of capital mobility in the past two decades of the 20th century governments around the world began to apportion greater responsibility for old age income provision to individuals and market forces through the privati

the dynamism of mexican exports lost in chinese translation summary this paper analyzes the extent to which mexican exports have penetrated us markets in recent years and juxtaposes such an analysis with the performance of china we find that mexico s main non oil exports are losing dynamism and their relative share in the us market is either declining or growing slower than china s this trend is a new one and begins after china s entry into the wto a number of factors could explain these findings these include i the real appreciation of the real exchange rate of the peso relative to the us dollar combined with the trend toward undervaluation of the chinese currency ii the decline of public investment in mexico especially in infrastructure iii limited access to bank credit in mexico and iv the absence of government policy in mexico to help spur technological innovation and to strengthening its domestic backward and forward linkages

external shocks structural change and economic growth in mexico 1979 2007 summary this article finds that shocks to net financial inflows world oil prices the us growth rate and the lagged real exchange rate explain most of the fluctuations in mexico s annual growth since 1979 the article also estimates how the effects of these external constraints have changed since mexico s liberalization policies of the late 1980s and the formation of nafta in 1994 estimates of an investment function and other tests show that growth drives investment but not conversely in the short run investment is driven mainly by oil prices and the accelerator effect foreign direct investment has no significant impact 2008 elsevier ltd all rights reserved

globalization regionalism and labour markets should we recast the foundations of the eu regime in matters of regional rural and urban development globalization has been accused of being the source of many problems some claim that this would justify a fundamental change of the eu regime that takes international competitiveness of the economy as its point of departure this would have consequences for the present set up of the eu cohesion regime and thus also for the policy toolkits of individual regions the article analyses the effects of globalization and regionalism on labour markets it does so on the basis of an extensive review of the theoretical and empirical literature covering various strands of thought the survey shows that fears about negative effects are not justified provided a consistent set of policies is pursued so the review does not support claims for a change of the eu regime neither in matters of the macro aspects nor in matters of regional development and cohesion

oil and the euro area economy we examine the macroeconomic effects of different types of oil shocks and the oil transmission mechanism in the euro area a comparison is made with the us and across individual member countries first we find that the underlying source of the oil price shift is crucial to determine the repercussions on the economy and the appropriate monetary policy reaction second the transmission mechanism is considerably different compared to the us in particular inflationary effects in the us are mainly driven by a strong direct pass through of rising energy prices and indirect effects of higher production costs in contrast euro area inflation reacts sluggishly and is much more driven by second round effects of increasing wages the monetary policy reaction of the ecb to oil shocks is also strikingly different compared to the fed the inflation objective relative to the output stabilization objective appears more important for euro area monetary authorities than for the fed third there are substantial asymmetries across member countries these differences are due to different labour market dynamics which are further aggravated by a common monetary policy stance which does not fit all gert peersman and ine van robays

remodeling the competition for capital how domestic politics erases the race to the bottom this paper proposes and tests a new formal model of the competition for capital using the analogy of a tournament as a substitute for the race to the bottom model our key insight is that political costs that accompany legislating have both direct and indirect effects on the likelihood and scale of reforms while countries with higher political costs are less likely themselves to enact reforms the presence of these costs also reduces competing countries incentives to reform regardless of their own political costs domestic politics therefore mitigates the pressures for downward convergence of tax policy despite increased capital mobility we examine the capital tax policies in oecd countries during the period from 1980 to 1997 and find that states are sensitive to tax reforms in competitor countries although their responses to reforms are mediated by their own domestic costs to reform we define two potential sources of political costs of reform transaction costs due to the presence of multiple veto players in the legislative process and constituency costs due to ideological opposition to policy changes that benefit capital our evidence reveals that a reduction in these costs either domestically or abroad increases the likelihood that a country enacts tax reforms hat are the policy consequences of the elimination of various barriers to international capital and labor mobility robert frost in mending wall instructed that good fences make good neighbors scholars have increasingly expressed this sentiment s converse i e the pessimistic viewpoint that as the mobility of factors of production increases international competition assumes a beggar thy neighbor character when fences separate countries and make it difficult for factors of production to move from country to country governments can operate essentially as monopolistic suppliers of services governments can extract a price from the owners of productive resources in the form of taxes or can place regulatory restrictions on production without fear that factors of production will emigrate when the fences fall and governments must compete with each other for the same resources a state s or country s ability to tax or regulate diminishes in the extreme countries lose sovereignty over domestic policymaking e g andrews 1994 and lee and mckenzie 1989 the model that most scholars employ implicitly or explicitly to understand international or interstate competition is known commonly by its central prediction the race to the bottom e g oates 1972

international business cycles the quantitative role of transportation costs we evaluate the quantitative effects of introducing costs of transportation into an international trade model we model these costs through the introduction of international transportation services sector costs of transportation have substantial long run effects on welfare and may impact the pattern of trade however the business cycle effects on relative price movements and on international comovements are less pertinent since decreased trade volatility counteract the effects of transportation cost variations nevertheless it is also shown that costs of transportation combined with delivery lags go a long way towards resolving in particular the international comovement puzzle

effects of government characteristics on fiscal deficits in 18 oecd countries 1961 1994 political economists studying industrialized countries have claimed that certain institutional characteristics of governments such as majority status the number of parties in government and stability affect levels of public deficits they have specifically argued that weak unstable governments produce higher deficits than strong stable ones the author tests the validity of such claims by examining empirical data from 18 organization for economic cooperation and development oecd countries between 1961 and 1994 it is shown that evidence does not support the deficit prone weak governments thesis if anything there is some evidence to suggest that deficits are lower under what political economists call weak unstable governments such as minority governments coalition governments or less durable governments it is further shown that there is extremely limited evidence to support another line of argument that the strength stability of governments does not necessarily create deficits but does affec

the causes of welfare state expansion deindustrialization or globalization an influential line of argument holds that globalization causes economic uncertainty and spurs popular demands for compensatory welfare state spending this article argues that the relationship between globalization and welfare state expansion is spurious and that the engine of welfare state expansion since the 1960s has been deindustrialization based on cross sectional time series data for fifteen oecd countries the authors show that there is no relationship between globalization and the level of labor market risks in terms of employment and wages whereas the uncertainty and dislocations caused by deindustrialization have spurred electoral demands for welfare state compensation and risk sharing yet while differential rates of deindustri alization explain differences in the overall size of the welfare state its particular character in terms of the share of direct government provision and the equality of transfer payments is shaped by government partisanship the argument has implications for the study and the future of the welfare state that are very different from those suggested in the globalization literature

the role of shocks and institutions in the rise of european unemployment the aggregate evidence two key facts about european unemployment must be explained the rise in unemployment since the 1960s and the heterogeneity of individual country experiences while adverse shocks can potentially explain much of the rise in unemployment there is insufficient heterogeneity in these shocks to explain cross country differences alternatively while explanations focusing on labour market institutions explain current heterogeneity well many of these institutions pre date the rise in unemployment based on a panel of institutions and shocks for 20 oecd nations since 1960 we find that the interaction between shocks and institutions is crucial to explaining both stylised facts

social democracy christian democracy constitutional structure and the welfare state the literature on the determinants of welfare state effort displays many inconsistencies and contradictins this article takes imoprtant stepts toward resolving these issues with the use of pooled

structural reforms in a debt overhang we assess the eects of reforms in product and labor markets in an econ omy where credit restrictions and long term debt combine to produce a persis tent recession with slow deleveraging following a negative nancial shock we show that reforms that reduce markups in product markets stimulate output and employment even in the short run despite their de ationary eects by favouring a faster recovery of investment and collateral values product mar ket reforms bring forward the end of the deleveraging phase this last eect is missing in the case of labor market reforms the short run eects of which are sensitive to the response of trade ows and to debt maturity

endogenous market structures and the business cycle we propose a flexible prices model where endogenous market structures and search and matching frictions in the labor market interact endogenously the interplay between firms endogenous entry strategic interactions among producers and labor market frictions represents a strong amplification channel of technology shocks on labor market variables and helps addressing the unemployment volatility puzzle consistently with u s evidence new firms create a large fraction of new jobs and grow faster than more mature firms net firms entry is procyclical and the price mark up is countercyclical

counterfiscal policies and partisan politics evidence from industrialized countries according to partisan theories of macroeconomic policy left wing parties are more concerned with unemployment while right wing parties tend to weigh the costs of inflation higher an implication of partisan theories is that partisan policy differences should depend on the state of the economy with left wing governments conducting relatively more expansive policies during recessions we test whether left wing governments are more favourably inclined towards countercyclical fiscal policies than their right wing counterparts using a panel data set of 18 oecd countries from 1980 to 1992 the results are supportive of partisan theories the structural deficit is significantly higher under left wing governments when unemployment is high or rising while the ideology of the government party parties has no significant impact on the structural deficit when unemployment is low or falling

redistribution pork and elections why might citizens vote against redistributive policies from which they would seem to benefit many scholars focus on wedge issues such as religion or race but another explanation might be geographically based patronage or pork we examine the tension between redistribution and patronage with a model that combines partisan elections across multiple districts with legislation in spatial and divide the dollar environments the model yields a unique equilibrium that describes the circumstances under which poor voters support right wing parties that favor low taxes and redistribution and under which rich voters support left wing parties that favor high taxes and redistribution the model suggests that one reason standard tax and transfer models of redistribution often do not capture empirical reality is that redistributive transfers are a less efficient tool for attracting votes than are more targeted policy programs the model also underlines the central importance of party discipline during legislative bargaining in shaping the importance of redistribution in voter behavior and it describes why right wing parties should have an advantage over left wing ones in majoritarian systems

stages of diversification this paper studies the evolution of sectoral concentration in relation to the level of per capita income we show that various measures of sectoral concentration follow a u shaped pattern across a wide variety of data sources countries first diversify in the sense that economic activity is spread more equally across sectors but there exists relatively late in the development process a point at which they start specializing again we discuss this finding in light of existing theories of trade and growth which generally predict a monotonic relationship between income and diversification

immigration integration and support for redistribution in europe immigration poses individual or collective economic risks that might increase citizen support for government redistribution but it can also generate fiscal pressure or undermine social solidarity to diminish such support these offsetting conditions obscure the net effects of immigration for welfare states this article explores whether immigration s effects are mediated by the economic and social integration of immigrants integration can be conceptualized and measured as involving the degree to which immigrants suffer unemployment rates depend on welfare state benefits and harbor social attitudes similarly to the native population such integration may alter how immigration reduces solidarity and imposes fiscal and macroeconomic pressures but does not much alter how immigration spurs economic risks for natives where migrants are more integrated by such measures immigration should have less negative or more positive implications for native support for government redistribution and welfare states than where migrants are less integrated the article explores these arguments using survey data for twenty two european countries between 2002 and 2010 the principal finding is that economic integration more than sociocultural integration softens the tendency of immigration to undermine support for redistributive policies

labour market implications of eu product market integration eu labour markets effects of greater product market integration european labour markets are in a state of flux due to the changing market situation induced by international integration this process affects wage formation through more fierce product market competition and increased mobility of jobs this development is by some observers taken to enforce labour market flexibility while for others it signals an erosion of social standards and in turn possibly the welfare society since labour is not very mobile in europe the effects of international integration on labour markets are mostly indirect via product market integration we review the channels through which product market integration affects labour markets and perform an empirical analysis of the convergence and interdependencies in wage formation among eu countries we find that integration is changing labour market structures and inducing wage convergences as well as stronger wage interdependencies but it is a gradual process moreover the present study does not support the view that international integration will lead to a race to the bottom and rapidly erode domestic labour markets standards nor that it will relieve politicians of the need to consider labour market reforms to improve labour market performance torben m anderson niels haldrup and jan rose sorensen

immigration globalization and unemployment benefits in developed eu states at a time of mounting concern about how traditional welfare states will react to globalization there has been increasing interest in specifying how global economic forces affect welfare policies in industrialized states building on theories from the political economy and comparative institutional literatures we analyze the influence of an important aspect of globalization the flow of immigration focusing on states in the european union we present a theoretical model that illustrates the interactive relationships between immigration eu labor market integration and domestic institutions our findings highlight how immigration in conjunction with domestic political institutions affects unemployment provisions while labor market integrative forces remain in the background the story of immigration and unemployment compensation in the eu is less about the opening of borders and the market forces of integration and more about the domestic political pressures

why a stubborn conservative would run a deficit policy with time inconsistent preferences a conservative government in favor of a low level of public consumption knows that it will be replaced by a government in favor of a larger level of public consumption we show that the resulting level of public consumption is in between the levels the two governments would choose if each were in power both in the present and in the future in particular we show that if the conservative government is more stubborn in a particular sense than the succeeding government the conservative government will borrow more than it would had it remained in power in the future

are wages and productivity converging simultaneously in euro area countries a convergence analysis is applied to wages and productivity for euro area countries in the period from 1981 to 2001 the results show a reduction in the dispersion of wages and unit labour costs but not in productivity different patterns are found for real and nominal wages higher levels of inflation in countries with higher growth rates of unit labour costs have caused nominal wages to move towards equalization moreover disparities in all the variables have remained more or less the same since 1997 suggesting that the establishment of a single currency area has not accelerated the process of wage equalization

politics institutions and welfare spending in industrialized democracies 1960 82 electoral turnout as well as left and center governments increase welfare effort that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional and junior coalitional parties and that relatively neocorporatist centralized and traditionalistic polities are high on welfare effort overall our findings suggest that contrary to many claims both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort

globalization democracy and effective welfare spending in the developing world the literature on the effects of globalization on social policy and welfare and the parallel literature on the effects of democracy operate in mutual isolation to a surprising degree this article extends the debate on the welfare state in the developing world by examining the social policy reactions of democratic and authoritarian governments to globalization using unbalanced panel data on 57 developing nations and considering social security and health and education spending the authors examine whether democratic and authoritarian regimes exhibit similar or different social spending priorities in the context of increasing economic openness the results show that social spending in hard authoritarian regimes is more sensitive to the pressures of globalization than in democratic or intermediate regimes

the impact of the yuan dollar exchange rate on mexican manufacturing exports to the us a cointegration approach this paper makes use of three econometric methods and three time intervals to evaluate the long term effects of several key variables on mexican manufacturing exports to the us the evidence across econometric techniques and sample periods systematically indicates that i a real depreciation of the yuan dollar exchange rate reduces mexican manufacturing exports by lowering the price of chinese goods in the us market ii a depreciation of the peso dollar real exchange rate generates a strong supply side effect due to the high import content of mexican manufacturing exports which ultimately leads to lower rather than higher sales in the us and iii external demand and labour productivity are positively related to manufacturing exports whereas real wages are negatively related therefore a falling external demand for mexican manufacturing products or a real depreciation of the chinese currency could to some extent be offset by increasing labour productivity faster than wages these findings reflect two fundamental problems of the mexican economy i low investment in high quality formal instruction and proper training programs which gives rise to severe bottleneck points for faster labour productivity growth and ii excessive reliance of the export oriented manufacturing industry on foreign suppliers of intermediate inputs

political cycles and cyclical policies we test how government revenue and expenditure depend on ideology elections and economic activity we show how fiscal forecasts can be used to identify the determinants of government revenue and expenditure the approach is illustrated using a unique unpublished swedish data set of fiscal forecasts and forecasts of economic activity we find partisan effects but no election effects revenue and expenditure but also the fiscal surplus are lower with right wing governments fiscal policy has been countercyclical revenue varies positively with nominal earnings expenditure varies negatively with real gdp

taking time seriously dramatic world change has stimulated interest in research questions about the dynamics of politics we have seen increases in the number of time series data sets and the length of typical time series but three shortcomings are prevalent in published time series analysis first analysts often estimate models without testing restrictions implied by their specification second researchers link the theoretical concept of equilibrium with cointegration and error correction models third analysts often do a poor job of interpreting results the consequences include weak connections between theory and tests biased estimates and incorrect inferences we outline techniques for estimating linear dynamic regressions with stationary data and weakly exogenous regressors we recommend analysts 1 start with general dynamic models and test restrictions before adopting a particular specification and 2 use the wide array of information available from dynamic specifications we illustrate this strategy with data on congressional approval and tax rates across oecd countries

short term pain for long term gain market deregulation and monetary policy in small open economies abstract this paper explores the effects of labor and product market reforms in a new keynesian small open economy model with labor market frictions and endogenous producer entry we show that it takes time for reforms to pay off typically at least a couple of years this is partly because the benefits materialize through firm entry and increased hiring both of which are gradual processes while any reform driven layoffs are immediate some reforms such as reductions in employment protection increase unemployment temporarily implementing a broad package of labor and product market reforms minimizes transition costs importantly reforms do not have noticeable deflationary effects suggesting that the inability of monetary policy to deliver large interest rate cuts in their aftermath either because of the zero bound on policy rates or because of the membership in a monetary union may not be a relevant obstacle to reform alternative simple monetary policy rules do not have a large effect on transition costs

measuring european financial integration in this paper we present a set of specific measures to quantify the state and evolution of financial integration in the euro area five key markets are considered namely the money corporate bond government bond credit and equity markets building upon the law of one price we have developed two types of indicators that can be broadly categorized as price based and news based measures we have complemented these measures by a number of quantity based indicators mainly related to the evolution of the home bias results indicate that the unsecured money market is fully integrated while integration is reasonably high in the government and corporate bond markets as well as in the equity markets the credit market is among the least integrated especially in the short term segment

the evolution and convergence of the government expenditure composition in the oecd countries in the light of models of composition ofgovernment expenditure and economic growthand the growing globalization process weinfer that countries should tend to asimilar structure of government spendingover time in fact using tukey box plotsand convergence we show evidenceof an approaching process in thecomposition of government expenditures inoecd countries for the period 1970 1997 wealso identify by means of cluster analysisthat most countries are converging towardstwo different models one including twelveeuropean and non european countries and theother composed solely of eight countries ofthe european union

partisan politics and public finance changes in public spending in the industrialized democracies 1955 1989 this paper evaluates the role that partisan politics plays in altering public spending levels the analysis covers over three decades of data on the developments of the public sectors in 16 oecd countries the results of the analysis lend firm support to the partisan politics model of special note is the distinction between the electorate and the government ideological preferences and the dominant role that the former plays the results also suggest contrary to conventional wisdom that partisan political influences have not been eliminated with the tightening of linkages to the international economy

the political economy of deficit spending in nine industrialized parliamentary democracies the role of fiscal institutions this article analyzes the influence of four sets of factors on deficit spending in 9 industrialized parliamentary democracies during 1958 1990 this article analyzes the influence of these factors and introduces and tests the importance of an additional potential influence on the size of a country s fiscal deficit the strength of fiscal bureaucracy it is argued that the stronger a country s fiscal bureaucracy the lower its deficit ceteris paribus empirically the authors find that the state of a nation s economy heavily affects its deficit little systematic relationship is found between the ideology of the ruling political party and a nation s deficit or between the political strength of the ruling party and deficits in contrast to the findings of roubini and sachs finally it is found that the strength of a country s fiscal bureaucracy is an important influence on the deficit in these 9 industrialized parliamentary democracies

product market reforms labour market institutions and unemployment we analyze the impact of product market competition on unemployment and wages and how this depends on labour market institutions we use differential changes in regulations across oecd countries over the 1980s and 1990s to identify the effects of competition we find that increased product market competition reduces unemployment and that it does so more in countries with labour market institutions that increase worker bargaining power the theoretical intuition is that both firms with market power and unions with bargaining power are constrained in their behaviour by the elasticity of demand in the product market we also find that the effect of increased competition on real wages is beneficial to workers but less so when they have high bargaining power intuitively real wages increase through a drop in the general price level but workers with bargaining power lose out somewhat from a reduction in the rents that they had previously captured

tackling the european migration problem this paper will begin by examining the historical pattern of migration and the empirical dimension of western europes migration problem a next step examines the labor market issues and impacts on natives as western europe perceives them the paper concludes with a discussion of policy issues and options excerpt

freight transportation costs and the thickening of the us mexico border border regulatory requirements and administrative practices changed subsequent to the september 11 2001 9 11 terrorist attacks in the united states research in this study examines the manners in which transportation cost data for merchandise imports from mexico behaved before and after 2001 evidence is obtained that confirms results earlier tabulated for imports from canada empirical results further indicate that beyond freight cost changes growth in the value of imports from mexico was disrupted by events associated with the aftermath of 9 11

political responses to interdependence what s left for the left heightened economic interdependence in recent years is commonly argued to have generated great pressures for convergence in economic policies across the advanced industrial democracies interdependence has clearly had a great impact on the types of economic policies that governments can pursue they have been unable to pursue independent fiscal and monetary policies since the mid 1970s furthermore all governments have been forced to attempt to promote the competitiveness of national goods and services in world markets and to increase the speed and efficiency with which national producers adjust to changes in global markets there are however different policies consistent with these goals statistical analyses of economic policies since the mid 1970s show that governments of the left and the right continue to be able to enact distinctive supply side policies that promote competitiveness and flexible adjustment and simultaneously further their partisan objectives

unions employers associations and wage setting institutions in northern and central europe 1950 1992 the eight countries examined in this study austria belgium denmark finland germany the netherlands norway and sweden have long been viewed as exemplifying corporatist industrial relations

the origins of financial openness a study of current and capital account liberalization theory we assess the determinants of the national regulation of international finance or the comparative degree of national financial openness or closure hypotheses partisanship interacts with a nation s factor endowments to account in part for different international financial policies by governments of the same partisan hue methods we offer a quantitative measure of international financial openness or current and capital account regulation for 21 member countries of the organization for economic cooperation and development for 1950 88 we use regression analysis employing panel corrected standard errors to discover the determinants of financial openness results our main finding is that political partisanship substantially explains openness but does so in complex ways differences in both political institutional arrangements and types of political economy also account for part of the differences in international financial regulation