unionization and labor market institutions in advanced capitalism 1950 1985 this article examines the depedence of unionization on labor market institutions and long run trends in inflation unemployment and the sectoral composition of the labor force in 18 oecd countries the large number of contending explanations highlights the difficulty in comparative sociology of drawing confident conclusions when there are few cases to compare this problem is addressed through diverse evidence a review of the comparative historical record and a time series analysis to form a bayesian prior distribution which is combined with a cross sectional data set to sharpen conventional estimates of economic and institutional effects this analysis indicates working class organization in trade unions expanded in the postwar period where labor acquired an institutional influence over capitalist labor markets

lobbying by capital and labor over trade and labor market policies abstract this paper uses the common agency approach to analyze the joint determination of product and labor market distortions in a small open economy capital owners and union members lobby the government on both tariffs and minimum wages while other factors of production are not organized the paper shows that product and labor market distortions always move in the same direction and that their level is not modified by social pacts between capital and labor it also shows that labor market distortions are second best hence conditionality by foreign organizations should target distortions in product markets but not in labor markets

the supply and demand for exports in israel abstract using annual data for israel over the period 1960 1989 we estimate an econometric model for the supply and demand for exports a novel feature is that domestic absorption crowds out export supply exports are imperfect substitutes in world markets for tradeables produced abroad the price elasticity of demand is about 1 3 while the price elasticity of supply is about 1 5 the model is simulated to calculate the effects of policy instruments and other exogenous variables on exports and export prices

optimal integrated generation bidding and scheduling with risk management under a deregulated daily power market in the deregulated power industry a generation company genco sells energy and ancillary services primarily through bidding at a daily market developing effective strategies to optimize hourly bid curves for a hydrothermal power system to maximize profits becomes one of the most important tasks of a genco this paper presents a unified framework for optimizing energy and reserve bidding strategies under a deregulated market in view of high volatilities of market clearing prices mcp the hourly mcps and reserve prices are modeled as discrete random variables whose probability mass functions are predicted with a classification based neural network approach the mean variance method is applied to manage bidding risks where a risk penalty term related to mcp and reserve price variances is added to the objective function to avoid buying too much power from the market at high prices a genco may also require covering at least a certain percentage of its own customer load this self scheduling requirement is modeled similar to the system demand in traditional unit commitment problems the formulation is a stochastic mixed integer optimization with a separable structure an optimization based algorithm combining lagrangian relaxation and stochastic dynamic programming is presented to optimize bids for both energy and reserve markets numerical testing based on an 11 unit system in new england market shows that the method can significantly reduce profit variances and thus reduce bidding risks near optimal energy and reserve bid curves are obtained in 4 5 minutes on a 600 hz pentium iii pc efficient for daily use

the economics of worldwide stagflation the last fifteen years have witnessed dramatic changes in economics not only in the manner in which the economics profession views economics but also in the manner in which the general public views economics and economists by the late 1960 s there had emerged more or less a consensus macroeconomic framework that is an agreed upon structure to be used to study economic problems at the aggregate level robert solow stated as quoted in leijonhufvud 1968

the political economy of government domestic expenditure in the affluent democracies 1960 80 despite the large number of studies of the determination of government expenditure in the affluent democracies most students of the subject admit that we know relatively little about the complex dynamics of spending change using multiple regression analyses of changes in nonmilitary outlays over the years 1960 to 1973 and 1973 to 1980 this study attempts to remedy some of the problems in the literature by providing new tests of several old hypotheses by introducing and testing several relatively new hypotheses and by evaluating such propositions in the context of an integrated theoretical framework and of analyses that span two distinct political economic eras results suggest that the dynamics of domestic expenditure change are partially conditioned by macroeconomic and political environments of particular eras overall the self interests and ideological preferences of policymakers the institutional and extrainstitutional political action of policy relevant groups and needs for state assistance emerge as principal sources of changes in domestic expenditure

the anti inflationary influence of corporatist structures and central bank independence the importance of the hump shaped hypothesis many studies have found strong negative correlations between central bank independence and inflation but the casual significance of this relationship is often challenged we find that the negative relationship remains even when a number of other explanatory variables are considered special attention is given to the role of corporatism following calmfors and driffell it is argued that both high and low levels of centralization should be associated with lower inflation we present empirical support for his hump shaped hypothesis and find that the inclusion of corporatism does not diminish the significance of central bank independence

bidding strategies for electricity producers in a competitive electricity marketplace this paper presents a methodology for the development of bidding strategies for electricity producers in a competitive electricity marketplace initially the problem is modeled as a two level optimization problem where at the first level a market participant tries to maximize his expected profit under the constraint that at the second level an independent system operator dispatches power solving an optimal power flow problem that minimizes total system cost it is assumed that each supplier bids a linear supply function and chooses his bidding strategy based on probabilistic estimates of demand and rival behavior monte carlo simulation is used to calculate the expected profit and genetic algorithms are employed to find the optimal strategy subsequently the formulation is expanded to account for different market participants risk profiles it is shown that risk aversion may influence the optimal bidding strategy of an individual

an assessment of proposed energy resource tax reform in russia a static general equilibrium analysis abstract a large part of government revenues in russia comes from royalties and export taxes on crude oil oil products and gas recently the russian government has considered reducing export taxes on crude oil and oil products compensated by an increase in the royalty on crude oil the objective of the paper is to analyse the economy wide effects of this proposal moreover a hypothetical replacement of export taxes and royalties with a pure rent tax is analysed a static single country multi sector computable generation equilibrium cge model is employed the primary findings are as follows a replacement of export taxes on crude oil and oil products with a royalty on crude oil provides substantial allocative efficiency gains but this policy is not a superior one welfare could be substantially improved when the export taxes and royalty are replaced with a pure rent tax that can be implemented in the form of a cash flow tax on the negative side reducing export taxes on crude oil and oil products results in a strong appreciation of the currency as a result domestic producers become less competitive in domestic markets and there is a massive increase in import demand

what caused the rise of conservatism a french view conservatism daniel cohen existing theories of political cycles fail to provide an adequate explanation for the widespread shift to conservative economic policies on one view political parties merely court the median voter but this theory is incomplete because it fails to explain why the median voter has become conservative other theories differentiate parties by their ideologies but they wholly fail to explain where changes of ideology come from this author proposes an explanation that does not need to rely on changes in the underlying preferences of voters or parties but in which changing economic conditions lead to different policy choices thus while ends remain unchanged the means to achieve these ends may vary over time the distinction between right and left is still portrayed by the classical trade off between economic efficiency and equity in order to promote equity the government can always redistribute wealth but in order to preserve economic efficiency wealth redistribution should not be expected to be repeated systematically hence the median voter will prefer a laissez faire to an interventionist government when the economy is understood to be affected by a persistent disturbance and the converse when disturbances are temporary thus the shift to conservatism is seen as the result of the sometimes belated realization by the electorate that the shocks of the 1970s were long lasting current forecasts that unemployment in europe is unlikely to fall suggest the continuation of conservative policies irrespective of whether they are implemented by the right or the left

pay as bid versus marginal pricing part ii market behavior under strategic generator offers as the arguments for and against the use of pay as bid pab or marginal pricing mp in electricity pools tend to be qualitative we compare the quantitative behavior of the two markets assuming that generators submit the best strategic offers that correspond to the specified pricing method in part i of this two part study assuming that the system marginal costs for pab and mp are random with known probability density functions we develop generator strategic offers by maximizing the corresponding expected values of the generator profits over the offer parameters in part ii relations are established between the system marginal costs for each market type and a common random demand thus allowing the two markets to be compared through the expected values and variances of the individual generation profits and of the consumer payments this comparison demonstrates both theoretically and through simulation that 1 he expected values of the individual generator profits as well as of the consumer payments are the same under mp and pab and 2 the variances of the individual generator profits and of the consumer payments however are larger under mp than under pab the primary conclusion is then that although mp and pab yield identical expected generator profits and consumer payments the risk of not meeting these expected values is greater under mp than under pab

the impact of resource tax reform on china s coal industry abstract contributing to approximately two thirds of primary energy consumption coal usage is the focus of china s energy policies to regulate the resource taxation system and reduce the burden of coal enterprises the chinese government launched a reform of its resource tax system in 2014 for coal introducing the ad valorem system to replace the volume based system that had been in place for the preceding thirty years to assess the impact of the tax reform this paper constructs two stage dynamic game models by taking the coal and coal fired power industries as the players the market situations of shortage and oversupply are investigated separately empirical data are collected to estimate the model parameters for numerical simulations the model results suggest that the tax reform will reduce both coal prices and the coal industry profitability if the tax levied on each ton of coal is maintained at the same level as before the reform regardless of whether the market is in a shortage or an oversupply situation however the increased buyer s power will amplify the effect of the tax reform the numerical simulations also provide an estimation of the tax rate of the ad valorem system that maintains the profit of the coal industry considering the demand and supply situations in china s coal market policy recommendations are provided to guide further reform of china s resource tax system

electoral competition and the growth of public spending in 13 industrial democracies 1950 to 1983 this article examines a theoretically important issue that has received surprisingly little attention whether the process of democratic competition for public office has fueled the growth of domestic spending in the capitalist democracies since world war ii probably because it is difficult to measure electoral competition in multiparty systems existing comparative studies of public spending either ignore this question or use dubious measures of electoral competition this study presents and tests some conceptually more appealing measures of competition the results show a strong robust relationship between improved indicators of electoral competition and the growth of domestic spending from 1950 to 1973 and 1973 to 1983 the study concludes by analyzing the implications of the findings for economic performance in the capitalist democracies and for the democratic management of fiscal policy

robust self scheduling under price uncertainty using conditional value at risk in a deregulated power industry power producing companies bid in the hour ahead and day ahead power markets in an attempt to maximize their profit for a successful bidding strategy each power producing company has to generate bidding curves derived from an optimal self schedule this self schedule is commonly obtained from a profit maximizing optimal power flow model based on predicted locational marginal prices lmps however at the time of self scheduling the predicted values of the lmps are largely uncertain therefore it is desired to produce robust self schedules that can be used to lessen the risk resulting from exposure to fluctuating prices in portfolio optimization theory methods of risk management include value at risk var and conditional value at risk cvar cvar is known to be a more consistent measure of risk than var in fact whilst cvar is the mean excess loss the var provides no indication on the extent of losses that might be suffered beyond the amount indicated by this measure this research proposes a method for robust self scheduling based on cvar it will be shown that polynomial interior point methods can be used to obtain the robust self schedules from a second order cone program the obtained schedules provide a compromise solution between maximum profit and minimum risk simulation results on a standard ieee bus test system will be used to demonstrate the scheduling model based on cvar

price taker offering strategy in electricity pay as bid markets the recent increase in the deployment of renewable energy sources may affect the offering strategy of conventional producers mainly in the balancing market the topics of optimal offering strategy and self scheduling of thermal units have been extensively addressed in the literature the feasible operating region of such units can be modeled using a mixed integer linear programming approach and the trading problem as a linear programming problem however the existing models mostly assume a uniform pricing scheme in all market stages while several european balancing markets e g in germany and italy are settled under a pay as bid pricing scheme the existing tools for solving the trading problem in pay as bid electricity markets rely on nonlinear optimization models which combined with the unit commitment constraints result in a mixed integer nonlinear programming problem in contrast we provide a linear formulation for that trading problem then we extend the proposed approach by formulating a two stage stochastic problem for optimal offering in a two settlement electricity market with a pay as bid pricing scheme at the balancing stage the resulting model is mixed integer and linear the proposed model is tested on a realistic case study against a sequential offering approach showing the capability of increasing profits in expectation

on the political economy of welfare expansion a comparative analysis of 18 advanced capitalist democracies 1960 1971 this article elaborates the thesis that economic growth and various types of collective action by class linked actors determine the expansion and decline of welfare spending in rich capitalist democracies our multivariate model of this thesis specified to 1960 1971 growth rates in direct cash transfer payments as proportions of gross domestic product is supported strongly by regression analyses these indicate that economic growth notably facilitates transfer payment growth they also suggest that rightist party participation in government notably dampens welfare expansion while leftist centrist and christian democratic party participation in government are conducive to welfare expansion and they suggest that the political influences of both unions and large industrial corporations are conducive to growth in transfers payments as well in addition state authorities appear to augment welfare spending in response to working class protests strike activity and capital investment disinvestment activ

structural distortions and decentralized fiscal policies in emu the combination of discretionary monetary policy labor market distortions and nominal wage rigidity yields excessive inflation as monetary policy tries to exploit nominal wage contracts to address labor market distortions an inflation target reduces inflation but creates a conflict between monetary policy and discretionary fiscal policy if fiscal policy is set at a higher frequency than nominal wages are preventing the associated excessive accumulation of public debt calls for debt ceilings if countries differ substantially in terms of structural distortions uniform debt ceilings must be complemented by country specific debt targets in order to prevent decentralized fiscal authorities from employing debt policy strategically

pay as bid versus marginal pricing part i strategic generator offers as the arguments for and against the use of pay as bid pab or marginal pricing mp in electricity pools tend to be qualitative we compare the quantitative behavior of the two markets assuming that generators submit the best strategic offers that correspond to the specified pricing method in part i of this two part study assuming that the system marginal costs for pab and mp are random with known probability density functions we develop generator strategic offers by maximizing the corresponding expected values of the generator profits over the offer parameters in part ii relations are established between the smcs for each market type and a common random demand thus allowing the two markets to be compared through the expected values and variances of the individual generation profits and of the consumer payments this comparison demonstrates both theoretically and through simulation that 1 the expected values of the individual generator profits as well as of the consumer payments are the same under mp and pab and 2 the variances of the individual generator profits and of the consumer payments however are larger under mp than under pab the primary conclusion is then that although mp and pab yield identical expected generator profits and consumer payments the risk of not meeting these expected values is greater under mp than under pab

an assessment of optimal gas pricing in russia a cge approach domestic gas prices in russia are administratively regulated and they are substantially lower than export netback prices the administrative price regulation operates as an implicit subsidy on domestic gas consumption the russian government aims to liberalise domestic wholesale gas prices in the long term while the export netback parity is defined as a political objective it seems not to be a necessary target anymore the export netback parity is not economically rational for russia because the average export netback price of gas is higher than the marginal cost due to gazprom s market power in export gas markets an optimal domestic gas price is still not well defined this paper addresses this question by employing a comparative static single country multi sector computable generation equilibrium model cge the administrative regulation of domestic gas prices is explicitly modelled the main findings are as follows an increase in the domestic gas price provides economic efficiency gains the more elastic the export and domestic demand for gas the larger the welfare gains the optimal domestic gas price should be approximately 55 of the export netback price increasing the domestic gas price provides additional government revenues which can be used to reduce distortionary taxes on sectoral effects the structure of the russian economy shifts from energy toward non energy intensive sectors in response to an increase in the domestic gas price there is an increase in the export supply of gas furthermore an increase in the domestic gas price leads to a reduction in total co2 emissions

bayesian inference for comparative research rv egression analysis in comparative research suffers from two distinct problems of statistical inference first because the data constitute all the available observations from a population conventional inference based on the long run behavior of a repeatable data mechanism is not appropriate second the small and collinear data sets of comparative research yield imprecise estimates of the effects of explanatory variables we describe a bayesian approach to statistical inference that provides a unified solution to these two problems this approach is illustrated in a comparative analysis of unionization a widely used tool in quantitative comparative politics is the linear regression model estimating relationships between institutional and economic variables observed for a set of countries constituting some population of interest a brief survey of recent comparative research finds no shortage of work of this type for instance remmer 1991 identifies economic crisis as a source of electoral volatility in latin american countries in the 1980s robertson 1990 presents evidence that institutions moderating the transaction costs of negotiations between capital and labor reduce industrial conflict and golden 1993 finds that union wage moderation in industrialized democracies results from coordinated collective bargaining although the methodological advantages are well documented jackman 1985 we identify two distinct problems of statistical inference endemic to this type of quantitative comparative research first because the data constitute all the available observations from a population conventional inference based on the long run behavior of some repeatable data mechanism is not appropriate second because data sets tend to be small and collinear the effects of explanatory variables are estimated imprecisely in most applications the first problem is generally ignored and the second is solved by imposing restrictions on the regression model to obtain sensible results the bayesian model of statistical inference provides a unified solution to these two distinct problems of quantitative comparative research two features of bayesian inference are important in this context first probability is conceived subjectively as characterizing a researcher s uncertainty about the parameters of a statistical model this subjective probability concept seems particularly useful in comparative settings where the data are typically convenience samples not generated by a known probability mechanism such as random sampling second bayesian inference allows the inclusion of other information in addition to the quantitative sample information again this seems useful in the comparative context where rich historical material is commonly available sparking ideas for researchers but formally discarded in the final analysis in the bayesian approach this historical material can be formally incorporated into the analysis we begin by detailing why the nonstochastic and weak data typical of comparative research are problematic for conventional linear regression analysis we next introduce some ideas about bayesian inference and describe bayesian regression analysis these ideas are applied to a comparative analysis of unionization the subject of a recent exchange in the american political science review between michael wallerstein and john stephens stephens and wallerstein 1991 wallerstein 1989 the bayesian regressions we present are supplemented with a sensitivity analysis that investigates how our conclusions depend upon the sample data and our prior beliefs although we survey some ideas in bayesian statistics a full introduction to the bayesian approach to statistical inference is beyond our scope here good book length treatments are pollard 1986 lee 1989 and at a slightly higher level press 1989 our intention here is to spotlight problematic but ignored issues of statistical inference in a common area of application the bayesian alternative that we present represents just one way forward to address these inferential problems

economy wide effects of international and russia s climate policies abstract the objectives of this paper are to analyse the economy wide effects of international climate policy on the russian economy as well as the effects of russia s climate policy on european economies our analysis is based on a general equilibrium model that includes inertias such as imperfect sectoral labour mobility and vintage capital and has a detailed depiction of the power generation sector we found that international climate policy could reduce russia s private welfare by 1 8 annually due to lower revenues from exports of fossil fuels at the sectoral level russia could gain a comparative advantage in producing energy intensive commodities and hence russia s producers of those commodities increase their production and export supplies this could result in a carbon leakage in russia eliminating implicit subsidies on domestic consumption of gas and petroleum products could reduce russia s private welfare loss by 0 6 points and eliminate the carbon leakage nevertheless eliminating implicit subsidies on gas and petroleum products might not be sufficient to achieve the pledged emission reductions by 2030 moreover this leads to an undesirable increase in coal consumption and therefore some additional climate policy such as a carbon tax or an emission trading system might be required we also found that russia s climate policy could have positive but moderate effects on the european economies in particular countries such as lithuania slovakia and hungary benefit due to decreased export prices for gas crude oil and petroleum products from russia

selected works of michael wallerstein centralized bargaining and wage restraint the literature on corporatism has presented much evidence associating highly centralized systems of collective bargaining with wage restraint and relatively successful macroeconomic performance in addition centralized bargaining is associated with relatively small wage differentials this paper presents a model of the impact of centralized wage setting on both real wages and relative wages the central assumption is that the centralization of wage setting at the national level unites unions who are complements in production since a wage increase for one group of workers negatively affects the welfare of other workers who are complements in production centralized wage setters choose wages below the equilibrium of decentralized wage setting it is also shown that if the union confederation maximizes a utilitarian welfare function with equal weights centralized wage setting decreases wage dispersion while low paid workers clearly gain from centralized bargaining high paid workers may prefer that bargaining be decentralized

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

optimal response of a thermal unit to an electricity spot market this paper addresses the optimal response of a thermal unit to an electricity spot market the objective is to maximize the unit profit from selling both energy and spinning reserve in the spot market the paper proposes a 0 1 mixed integer linear programming approach that allows a rigorous modeling of i nonconvex and nondifferentiable operating costs ii exponential start up costs iii available spinning reserve taking into account ramp rate restrictions and iv minimum up and down time constraints this approach overcomes the modeling limitations of dynamic programming approaches and is computationally efficient results from realistic case studies are reported

economic and welfare influences of an energy excise tax in jiangsu province of china a computable general equilibrium approach abstract in recent years although china s energy intensity has gradually decreased the total consumption of energy commodities has increased sharply levying an excise tax on energy commodities is one of the keys to control energy consumption this paper constructed a computable general equilibrium model to simulate levying an energy excise tax in jiangsu province which is one of china s strong economic provinces with lower endowments of energy resources the results show that the energy excise tax is beneficial for energy saving while levying energy will cause economic and welfare declines when at a level tax rate of 5 10 and 15 the loss of gdp will reach 0 27 0 66 and 1 13 respectively and the incomes of inhabitants and enterprises alike will decrease when the energy tax revenue used to compensate for the welfare losses suffered by inhabitants or enterprises there is a double dividend effect energy saving and increasing income moreover the simulation indicated that a 5 improvement of energy efficiency brings about a backfire phenomenon with an increase of 142 in energy consumption however when considering the cost of energy efficiency improvements the rebound effect will be significantly decreased policy suggestions are further recommended to help improve the energy policy in regard to reducing energy consumption

government special interest groups and economic growth in descending order of robustness and strength the four major conclusions are i the experience of industrial countries in the postwar period indicates that a large welfare state has been associated with a high rate of economic growth ii the olson thesis that powerful special interest groups impede growth receives empirical support iii the relation between growth and the welfare state is non linear with increases in the size of the welfare state beyond some critical level one sixth of gdp according to our estimates resulting in reductions rather than increases in the growth rates and iv the strength of the growth promoting properties of the welfare state is positively related to the strength of special interest groups as proxied by the proportion of the work force unionized one possible interpretation of these results runs as follows a large welfare state may retard economic growth by reducing the incentives to work to save to move and to change on the other hand in a situation where special interest groups have aquired significant power to block change if they so desire the welfare state which offers assistance to those who are the victims of change may play a growth enhancing role in reducing the incentive to block change the fourth conclusion just stated supports this view the welfare state may also foster economic growth through favourable effects on social consensus political stability and labour management relations the results suggest that the growth promoting forces predominate as long as the welfare state is not too large but beyond a certain point which corresponds more or less to the median situation among developed countries today the growth retarding elements come to the fore

monetary policy and the informational implications of the phillips curve in this paper i examine optimal monetary policy and the informational implications of the phillips curve in a stochastic macroeconomic model it is assumed that wages are not only indexed to the price level but respond to the state of the labor market as well if information about current disturbances is conveyed only through market prices it turns out that wages have independent informational content over and above the informational content of other aggregate prices the optimal policy in this model implies reactions to changes in both wages and the aggregate price level as unlike the commonly used model of gray and fischer wages and prices are only partially correlated signals about the unobserved disturbances the paper also discusses an extension to an open economy and the relation between exchange rate policy and wages copyright 1990 by the london school of economics and political science

the return of lockouts down under in comparative perspective globalization the state and employer militancy virtually unheard of since the great depression lockouts have reemerged strongly in australia and new zealand just as they have all but disappeared in germany the decline of lockouts in germany is convincingly attributed to the enhanced vulnerability of firms to stoppages in certain circumstances amid globalization but the small open economies of australia and new zealand are equally subject to these pressures using macro and micro level data this article illustrates that neoliberal legislative reforms and institutional change have reconfigured the risks costs and payoffs associated with lockouts amid globalization in doing so some flaws in the varieties of capitalism dual convergence literature are highlighted in particular the post hoc classification of the antipodes as liberal market economies bypasses the role of legislative reform in reconstituting employer interests and the differences in electoral party and state structures that impeded facilitated the rise of neoliberal reformers in

how does tax system on energy industries affect energy demand co2 emissions and economy in china abstract energy savings and co2 emission reduction have become a major issue in recent years taxes on energy production sectors may be an effective way to save energy reduce co2 emissions and improve environmental quality this paper constructs a dynamic recursive computable general equilibrium cge model to analyze the impact of the energy tax on energy economy and environment from the perspective of tax rates and tax forms specific tax and ad valorem tax the results show that adjusting the tax system and the tax rate has important implications for energy conservation while having minor impacts on the output of other industries the impact of an increasing energy tax on the energy demand is greater than the impact on sectoral output indicating that energy efficiency will be increased to some extent the co2 reduction will increase over time when an ad valorem tax is implemented on enterprises we found that ad valorem tax has greater elasticity of economic output energy demand and co2 emission reduction the results support the direction of china s resource tax reform however we argue that it is better to increase the tax rate relatively and relax the control on energy prices so that energy efficiency will increase

unions and interindustry wage differentials abstract we investigate the importance of trade unions in collective bargaining in the context of a developing country manufacturing labor market the methodology we adopt to estimate wage differentials follows the method proposed by haisken denew j p and schmidt c m 1997 review of economics and statistics 79 516 521 since it improves on the standard procedure popularized by krueger a b and summers l h 1988 econometrica 56 193 259 our findings indicate that wage dispersion is far greater in the unionized sector of brazilian manufacturing in contrast to evidence from other countries

the merit order effect a detailed analysis of the price effect of renewable electricity generation on spot market prices in germany the german feed in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies critics state that the costs for consumers are too high an important aspect to be considered in the discussion is the price effect created by renewable electricity generation this paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in germany the central aspect to be analysed is the impact of renewable electricity generation on spot market prices the results generated by an agent based simulation platform indicate that the financial volume of the price reduction is considerable in the short run this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits in the case of the year 2006 the volume of the merit order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

the merit order effect in the italian power market the impact of solar and wind generation on national wholesale electricity prices abstract italy promoted one of the most generous renewable support schemes worldwide which resulted in a high increase of solar power generation we analyze the italian day ahead wholesale electricity market finding empirical evidence of the merit order effect over the period 2005 2013 an increase of 1 gwh in the hourly average of daily production from solar and wind sources has on average reduced wholesale electricity prices by respectively 2 3 mwh and 4 2 mwh and has amplified their volatility the impact on prices has decreased over time in correspondence with the increase in solar and wind electricity production we estimate that over the period 2009 2013 solar production has generated higher monetary savings than wind production mainly because the former is more prominent than the latter however in the solar case monetary savings are not sufficient to compensate the cost of the related supporting schemes which are entirely internalized within end user tariffs causing a reduction of the consumer surplus while the opposite occurs in the case of wind

partially independent central banks politically responsive governments and inflation theories of central bank independence have more exact implications regarding inflation in different political economic environments than generally understood or empirically examined they imply that inflation in any given country time will be a weighted average of what it would be if the central bank completely controlled monetary policy and what it would be if the government completely controlled it with the degree of central bank independence weighting the former an equation embodying this theoretical expectation is estimated by constrained least squares from a time series cross section of inflation rates in developed democracies since the bretton woods era the results confirm that the antiinflationary benefit of central bank independence is not constant but rather depends on every variable in the broader politicaleconomic environment to which wholly autonomous central banks and governments would respond differently conversely the inflationary impacts of all such political economic variables depend on the degree of central bank independence

fiscal policy profits and investment this paper evaluates the effects of fiscal policy on investment using a panel of oecd countries we find a sizeable negative effect of public spending and in particular of its wage component on profits and on business investment this result is consistent with different theoretical models in which government employment creates wage pressure for the private sector various types of taxes also have negative effects on profits but interestingly the effects of government spending on investment are larger than those of taxes our results can explain the so called non keynesian i e expansionary effects of fiscal adjustments jel e22 e62

relative wages under decentralized and corporatist bargaining systems in studying the relationship between wage inequality and centralization in collective bargaining we distinguish central from local systems of wage determination by assuming that a central union takes the employment effects of negotiated wages into account whereas unions disregard these effects in decentralized systems two different sources of wage differentials are studied separately i heterogeneous workers with different skills and ii heterogeneous firms with varying levels of economic rent per employee with respect to skill levels the impact of centralization is ambiguous whereas inter firm wage differentials are likely to be lower in corporatist systems

the rise in unemployment a multi country study one of the most remarkable features of recent economic history has been the remorseless rise in unemployment throughout the industrialized countries however while the trend to higher unemployment is universal the experience of individual countries also differs widely the increase is especially marked within the european community where unemployment rates rival those reached in the interwar years by contrast in the scandinavian countries and japan unemployment is lower and has risen very much less experience in the united states lies somewhere between these extremes and in the last few years unemployment there has fallen sharply

how strong is the macroeconomic case for downward real wage rigidity we explore the existence of downward real wage rigidity drwr at the industry level based on data from 19 oecd countries for the period 1973 1999 the results show that drwr compresses the distributions of industry wage changes overall as well as for specific geographical regions and time periods but there are not many real wage cuts that are prevented more important however drwr attenuates larger real wage cuts thus leading to higher real wages there is stronger evidence for downward nominal wage rigidity than for drwr real wage cuts are less prevalent in countries with strict employment protection legislation and high union density

politics and the structural dependence of the state in democratic capitalist nations i explore empirically a central claim of the structural dependence thesis namely that capitalists ability to disinvest fundamentally conditions policy choices in democratic capitalist systems utilizing time series data for 16 affluent democracies from 1965 to 1984 i find that indeed low rates of business investment are associated with reductions in corporate tax burdens and that these reductions are more pronounced in periods of economic crisis moreover low rates of capital formation engender cuts in personal income taxes during periods of economic stress however i also find that the magnitude of responsiveness of taxation to low rates of investment is relatively small and that analyses of the political context of investment and taxation indicate that governments have choices the responsiveness of corporate tax burdens to capital formation may under some governments be part of a policy mix designed to maintain adequate investment and to address the demands of core constituencies

the illusion of choice defense and welfare in advanced industrial democracies 1948 1978 research on the tendency of governments to trade off welfare spending for defense has generated diverse and often contradictory findings this study attempts to clarify the issue of trade offs by examining expenditure patterns since 1948 for the four major na to allies united states united kingdom federal republic of germany and france when viewed from the perspective of long term trends in shares of outlays trade offs are evident when short term changes in expenditure which are more germane to the potential for one spending category to benefit at the expense of the other are studied no pattern of trade off can be detected a three equation model is estimated to control for the variety of possible determining factors of public resource allocation in none of the four nations does a pattern of trade off emerge except in periods of wartime or postwar reconstruction these findings are consistent with the ability of governments to finance new spending through either increased taxes or larger budget deficits the growing disinclination to use these methods however suggests that the potential for trade offs has perhaps reappeared in the 1980s

price taker bidding strategy under price uncertainty this paper provides a framework to obtain the optimal bidding strategy of a price taker producer an appropriate forecasting tool is used to estimate the probability density functions of next day hourly market clearing prices this probabilistic information is used to formulate a self scheduling profit maximization problem that is solved taking advantage of its particular structure the solution of this problem allows deriving a simple yet informed bidding rule results from a realistic case study are discussed in detail

revisiting the role of labor worker solidarity employer opposition and the development of old age pensions in the netherlands and the united kingdom the purpose of this article is to emphasize the importance of the organizational blueprint of labor unions for welfare state outcomes as a result of the tendency of scholars to view labor as a homogenous and disadvantaged class the existing literature has paid little attention to this many scholars have simply taken labor union support for welfare state development for granted and consequently have focused only on labor union strength this article argues rather that labor union support for welfare state development cannot be taken for granted it shows that labor unions support or oppose welfare state development depending on their organizational blueprint this new approach highlights the importance of the labor union movement s organizational structure as opposed to its organizational strength for welfare state outcomes the article also explores how the organizational structure of the labor union movement shapes the stance of employer interest groups toward welfare state development the empirical findings are based on a comparison of british and dutch postwar old age pension development

modeling u s budgetary and fiscal policy outcomes a disaggregated systemwide perspective this paper develops and estimates a model of u s federal budgetary outcomes that allows for considerable disaggregation across spending categories while providing through cross equation coefficient restrictions substantially more statistical power than traditional approaches we identify significant top down fiscal policy effects on budgetary allocations primarily within the defense budget budgetary responses to macroeconomic conditions are generally countercyclical although middle class entitlements appear to react procyclically to inflation political control of congress influences budgetary outcomes with democrats giving higher priority to domestic spending programs the relative rate of public sector inflation affects spending growth consistent with baumol s disease public opinion affects defense and low income entitlement spending defense spending has also been influenced by perceived soviet threat as well as the level of armed conflict there appear to be small election year effects although not of the sort predicted by political business cycle models with a few exceptions administration specific impacts are relatively small and not systematically related to the party of the president

short versus long coalitions electoral accountability and the size of the public sector this article examines the policy consequences of the number of parties in government we argue that parties externalize costs not borne by their support groups larger parties thus internalize more costs than small parties because they represent more groups this argument implies that the public sector should be larger the more parties there are in the government coalition we test this prediction using yearly time series cross sectional data from 1970 to 1998 in 17 european countries we find that increasing the number of parties in government increases the fraction of gdp accounted for by government spending by close to half a percentage point or more than one billion current dollars in the typical year we find little support for the alternative claim that the number of legislative parties affects the size of the public sector except via the number of parties in government

the implications of institutional design for macroeconomic performance reassessing the claims of consensus democracy the choice between a proportional representation pr or plurality based electoral system is commonly assumed to involve a trade off the former is assumed to provide fairer representation but at a

money and majorities in the federal republic of germany evidence for a veto players model of government spending i formulate a veto players model of policy making by coalition government in the federal republic of germany the model gives testable predictions about how patterns of federal spending respond to changes in government some of the predictions are consistent with conventional wisdom namely that the spd fdp government decreased spending on right wing items when it came to power in 1969 and the return of cdu fdp coalition in 1982 produced a decline in leftwing spending other predictions are less intuitive for example there is no predicted increase in left wing spending associated with the spdfdp coalition and no increase in right wing spending with the cdu fdp government these predictions and those of competing models are tested using disaggregated budget data from fiscal years 1961 1989 controlling for category specific effects and economic conditions the data support the veto players model and this support is robust to a wide variety of plausible assumptions about the parties spending preferences

factor shares and inequality in the uk trends in factor shares in both national and household income are estimated from the national accounts and compared to those derived from the fes household survey in order to obtain more reliable measures of the contribution of changes in factor shares to the contemporary growth in income inequality the national accounts indicate that upward trends in the shares of investment related and self employment incomes have contributed directly to the rise in inequality during the past 20 years though to a generally secondary extent until 1986 at least the paper outlines the importance and the difficulty of including appropriate measures of capital gains and private benefit income in estimates of household investment related income whether the national accounts or household surveys are used for evidence indicating the continuing value of national income shares as a guide to the longer run implications of factor shares for inequality copyright 1996 by oxford university press