employer search and employment subsidies in this paper insights into the literature on employment subsidy evaluation and that on employer search are merged to explore uncharted territory the firm and job characteristics leading to deadweight loss in employment subsidy schemes a model is developed which integrates various arguments found in the existing employer search literature using a survey of dutch firms for 1999 the model predictions are confirmed the richness of the data set enables one to construct some measures of deadweight loss which are new to the existing literature it turns out that firms which experience low screening costs large firms firms that forego substantial production due to unfilled jobs vacancies for full time jobs and firms operating in slack labour market conditions cause significantly more deadweight loss

nonfarm employment and poverty in rural el salvador abstract this paper analyzes two complementary data sets to study poverty and the nonfarm sector in rural el salvador we find that rural poverty in el salvador remains acute and significantly higher than in urban areas while the rural poor are mainly agricultural laborers and marginal farmers some nonfarm activities are also of importance to the poor in fact nonfarm activities in el salvador account for a significant share of rural employment and income for both the poor and the nonpoor the poor on the one hand are engaged in last resort nonfarm activities that are not associated with high levels of labor productivity the nonpoor on the other are engaged in productive nonfarm activities which are likely to present a potent force for upward mobility significant correlates of these high productivity occupations include education infrastructure location and gender while most of the analysis is at the household level the data also permit some focus on small scale rural enterprise activities it appears that in el salvador very few rural enterprises report utilizing formal credit in setting up their activities in addition a significant proportion of enterprises are engaged in subcontracting arrangements with some larger often urban based firm

approximate surrogate production functions the cambridge debate showed that an aggregation of capital is not possible in general a recent investigation has found one example for reswitching and several for reverse capital deepening but the paradoxes appear to be infrequent the paper provides a theoretical justification of this result and shows how wage curves of input output matrices with small non dominant eigenvalues become quasi linear with some numeraires large random systems lead to the genesis of such states approximate surrogate production functions then seem possible a family of economic systems with constant capital composition allows construction of a surrogate production function copyright oxford university press

education and economic declin 1890 1980s over the last hundred years or so there has been a persistent belief that the relative decline of the british economy has been underlain by defects in our education the argument that i wish to put forward here is that whatever the defects of technical and scientific education in the 1870s and 1880s the situation radically improved in the 1890s and 1900s and it is fallacious to regard the whole period 18701914asoneinwhichdefectsofprovisionhinderedindustrialperformance the more lasting problem was not so much the provision of technical education as the willingness of employers to receive its products this was compounded by the liberal education values entrenched in the education of the upper classes at the public schools and oxford the focussing by historians on the defects of the pre 1914 period has also diverted attention from perhaps the most serious issue of all namely the failure in the twentieth century to develop a technical education for teenagers of school age

an empirical investigation of paradoxes reswitching and reverse capital deepening in capital theory this paper examines the empirical relevance of the capital controversy the price model of sraffa and the dual models of the price and quantity systems of von neumann become the basis of the investigation in the course of the controversy it proved easy to construct theoretical examples which contradicted the fundamental neoclassical hypothesis of an inverse capital demand function this paper presents empirical examples for the first time thiry two input output tables from the oecd database serve as data as a result one envelope is found which involves reswitching reverse substitution of labour or reverse capital deepening are observed in about 3 65 of tested cases they involve at least two switchpoints copyright 2006 oxford university press

productivity and long term growth potential in the uk economy 1924 1968 this paper examines the long term structural determinants of labour productivity for the uk economy using a panel data set from 1924 to 1968 trade union product market competition and human capital explanations are embedded within the model and compared labour quality or human capital is found to be the most important of the explanations considered

cliometrics 1971 1986 a survey the paper selectively surveys recent quantitative work in economic history with special emphasis on research into unemployment in interwar britain the habakkuk controversy the kuznets curve the demographic transition and heights in history it is shown that the field has advanced well beyond the routine applications of elementary microeconomics which characterized its early days considerably greater quantitative sophistication and a much wider coverage of historical issues have been notable features of this advance it is argued that econometric methods need to be supplemented in historical work by other forms of evidence to obtain persuasive answers to historical questions

the assessment productivity and competitiveness in british manufacturing this issue of the oxford review examines productivity and competitiveness in british manufac turing the simplest and most widely used measure of productivity is output per head from this definition sprout at once the horns of a dilemma for an economy facing unemployment on the present scale for a given rate of expansion of output the higher the rate of productivity growth the greater the decline in employment or at least the smaller its growth on the other hand in an economy open to international competition a high rate of productivity growth relative to that of other countries is the long term key to achieving the favourable international competitive po sition necessary to sustain growth and a low level of unemployment

a nonlinear principal component analysis of the relationship between budget rules and fiscal performance in the european union tests of the relationship between budget rules and fiscal performance are metric sensitive and arbitrary in the evaluation of the stringency of the rules in the aggregation of these evaluations in an index and in the imposition of a linearly specified model we propose a nonlinear principal component analysis to solve these problems and evaluate the relative disciplinary power of each rule a battery of panel regressions on 1980 2003 optimally transformed data relative to 12 eu countries confirms that upon controlling for standard economic political and institutional variables more stringent rules reduce fiscal imbalances and budget size

lessons from the 1930s great depression this paper provides a survey of the great depression comprising both a narrative account and a detailed review of the empirical evidence focusing especially on the experience of the united states we examine the reasons for and flawed resolution of the american banking crisis as well as the conduct of fiscal and monetary policy we also consider the pivotal role of the gold standard in the international transmission of the slump and leaving gold as a route to recovery policy lessons for today from the great depression are discussed as are some implications for macroeconomics

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

on constructing numeraire free measures of price value deviation a note on the steedman tomkins distance this paper argues that there exists an infinite number of numeraire free measures a la steedman tomkins of price value deviation on the empirical side it provides an illustration of those measures using input output data from the swedish economy copyright the author 2010 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

still searching for an explanation of unemployment in interwar britain no man has hired us with pocketed hands and lowered faces we stand about in open places and shiver in unlit rooms only the wind moves over empty fields untilled where the plough rests at an angle to the furrow in this land there shall be one cigarette to two men to two women one half pint of bitter ale in this land no man has hired us our life is unwelcome our death unmentioned in the times t s eliot the rock 1934

economic growth and balance of payments constraint in brazil an analysis of the 1995 2013 period abstract the purpose of this work is to analyze the balance of payments constrained growth in brazil considering thirwall s law 1979 to this end we estimate export and import demand functions using two econometric models vector error correction and structural state space model for the period of 1995 2013 our results suggest that the balance of payments is a constraint to the brazilian economic growth given i the ratio between exports and imports income elasticities ii the low sensitivity of exports to changes in the real exchange rate and iii the evidence that exports are more sensitive to alterations in commodities prices than to changes in the real exchange rate

thirlwall s law and balance of payments constrained growth more on the debate the various criticisms that have levelled against thirlwall s law by mcgregor and swales are examined it is shown that their arguments are untenable the relationship between the necolassical law of one price and thirlwall s law is clarified thirlwall s law is not overwhelmingly rejected by the evidence as mcgregor and swales assert their suppression of the influence of the price term on the estimates used in the test proposed by mccombie is inappropriate their regression analyis is also mid specified and a preferable specification provides no support for their conclusions they repeatedly argue that thirlwall s modele cannot account for changes in market shares and the that the estimated income elasticities of demand for exports and imports cannot capture the effects of non price competition this was shown to be erroneous by mccombie and the reasons advanced are further elaborated mcgregor and swales provide another interpretation of the relationship between thirlwll s law and the harrod foreign tr

the assessment british economic cgowth over the long run it is now conventional wisdom that for some hundred years or so british growth and especially productivity performance have been deeply disappointing when compared with that of other advanced countries more contentious but nevertheless widely held is the belief that the failures of the post war economy are deeply rooted in the past presenting successive governments both with an unenviable legacy and a most daunting task in their aspiration to remedy britain s relative economic decline thus eatwell 1982 claims that the weakness of the british economy is the cumulative product of the entire history of britain since the end of the nineteenth century when it first became evident that b ritain was unable or unwilling to adapt to a competitive world in which her pre eminence could no longer be taken for granted certainly complaints about the poor quality of industrial management trade union obstacles to productivity advance the inappropriate and inadequate education system in the uk and slowness to develop and apply advanced technology were commonplace at the turn of the century as they have been in recent decades furthermore the twentieth century has seen a constant and often painful need to restructure economic activity in the face of a declining share of world trade and changing comparative advantage whilst in terms of olson s thesis 1982 suffering the sclerotic effect of special interest groups undisrupted by war foreign occupation or totalitarian government

redefining business success distinguishing between closure and failure new firms are believed to have high closure rates and these closures are believed to be failures but two u s census bureau data sources illustrate that these assumptions may not be justified the business information tracking series bits showed that about half of new employer firms survive beyond four years and the characteristics of business owners cbo showed that about a third of closed businesses were successful at closure the cbo also made it possible to compare results of models of business survival and business success but because of non response bias logit models were used similar to previous studies firms having more resources that were larger with better financing and having employees were found to have better chances of survival factors that were characteristic of closure such as having no start up capital and having a relatively young owner were also common in businesses considered successful at closure hence few defining factors can be isolated leading to true failures the significant proportion of businesses that closed while successful calls into question the use of business closure as a meaningful measure of business outcome it appears that many owners may have executed a planned exit strategy closed a business without excess debt sold a viable business or retired from the work force it is also worth noting that such inborn factors as race and gender played negligible roles in determining survivability and success at closure

a note on america s 1920 21 depression as an argument for austerity this note argues that recent interest in the 1920 21 depression in the usa as a historical precedent for austerity is inappropriate most of the austerity measures preceded the depression which had already begun receding by the time warren harding implemented the relatively modest spending and tax cuts that are cited by modern proponents of austerity the evidence suggests that the 1920 21 depression was the result of a variety of supply constraints rather than a deficiency of effective demand and is therefore a poor test of the efficacy of keynesian fiscal policy

the climacteric in late victorian britain and france a reappraisal of the evidence the paper investigates the question of whether the trend rate of growth of gdp slowed down in britain or france in the nineteenth century we establish that real gdp belongs to the trend stationary process class of time series in each case rather than the difference stationary process and using kalman filter techniques analyse trends in a model incorporating time varying parameters without specifying breakpoints in advance we find contrary to the literature that neither country experienced a climacteric our results suggest that economic historians have been prone to exaggerated views of variations in trend economic growth

values prices of production and market prices some more evidence from the greek economy this paper extends the empirical investigation of the relation between labour values and different price forms in the case of the greek economy subjecting the labour theory of value to empirical tests with data from various countries helps in the derivation of general conclusions regarding its empirical validity and practical usefulness our results on the closeness of values and prices as measured by their absolute deviation and correlation the shape of the wage profit curves the predictive power of labour values over market prices compared with other value bases and the comparison of fundamental marxian categories when estimated in value and price terms provide further support for the empirical strength of the labour theory of value

sraffa leontief lange the political economy of input output economics abstract the fields of political economy and input output economics are commonly unrelated due to the discrepancy between the qualitative and quantitative analysis in economic science with the aim to overcome this separation this paper relates the basic model of production of commodities by means of commodities to the paradigm of planning as the substitute for the market by sketching the logical historical development of input output economics the model of sraffa the leontief matrices and the political economy of marxist tradition represented by oskar lange are strongly associated so that the typical qualitative concepts of planning law of value and historical development of the capitalist system can be connected to the quantitative framework of matrix programming and mathematical formalization

on measuring the deviation of prices from values it has often been found useful to measure in some way the extent to which with profit prices diverge from zero profit values but it is not satisfactory to employ a measure which varies with the choice of numeraire for this element of arbitrariness has nothing to do with the central idea of asking how much the direction of the price vector differs from that of the value vector the authors develop a measure which involves no numeraire and then illustrate its use with data from the united kingdom the irish republic and australia copyright 1998 by oxford university press

comparative advantage in uk manufacturing trade 1910 1935 this paper uses a maintained hypothesis of comparative advantage based on relative factor endowments to investigate uk manufacturing trade prior to world war ii the results from several independent tests indicate that britain exported goods intensive in the use of unskilled labour and had a comparative disadvantage in goods intensive in the use of human capital right up to the mid 1930s this is consistent with the views of contemporaries but somewhat at odds with recent optimistic assessments of structural change in pre war britain this abstract was borrowed from another version of this item

wage formation and bargaining power during the great depression we present an econometric analysis of wage behaviour in norway during the interwar years the analysis is based on a panel of manufacturing industry data using gmm estimation methods our empirical analysis shows that wage formation in the interwar period can be understood with the help of modern bargaining theory and well established wage equations we estimate a long run wage curve that has all the standard features of being homogeneous in prices proportional to productivity and with a negative unemployment elasticity we also present some new monte carlo evidence on the properties of the estimators used

can productivity growth explain the nairu long run evidence from britain 1871 1999 this paper investigates the effect of productivity growth on the non accelerating inflation rate of unemployment nairu over the long run using historically consistent time series for the uk from 1871 to 1999 a two equation model of unemployment and wage setting that incorporates productivity effects is estimated over the whole period allowing for shifts associated with changes in labour market institutions the results indicate that faster productivity growth reduces the nairu but that this goes only part of the way towards explaining wide swings in average unemployment across the decades

long term unemployment and the wage equation in britain 1925 1939 this paper shows that addition of a long term unemployment variable substantially improves estimates of the wage equation in interwar britain long term unemployment did not have a damping effect on wage growth whereas short term unemployment did reduce wage inflation the results imply that during the 1930s the nonaccelerating inflation rate of unemployment rose as the composition of the stock of unemployed altered both insider outsider arguments and employer perceptions of low productivity characteristics among the long term unemployed are likely explanations for the results in the paper copyright 1989 by the london school of economics and political science

aggregate supply in interwar britain traditionally economists after keynes have attributed the high unemployment of interwar britain to fluctuations in aggregate demand however recently more emphasis has been placed on supply factors economic historians such as aldcroft i970 and richardson i967 have pointed to the problems of structural adjustment from the old staples to the new industries while economists in the classical tradition have emphasised labour market rigidities in particular benjamin and kochin i979 point to the existence of unemployment benefits which are held to have reduced the effective supply of labour while beenstock et al i984 emphasise the role of real wage determination a change in the wage determination process during the i 930s is seen as allowing a reduction in real wage growth which thus raised the productive potential of the economy by allowing the profitable employment of less productive workers in this paper we examine the relative importance of supply and demand factors drawing the following conclusions first supply factors were only important during the early 1920s secondly the supply shock of the early i920s was due to a fall in hours worked rather than any change in unemployment benefits or structural problem thirdly the recovery of the 1930s was due to demand factors and not due to any unusual behaviour of wages

determinants and effects of new business creation using global entrepreneurship monitor data this paper is an introduction to the present special issue dedicated to scientific research using data collected as part of the global entrepreneurship monitor gem and considering new venture creation as the hallmark of entrepreneurship after a short description of gem s theoretical and methodological background this introduction highlights the main results of seven papers which were presented at the first gem research conference in berlin from 1 to 3 april 2004 first there is empirical evidence that the role of entrepreneurial activity differs across the stages of economic development in that there appears to be a u shaped relationship between the level of development and the rate of entrepreneurship consequently a positive effect of entrepreneurial activity on economic growth is found for highly developed countries but a negative effect for developing nations second it is shown that different types of entrepreneurship may have a different impact on a nation s innovativeness and economic growth rate in particular potentially high growth business start ups and so called opportunity entrepreneurship enhance knowledge spillovers and economic growth third entrepreneurship is again shown to be a regional event that can only be understood if regional framework conditions including networks and regional policies are taken into consideration

entrepreneurship and local economic resilience the impact of institutional hysteresis in peripheral places this article examines how the legacies of the past in peripheral post industrial places serve to shape current and future entrepreneurial activity and with it local economic resilience drawing on in depth qualitative interviews with key regional stakeholders the article reveals how peripheral post industrial places are constrained by their histories this is found to be manifest in different ways such as low aspirations generational unemployment and a loss of identity which are in turn compounded by negative perceptions of place and opportunity these issues culminate in institutional hysteresis at the local level and constrain entrepreneurial ambition the article argues that the rigidity and reproduction of informal institutions continues to stymie economic resilience and growth we conclude by reflecting on the implications for entrepreneurship in peripheral post industrial places as well as with recommendations for policy

new zealand s perfect storm of entrepreneurship and economic development applying a grounded theory approach to analyzing the global entrepreneurship monitor gem data we attempt to explain why new zealand exhibits only a moderate level of economic development despite its high level of entrepreneurship by statistically analyzing why 34 other countries in the 2005 gem dataset exhibit small deviations from the classical quadratic curvilinear relationship between entrepreneurship and economic development we develop a better understanding of the entrepreneurial framework conditions underlying new zealand s large deviation from this trend line based on our findings from the gem data we make policy recommendations that could aid in moving new zealand and other countries closer toward the trend line and thus promote economic development

labour values prices of production and the missing equalisation tendency of profit rates evidence from the german economy during recent years several empirical studies have found that deviations from labour values to market prices are quite small however most of these articles do not offer a detailed reason for this result in this paper two theoretical justifications of the labour theory of value are brought together with some data concerning labour values prices of production and market prices on the basis of german input output tables from 2000 and 2004 in addition the statistical characteristics of profit rates are analysed both of the theoretical arguments are much in line with the empirical observations because there is only a slight transformation tendency and at the same time profit rates and capital intensity are negatively correlated moreover during the period under observation the german economy seems to be in a state of statistical equilibrium copyright oxford university press

quantitative empirical research in marxist political economy a selective review this paper surveys quantitative empirical research in some key areas of marxist political economy following an introductory section on the value controversy the paper surveys quantitative empirical research on the following topics a marxist national accounts b classical marxist theory of relative prices c probabilistic political economy d profitability analysis and e classical marxian theories of growth and technical change i end by highlighting two important puzzles in the extant literature

entrepreneurial opportunities in peripheral versus core regions in chile governmental policies tend to support and boost entrepreneurship in peripheral regions in many countries this research revives the debate about specific regional policies designed to foster local new business creation and the entrepreneurial framework conditions needed at the regional level for emerging regions such as latin america we applied one of the global entrepreneurship monitor s methodologies the national experts survey to a sample of 695 key informants in chile at eight regions of which six are classified as peripheral using non parametric statistics we compared the differences between peripheral and core regions the main results indicate that peripherally located entrepreneurship experts perceive their regions as in a worse position than centrally located experts in terms of finance access and physical infrastructure on the other hand the results indicate that peripheral entrepreneurship experts detect more market dynamism in their regions and surprisingly perceive general policy and government programs as supporting entrepreneurship although the chilean government had not promoted many regional policies

the location of markets perceived entrepreneurial risk and start up capital of micro rural firms it is argued that when founders of smes perceive the probability of a successful and lucrative venture to be greater they are more likely to provide a greater proportion of the start up capital this paper provides an empirical examination of two concurrent hypotheses firstly that the size of the debt or equity is affected by factors influencing perceived entrepreneurial risk secondly that the location of the market for the firm s output is a major factor reducing perceived entrepreneurial risk and increasing equity of the start up capital a statistical analysis based on the simultaneous tobit model is used results show that significant factors influencing risk perception include the size of the new business and the sector of economic activity as well as entrepreneurial experience and the location of the markets for the firm s output the results highlight implications for the design and implementation of rural development policies and especially for the instruments supporting rural business creation

long term supply side implications of the great depression we compare the experiences of the us and uk during and after the great depression with particular attention to overall productivity growth industrial organization the growth of human capital and protectionism we discover many implications of the great depression experience and policies for post war economic activities we conclude that one should never waste a good crisis in the implementation of one so wn economic policies labour market policies should encourage the formation of human capital and it is dangerous to assume that other countries will not change in an economic crisis