short run exchange rate uncertainty in latin america this paper to obtain an ex ante measure of exchange rate uncertainty in 11 latin american countries as a preliminary issue the purchasing power parity ppp condition is tested using engle and granger two step procedure and johansen method the argument is that exchange rate uncertainty could be lower if ppp holds in the long run the expected exchange rate uncertainty is estimated according to an extended version of the autoregressive conditionally heteroscedastic arch model the results show that the arch adjusment produces more efficient estimates in seven countries and that the acceptance of ppp has little effect on exchange rate uncertainty

the north south divide questions of existence and stability this paper investigates the relationship between regional earnings and unemployment by use of information primarily from the general household surveys of 1975 and 1982 conventional earnings functions are augmented to capture the effects of the level and duration of unemployment and of regional differences in living costs in common with previous studies the authors find personal characteristics and the occupation or industry of employment to be important in earnings determination in this paper however they generally find that although higher unemployment is associated with reduced regional earnings ceteris paribus long term unemployment has little influence in regional earnings determination copyright 1990 by royal economic society

spatial patterns of private sector and public sector non agricultural jobs in rural northeast thailand lohmann c and liefner i spatial patterns of private sector and public sector non agricultural jobs in rural northeast thailand regional studies published evidence from developing countries shows that in rural areas participation in non agricultural wage employment rises with proximity to urban centres while earnings do not this paper explores the reasons for this phenomenon analysing the job characteristics of rural workers in detail the data set consists of 900 jobs the results show that public jobs are over represented in rural remote regions driving up the mean wage of this type of region when considering private sector employment only spatial wage and income differentials do exist showing that workers in remote areas are economically more disadvantaged than workers in peri urban areas

national price levels purchasing power parity and cointegration a test of four high inflation economies abstract the time series properties of exchange rates and wholesale prices from four high inflation countries show some evidence in support of purchasing power parity tests for stationarity of real exchange rates and cointegration among price and exchange rate variables are presented for argentina brazil chile and israel during the 1970s and 1980s error correction models describe the mechanism of adjustment to long run equilibrium

information technology effects on firm performance as measured by tobin s q despite increasing anecdotal evidence that information technology it assets contribute to firm performance and future growth potential of firms the empirical results relating it investments to firm performance measures have been equivocal however the bulk of the studies have relied exclusively on accounting based measures of firm performance which largely tend to ignore it s contribution to performance dimensions such as strategic flexibility and intangible value in this paper we use tobin s q a financial market based measure of firm performance and examine the association between it investments and firm q values after controlling for a variety of industry factors and firm specific variables the results based on data from 1988 1993 indicate that in all of the five years the inclusion of the it expenditure variable in the model increased the variance explained in q significantly the results also showed that for all five years it investments had a significantly positive association with tobin s q value our results are consistent with the notion that it contributes to a firm s future performance potential which a forward looking measure such as the q is better able to capture

are national agreements a source of nominal wage rigidity in the depressed regions of britain elliott r f and hemmings p j 1991 are national agreements a source of nominal wage rigidity in the depressed regions of britain reg studies 25 63 69 this study uses unpublished new earnings survey data to evaluate the relative rigidity of national wage rates a simple model is constructed to test the extent to which rates of pay set by management in firms not covered by any form of collective bargaining respond more quickly to changes in levels of excess demand than do rates established by national bargaining elliott r f et hemmings p j 1991 les conventions nationales sont elles une source de rigidite des salaires nominaux aux regions en perte de vitesse en grande bretagne reg studies 25 63 69 a partir des donnees provenant d une enquete sur les salaires actuels new earnings survey qui n ont pas ete publiees cette etude evalue la rigidite relative des taux nationaux des salaires on construit un modele simple pour jauger dans quelle mesure les taux des salaires decides par la

asset stock accumulation and sustainability of competitive advantage given incomplete factor markets appropriate time paths of flow variables must be chosen to build required stocks of assets that is critical resources are accumulated rather than acquired in strategic factor markets barney barney j 1986 strategic factor markets expectations luck and business strategy management sci october 1231 1241 sustainability of a firm s asset position hinges on how easily assets can be substituted or imitated imitability is linked to the characteristics of the asset accumulation process time compression diseconomies asset mass efficiencies inter connectedness asset erosion and causal ambiguity

regional pay the public private sector pay differential abstractregional pay the public private sector pay differential regional studies this paper extends the debate on making public sector wages more responsive to those in the private sector the way in which the public private sector wage differential is calculated dramatically alters conclusions and far from there being substantial regional disparity in wages offered to public sector workers any differences are predominantly concentrated in london and the south east where public sector workers are significantly disadvantaged relative to private sector workers this has implications for staff recruitment and retention such findings question the need for regional market facing pay but highlight the necessity to revisit the london weighting offered to public sector workers

wage differentials between the public and private sectors abstract public sector employment and the tax pressure has grown very rapidly in denmark in recent years this paper discusses a new policy option for government using its role as a dominant employer to reduce relative public sector wages the paper contains an empirical analysis of wage differences between the public and the private sectors in denmark using a longitudinal data set covering the years 1976 1985 fixed effect regressions show that a wage twist policy of this type has been used in these years one of the consequences of a wage twist policy in the public sector is recruitment and retention problems for public employees

exchange rate volatility and u s monetary policy an arch application this paper examines the effect of shifts in u s monetary policy regimes on the stochastic process that generates foreign exchange rates to account for the observed behavior of the data record the author models nominal dollar exchange rates as univariate autoregressive conditional heteroskedastic processes he then tests the stability of this process across u s monetary policy regimes for four of the currencies in the sample accounting for regime shifts improves the fit of the model regime shifts also appear to diminish the degree of persistence of variance making it less likely that exchange rates are integrated in variance copyright 1989 by ohio state university press

knight on risk and uncertainty it is argued that the received interpretation of knight s classic riskuncertainty distinction as concerning whether or not agents have subjective probabilities constitutes a misreading of knight on the contrary knight shared the modern view that agents can be assumed always to act as if they have subjective probabilities we document our contention that by uncertainty knight instead meant situations in which insurance markets collapse because of moral hazard or adverse selection knight s discussion of market failure although always informal and in places inaccurate was in many respects a remarkable anticipation of the modern literature

classical unemployment accommodation policies and the adjustment of real wages a model of wage formation and stabilization policy in economies with strong trade unions is developed the analysis provides a theoretical underpinning for the assertion that accommodation policies may cause wage inflation and ultimately reduce employment various methods of accomplishing a real wage adjustment are discussed i a policy of complete nonaccommodation 2 continued accommodation policies but with lower employment targets 3 social contracts and 4 tax based incomes policies tip

public service employment and the public private wage differential in british regions successive forms of regional policy in the uk have sought to support the maintenance and creation of public sector employment opportunities in relatively disadvantaged regions nationally negotiated public sector pay rates mean that the private public pay gap is likely to be wider in lower demand regions this will be reinforced by the relative absence of private sector employment crowding out in such higher unemployment regions this paper investigates the association between private and public sector service employment using panel data for british regions and estimates regional public private wage differentials using british household panel survey data for 1991 to 1996 across britain private sector employment growth is weakly positively associated with higher public service employment growth but the association is stronger in scotland and the north of england the pattern of regional wage differentials found is consistent with lower crowding out in higher unemployment regions this suggests that reg

explaining organizational diseconomies of scale in r d agency problems and the allocation of engineering talent ideas and effort by firm size the comparative efficiency and success of small firms in r d remains largely unexplained this paper empirically examines scale diseconomies in offering employment contracts as an explanation for diseconomies of scale in r d the paper argues that small firms more efficiently resolve the severe agency problems of hidden information and hidden behavior in r d small firms more efficiently offer contracts that reward performance than large firms and consequently small firms attract and retain engineers with higher ability and skill further small firms through these more performance contingent contracts induce higher levels of effort than large firms the study tests and generally confirms these hypotheses using data collected from 912 current and former engineering employees of two large high technology companies

long term unemployment hysteresis and the unemployment vacancy relationship a regional analysis jones d r and manning d n 1992 long term unemployment hysteresis and the unemployment vacancy relationship a regional analysis reg studies 26 17 29 in this paper we investigate the unemployment vacancy uv relationship in the ten standard regions of great britain in particular we test the hypothesis of hysteresis in the unemployment rate and consider the importance of long term unemployment in the hysteresis mechanism previous work has demonstrated the importance of long term unemployment in empirical models of the aggregate uv relationship in the regions of britain there is considerable heterogeneity both in the measured uv relationship and in the relative importance of long term unemployment the nature of this heterogeneity is considered in this paper jones d r et manning d n 1992 le chomage de longue duree l hysterese et le rapport chomage offres d emploi une analyse regionale reg studies 26 17 29 cet article etudie le rapport chomage offres d emploi c o dans les dix zo

the effects of real exchange rate risk on international trade abstract by assuming real profit maximization and uncertain prices as well as exchange rates we conclude that it is uncertain percentage changes in the real exchange rate that are risky in international trade empirical estimation of fourteen bilateral trade flows among industrialized countries finds a significant negative effect on trade quantity from such risk in a number of these cases the expectation variable has a positive effect in a larger number of cases significant price effects from the expectation variable are fewer and from risk are negligible

public sector pay bargaining and regional labour markets regional pay differentials for women working as nurses within the uk national health service spoor c and sutherland j 2007 public sector pay bargaining and regional labour markets regional pay differentials for women working as nurses within the uk national health service regional studies 41 115 129 the policy context of this paper is the controversy over pay bargaining processes and the advantages claimed for decentralized pay bargaining as opposed to centralized bargaining for nurses the single most important occupational grouping within the uk national health service and conventionally associated with a problem of labour shortages making use of a pooled cross section data set from eight successive sweeps of the labour force survey which consists of women who possess a nursing qualification this paper examines regional wage differentials from two perspectives first regional wage differentials accruing to women employed as nurses within the national health service are examined these differentials are seen to be sizeable evidence compatible with an existing degree of localization

measuring and analysing the effects of short term volatility in real exchange rates this paper examines short term volatility in the real effective exchange rates of industrial countries and its impact on their imports it yields three conclusions first volatility has not diminished as markets have gained experience with floating exchange rates the trend appears to be in the opposite direction for some countries second exposure to short term volatility has differed among countries japan and sweden have experienced much more than most other industrial countries third volatility appears to depress the volume of international trade this third finding is consistent with results reported by cushman and by akhtar and hilton and challenges earlier findings by hooper and kohlhagen

the econometric analysis of models with risk terms summary in this paper we have attempted to provide an integrated approach to the estimation of models with risk terms it was argued that there exist orthogonality conditions between variables in the information set and higher order moments of the unanticipated variable density these could be exploited to provide consistent estimators of the parameters associated with the risk term specifically it was recommended that an iv estimator should be applied with instruments constructed from the information set four existing methods commonly used to estimate models with risk terms are examined and applications of the techniques are made to the estimation of the risk term in the us c exchange market and the effects of price uncertainty upon production

short run fluctuations in foreign exchange rates evidence from the data 1973 1979 abstract the paper examines the statistical properties of daily changes in foreign exchange fx rates for nine currencies it finds that these changes are leptokurtotic i e have long tailed and sharp peaked histograms the evidence suggests that this leptokurtosis does not arise from an underlying paretian stable distribution nor from a stationary mixture of normal distributions but rather from normal processes with time varying parameters this finding casts doubt on the validity of many standard techniques t stats arima methods some moving statistics for estimating the time varying parameters are also presented

path modelling to bankruptcy causes and symptoms of the banking crisis this article studies the bankruptcy of us banks since 2009 it first analyses the financial symptoms that precede bankruptcy such as low profitability insufficient revenue or low solvency ratios it also goes into the causes of these symptoms it poses several hypotheses on causes of failure such as loan growth some of them risky specialization in this case concentration in real estate and the pursuit of a turnover driven strategy neglecting margin it presents and tests a structural equation modelling based on partial least squares path modelling pls pm and logistic regression results show that 5 years before the crisis failed banks had compared to solvent banks the following higher loan growth higher concentration on real estate loans higher risk ratios higher turnover but lower margins a relationship is found between symptoms and causes failed banks present a significant relationship between the percentage of real estate loans and risk this relationship is negative in excellent b

diminishing marginal returns from r d investment evidence from manufacturing firms this study analyses the association between r d investment rdi and growth opportunities and show that there exists diminishing marginal returns in manufacturing firms extant literature has found that besides r d investment systematic risk financial leverage and complementary asset investment are also associated with growth opportunities accordingly we employ structural equation modelling to simultaneously estimate both a direct influence of rdi as well as indirect influences of rdi on growth opportunities via these three mediating effects we find that the direct effect of incremental rdi on growth opportunities is independent of r d intensity instead the heterogeneous effects of rdi on systematic risk financial leverage and complementary asset investment across firms with different r d intensity level accounts for the diminishing marginal returns to r d investment we specifically observe that the greatest indirect effect is via the financial leverage of the firm this study shows the importanc

public and private sector wages in the netherlands there is much debate in the netherlands about underpayment of public sector workers relative to private sector workers in this paper we analyze the wage structures in both sectors using an endogenous switching regression model unlike previous dutch studies we find that the earnings prospects of public sector workers are better in the public sector than in the private sector for private sector workers we find the exact opposite their earnings prospects are better in the private sector moreover the allocation over sectors points to comparative advantages

an empirical analysis of strategic competition and firm values the case of r d competition abstract we operationalize a firm s competitive strategy through a new empirical measure and develop a framework for empirical analysis of the market value of strategic behavior using this framework we study announcement effects of r d spending the announcing firm s stock prices are positively influenced by a change in spending and negatively by our competitive strategy measure csm competitors stock prices are positively influenced by the interaction between the market s reaction to the announcing firm and the csm our results are consistent with positive effects of accommodating competition with strategic substitutes and nonpositive effects of tough competition with strategic complements

what is a public sector pension worth we measure accruals in defined benefit db pension plans for public and private sector workers in britain using typical differences in scheme rules and sector specific lifetime age wage profiles by sex and educational group we show not just that coverage by db pension plans is greater in the public sector but that median pension accruals as a percentage of salary are more than 6 higher among db covered public sector workers than covered private sector workers this is largely driven by earlier normal pension retirement ages but also by differences in earnings profiles across the sectors

size leverage concentration and r d investment in generating growth opportunities we show that a firm s ability to reap growth opportunities from r d investments depends on its size leverage and the industry concentration while the direct effects of these factors are significant the size leverage interaction reveals further important insights large firms advantages over small firms disappear as their leverage increases specifically small firms with high leverage reap the greatest growth opportunities our results provide explanations for inconsistent findings observed when size and leverage are considered independently in existing studies on value and stock return relevance of r d investment we also highlight firm specific factors that guide investors valuation of r d

estimates of the variance of u s inflation based upon the arch model it is generally agreed that the unpredictability of future inflation is a major component of the welfare loss associated with inflation perfectly predicted inflation might induce some costs through institutional rigidities governmental interference and transaction costs but in the long run these should be rather minimal as these institutions adopt various forms of indexing when inflation is unpredictable risk averse economic agents will incur a loss even if prices and quantities are perfectly flexible in all markets inflation is a measure of the relative price of goods today and goods tomorrow thus uncertainty in tomorrow s price impairs the efficiency of today s allocation decisions friedman in his nobel lecture 8 argues convincingly that higher variability of inflation would lead to decreased output ceteris paribus he then conjectures that higher rates of inflation are generally associated with higher variability of inflation and presumably greater uncertainty about future rates if this is true then higher rates of inflation would also be associated with low levels of output which implies a positively sloped phillips curve this paper uses a new statistical technique arch to estimate the conditional mean and variance of inflation from u s time series data the main finding is that the variance of inflation in the seventies was only slightly greater than in the sixties

exchange rate variability and trade why is it so difficult to find any empirical relationship this paper discusses why previous literature has found little evidence of any effect of exchange rate variability on international trade methodological and statistical issues are discussed in particular comparisons are made of estimations based on different specifications or using different data sets and changes in the results depending on the method used are shown

devolved government and public sector pay reform considerations of equity and efficiency elliott r f bell d scott a ma a and roberts e 2005 devolved government and public sector pay reform considerations of equity and efficiency regional studies 39 519 539 public sector pay is of critical concern to the governments in westminster and edinburgh it accounts for the major part of these government s current expenditures and is a crucial determinant of the quality and range of the services they provide the paper details the current arrangements for setting public sector pay it is shown that these mechanisms are for the most part uk wide and that they result in national rates of pay that reveal little sensitivity to specific labour market conditions in scotland in consequence in scotland public sector workers toward the lower end of the distribution of pay are now significantly better paid than their private sector counterparts while those at the upper end are now paid about the same the paper uses data from the labour force survey for 1996 2002 to establish these results