spatial variations in the male unemployment inflow rate 1985 spatial variations in the male unemployment inflow rate applied economics vol 17 no 1 pp 41 54

the impact of minimum trading units on stock value and price volatility we study how minimum trading unit changes on the tel aviv stock exchange impact a stock s trading activity price volatility and value the value effects are consistent with merton s 1987 model i e an increase in the investor base trading volume and a decrease in price noisiness affect stock value positively our results extend amihud mendelson and uno s 1999 tests of merton by demonstrating a clear relation between price noisiness changes and stock value changes and by showing that the response to a minimum trading unit decrease becomes less favorable and arguably even negative in the thinnest trading stocks

non parametric production analysis in non competitive environments we extend the non parametric methodology for empirical production analysis to deal with endogenous prices as price endogeneity is often complemented by price uncertainty we consider both the case of certain prices and the case of uncertain prices the extensions are fully compatible with existing tools for eliciting and representing technology and price information and preserves the tractable mathematical programming structure of the original methodology an empirical application to the dutch electricity distribution sector illustrates our extension

on unemployment inflow and outflow in urban china wu z and yao s 2006 on unemployment inflow and outflow in urban china regional studies 40 811 822 as the largest transitional economy in the world china s labour market has a number of characteristics distinctively different from that of the developed economies such as the uk or the usa this paper aims to identify the determinants of unemployment inflow and outflow in urban china with empirical data for 29 provinces over 1989 99 it is found that rural urban migration ownership diversification industrial structural change international trade international competitiveness product wages and age structure are key determinants of unemployment flows the results suggest that due to market imperfections unemployment inflow and outflow are two asymmetric processes with respect to the concerned predetermined variables wu z et yao s 2006 sur l afflux et la fuite du chomage dans la chine urbaine regional studies 40 811 822 en tant que l economie en voie de transition la plus grande du monde

the determinants of equilibrium unemployment in britain a lot of energy is currently being expended in trying to understand what has been happening to unemployment in britain and the rest of the developed world in this paper we look at this question in the british context by trying to confront some possible explanations with the data since the data we use are quarterly over rather a short period we are setting the explanations a very hard test most explanations tend to be rather casual and the theories underpinning them ill developed thus for example the so called real wage argument is based on the idea that real wages affect labour demand and that the equilibrium real wage bears some relatively stable relationship to output per head but how stable is not clear thus whether or not we can expect a well defined stable ceteris paribus dynamic relationship between real product wages as a proportion of output per head and unemployment is equally unclear so if such a relationship does not show up in a quarterly regression model this may not be that serious for the theory nevertheless we must look for the relationship for how else are we ever to discriminate between a plethora of conflicting views the primary emphasis in this paper is on the secular factors affecting unemployment rather than the cyclical variables consequently we shall not be concerned with developing a coherent theory of cyclical fluctuations and in the empirical work we shall control for the cycle simply by making use of those exogenous or predetermined variables which other work in this field suggests are important 2 the remainder of the paper is set out as follows the next section is concerned with specifying a model which generates a definition of equilibrium unemployment the outline of this model is a pair of equations determining the flows into and out of unemployment and these are specified in section ii which looks closely at the possible variables involved section iii then deals with the results and presents some general conclusions

the determinants of equilibrium unemployment in britain a comment in a recent paper nickell 1982 has focused on an empirically neglected aspect of unemployment the flows into and out of the stock he estimates that the natural or equilibrium rate doubled from i967 2 56 to 1979 5 82 almost all unemployment is held to be due to equilibrium or secular forces in this comment we make a number of points whose effect is to cast some doubt on these results

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

the estimation of models of labour market behaviour in this paper we view the labour market experience of individuals as a process of movement between the states of employment and unemployment we note that there are three main ways of sampling members of the labour force namely sampling the members of a specific state sampling the people entering or leaving a state and sampling the population regardless of state the joint distribution of observable and unobservable characteristics of individuals depends on the mode of sampling adopted we examine this dependence and its implications for the interpretation of estimates of models of labour market behaviour

is incomes policy the answer to unemployment in western europe unemployment has remained obstinately high ever since 1975 what has prevented governments from reducing it the answer is simple if unemployment were reduced by normal methods inflation would rise it follows that the only way to cut the long run level of unemployment is to find some other way of controlling inflation no such device will be costless but if we could find any method that was less costly than unemployment we ought to adopt it maurice chevalier was asked in later life what he thought of old age it s not so bad he replied when you consider the alternative that was a true economist talking and it is also the spirit in which i shall approach the unhappy choices open to us my argument will proceed roughly as follows first imagine that a costless incomes policy is available then most people would probably agree that if inflation was too high a temporary incomes policy would be a good idea in order to get inflation down but what then when it was down we would still be left with far too high an unemployment rate only a permanent incomes policy can substantially reduce the non inflationary level of unemployment however against these benefits have to be set the costs of an incomes policy a conventional incomes policy which permanently suspended collective bargaining would be out of the question in a free society so we have to have an incomes policy that works by incentive rather than by regulation the best thing would be a tax on wage increases levied on employers and proportional to wage increases above a prescribed norm i shall spend some time discussing this tax using various different models of wage setting to explain how it would have its effect and finally i shall try producing a first draft of the operator s manual

walrasian tâtonnement auctions on the tokyo grain exchange the tokyo grain exchange tge s itayose mechanism provides the opportunity to analyze functioning walrasian t tonnement auctions wta in 15 677 auctions conducted over 1997 1998 for corn and redbean futures contracts price formation is unexpectedly similar to that observed in continuous double auctions provisional prices and pledges are informative in contrast to behavior observed in experiments few pledges are deceptive because the traders participate repeatedly and because the auctioneer has flexibility when changing the provisional price and ending the auction both the risk of the auction ending and the more equitable dispersion of information increase depth and the speed at which information is embodied in price

the dynamics of unemployment structural change and unemployment flows in this paper we attempt to explain the inflows onto and the outflows from the unemployment stock in spite of great interest in explaining unemployment very little work has been done using time series data on flows 1 it is useful to think of the labour market as being in a perpetual state of flux with people moving from job to job from jobs to unemployment and from unemployment to jobs an analysis of flows allows us to study the dynamics of the labour market and provides us with useful insights which may be clouded by studying unemployment stocks our model explaining the flows is based on cost minimising firms and individuals searching for jobs 2 we postulate an economy consisting of two types of firms expanding firms that hire and declining firms that fire changes in aggregate demand tastes and technology lead to changes in the distribution of firms and hence to the flows section i considers the empirical specification and discusses the results for great britain for the period 1967 iii to 1980 ii to anticipate our results we find that inadequate aggregate demand is a crucial determinant of the growth of unemployment in britain

a taxonomy of automated trade execution systems abstract a taxonomy of automated trade execution systems in financial markets is developed over 50 automated market structures in 16 countries are analyzed these markets consist of computerized rules governing both allowable message types and the means by which such messages are translated into trades computerized market structures are classified by ordered sets of trade execution priority rules trade matching protocols and associated degree of automation of price discovery and transparency to include informational asymmetries between classes of market participants differences in systems across types of financial instruments geographical locations and over time are analyzed jel g15 d44

the macroeconomics of inflation non neutrality inflation non neutrality can only be properly considered in a complete macro model but most existing treatments use partial equilibrium approaches this paper develops an open economy macro model incorporating labor markets and the government budget constraint as well as the product and domestic asset markets that normally feature in the neutrality literature this model is used to examine stability and long run inflation multipliers with various policy combinations numerical simulations show that the quantitative importance of nonneutralities varies across different policy combinations in some cases nonneutralities are very significant copyright 1989 by royal economic society

the causes of unemployment in france a flow approach a flow model is used to identify the causes for rising unemployment in france between 1978 and 1990 two flow equations are estimated as functions of exogenous factors such as aggregate demand factor costs structural shifts and long term factors and then used in simulations for the level of unemployment it is shown that the main reason for high unemployment in france is a slow down in the demand for labour due to high labour and energy costs in the early 1980s and to tight aggregate demand over the whole period change in the labour supply have had an increasing impact in recent years

liquidity maturity and the yields on u s treasury securities the efrect8 of aaaet liquidity on expected retuma for ts with infinite maturities toc ka are eumined for bonda treuury notes and bills with matched maturities of lellll than 6 months the yield to maturity ill higher on notes which have lower liquidity the yield di1ferential between notes and billa is a decreuing and convex function of the time to maturity the results provide a robult confirmation of the liquidity effect in auet pricing this paper studies empirically the effects of the liquidity of capital assets on their prices amihud and mendelson 1986 1989 proposed that liquidity affects asset prices because investors require a compensation for bearing transaction costs transaction costs paid whenever the asset is traded form a sequence of cash outflows the discounted value of this cost stream proxies for the value 1088 due to illiquidity which lowers the asset s value for any given cash flow that the asset generates 1 as a result the return on assets should be an increasing function of their illiquidity other things equal for stocks the illiquidity effect is expected to be strong because their transaction cost sequence is infinite amihud and mendelson 1986 1989 demonstrated that common stocks with lower liquidity yielded significantly higher average returns after controlling for risk and for other factors these results on the importance of liquidity in the pricing of stocks raise additional questions i does the liquidity effect depend on the specific controls used by amihud and mendelson 1986 1989 1 ii does illiquidity have a similarly strong effect on the pricing of bonds whose maturities are finite and iii if liquidity affects bond yields how is this effect related to the bond s time to maturity

political parties world demand and unemployment domestic and international sources of economic activity this article replicates and extends earlier work on the politics of macroeconomic policy by considering political effects on unemployment in 14 western industrial nations between 1960 and 1983 changes of party control of government display broadly the expected effects namely that unemployment falls under left wing governments and rises under right wing governments however the principal conclusions of this article are that partisan effects on unemployment in open economies that is economies heavily dependent on trade with other countries can only be satisfactorily estimated relative to the constraint imposed by the level of world economic activity and that in addition to politicians strategic incentives political institutions and economic regime constraints also determine whether partisan effects on unemployment will be sustained transitory or absent with respect to the latter on the whole no effects are found where no such effects were promised by the new government before taking office where one party or dominant partner coalitions form the effect on unemployment is transitory whereas where broad coalitions form it is sustained or absent finally ceteris paribus any partisan effects are more likely where governments secure parliamentary majorities

regional employment subsidies and migration in this paper the traditional efficiency basis for employment subsidies to high unemployment regions is modified to incorporate a description of the transition to employment expectations of employment depend not just on the rate of unemployment but also on job turnover rates thus unemployed in the high unemployment regions are more incline to migrate at an observed migration equilibrium implicit migration costs are higher and expected income lower than they would be in the simple model this means that the shadow price of a job in the high unemployment region is lower than in the simple model and less than the wage rate

on union preferences and labour market models insiders and outsiders this paper constructs a model of trade union behavior in which there is a distinction between insiders and outsiders this is used to examine one of the most troublesome issues in macroeconomic theory namely the extent to which a rise in aggregate demand might generate wage increases rather than growth in employment a generalization of the most widely used union utility function is presented the analysis reveals the conditions under which insiders will agree to let outsiders into employment derives two step wage preferences and proves a new result on wage rigidity copyright 1987 by royal economic society

the contribution of market makers to liquidity and efficiency of options trading in electronic markets this paper examines the contribution of market makers to the liquidity and the efficiency of the options market in a unique setup of an order driven computerized trading system in which market makers and other participants operate under equitable conditions the main findings are 1 liquidity increased a 60 increase in trading volume and a 35 decrease of bid ask spreads 2 the efficiency of shekel euro options trading improved deviations from put call parity decreased significantly by 12 and skewness decreased by about 30 we also find that the net cost to the exchange is out weighted by the benefit to the trading public and that the presence of market makers encouraged trading between other participants far beyond their own trading 2005 elsevier b v all rights reserved

unemployment in britain male unemployment in britain has risen from around 2 per cent in the 1950s to around 17 per cent in 1985 see figure 1 the figures are for male unemployment because there is no consistent series for women 1 even more remarkably unemployment has fallen in only three years out of the last twenty 1973 1978 and 1979 to account for this we need a model that explains both changes in the natural or non accelerating inflation rate of unemployment nairu and deviations from it we use a three equation supply side model centred on the labour market this has two main features the first concerns the determination of employment in the short run the labour demand function that we use cuts through the fruitless debate now raging especially in europe as to whether current unemployment is classical or keynesian according to the classical view employment is too high because real wages are too high according to the keynesian view real wages are not binding and unemployment is high because the product market does not clear with prices too high relative to nominal demand the whole debate is set in the framework of perfect competition yet in perfect competition prices are set by impersonal forces and it is not clear what could possibly stop prices clearing the market it is much more reasonable to think of prices as being set by imperfectly competitive firms existing prices being the best they can think of given the demand they face in this context firms demand for labour will depend on both the real product wage and the level of real aggregate demand this is the demand function we estimate and it conforms both to common sense and to the data however this does not imply that employment can be made to grow without limit by pumping up real demand for in the medium term when price surprises are eliminated our model determines three variables employment real wages and real demand on the basis of three equations an employment equation a price equation and a wage equation thus in the medium term there is a natural level of employment and corresponding to this a natural level of real aggregate demand the second key feature of our model concerns the medium term determination of unemployment in the medium term the planned mark up of wages over prices in wage settlements must be consistent with the mark up of prices over wage costs in employers pricing behaviour for if wage setters try to set real product wages higher than is consistent with employers pricing behaviour this generates ever increasing inflation thus the key to understanding unemployment in the medium term is the behaviour of wage setters if events occur that push them towards too high real wages then unemployment has to rise to offset these influences we shall call these influences wage pressure variables or push factors and they are clearly crucial in understanding unemployment the variables here include the social security system employment protection

unemployment dynamics in britain we examine the inter related dynamics of the unemployment flows and stock our model allows them to be linked through the standard accounting identity but also through behavioural relationships we find that for the uk the bulk of the correlation between duration and the unemployment stock arises from the dependence of duration on unemployment taking careful account of the inter temporal identity outflow shocks have contributed little to the evolution of unemployment since the late 1960s given that the correlation of duration and unemployment arises from the behavioural relationship we show that unemployment dynamics arise mostly from shocks to the inflow unemployment remains one of europe s more pressing economic and social problems as highlighted in the eu s lisbon declaration of 2000 a dynamic approach to unemployment starts from the recognition that unemployment is a stock and changes through shocks to the outflow and inflow the research and policy focus has generally been on the outflow process or equivalently unemployment duration a glance at figure 1 shows why this might be so it reveals a very strong co movement of the unemployment rate and the proportion of the unemployed out of work for a year or more analysts have used data like this to argue that the source of unemployment fluctuations has been changes in the outflow process 1 possibly as a consequence of this most policies directed at reducing unemployment focus on improving the search effectiveness and employability of the currently unemployed the unemployment flows and stock are related in quite complex ways and in this paper we focus on these inter related dynamics the model we use allows them to be linked in two ways first there is the simple accounting relationship whereby shocks to the flows accumulate in the stock second search and matching models suggest behavioural relationships of the flows depending on unemployment the presence of the nonlinear accounting identity in the model makes the analysis of the joint system problematic so we proceed sequentially investigating first one link and then the other we find that for the uk the bulk of the correlation between duration and the unemployment stock displayed in figure 1 arises from the dependence of the former on the latter we find a strong dependence of the outflow rate on unemployment taking careful account of the inter temporal identity on the other hand outflow shocks have contributed little to the evolution of unem

unemployment and the inter regional mobility of labour the relationship between unemployment and interregional labor migration in the united kingdom is explored using data from the labour force survey for 1984 and 1977 the authors conclude that the experience of unemployment increases the likelihood of migration and that households in areas of high unemployment are more likely to move they also find that during periods of higher overall unemployment migration propensities are reduced annotation

structural unempolyment in australia this paper examines whether structural unemployment increased in australia over the last two decades a simple regression model has been considered for testing the hypothesis of increase in unemployment of several segment of the labour force over time six dimensions of the labour force namely age sex region duration of unemployment occupation and industry have been taken into account analysis of the regression results reveals that the structural unemployment problem is substantial with respect to age sex duration of unemployment occupation and industry regarding region the evidence for structural symptom is not very strong

allocative efficiency measurement with endogenous prices abstract in the nonparametric measurement of allocative efficiency output prices are fixed if prices are endogenous the overall output in the market determines the allocative efficient point we develop an alternative semi nonparametric model that allows prices to be endogenously determined

evaluation periods and asset prices myopic loss aversion at the financial marketplace abstract examining myopic loss aversion mla benartzi s thaler r 1995 myopic loss aversion and the equity premium puzzle quarterly journal of economics 110 73 92 in real financial markets has several merits in repeated situations investors may learn from each other aggregate market prices may eliminate individual violations of expected utility and individuals may decide differently in real situations than in laboratories we utilize a special feature at the tel aviv stock exchange tase occasional shifts of securities from daily to weekly trading if investors decisions are influenced by trading frequency manipulation then returns should be predictably affected mla results in a negative relation between risk aversion and the length of the evaluation period thus the longer the evaluation period is the lower the expected return is this intuition also suggests reduced sensitivity to economic events in longer evaluation periods we find strong support for mla in the marketplace when testing expected return as well as return sensitivity

how natural is canada s high unemployment rate abstract a reduced form price equation for canada 1956 1984 yields a stable estimate of 4 9 percent for the natural unemployment rate of men aged 25 and over with strong evidence against hysteresis once structural influences are accounted for the resulting profile for the aggregate natural unemployment rate rises smoothly from 5 5 percent in 1961 to a maximum of 8 0 percent in 1977 1978 and then declines rapidly to 6 4 percent in 1985 calculations based on an estimated production structure for the aggregate non energy sector of canada provide additional evidence against the excess real wage hypothesis and for the view that the recent fluctuations in canada s unemployment rate are mostly of the keynesian variety

the effect of wage restraint on labour market flows the effects are studied of a wage restraint policy on flows in the labour market flows into and out of employment are distinguished and simple models are considered for these flows wage costs in particular are found to affect the flow of employment into unemployment which can be considered as a measure of job destruction but wage costs have no effect on the number of new hires which can be considered as a measure of job creation therefore wage moderation has preserved jobs that would otherwise have been destroyed the inflow of new hires is influenced by investments the generosity of the social benefit system and by structural mismatch apart from wage costs interest costs of firms also play a role in the job destruction process particularly since the beginning of the 1980s

theoretical developments in the light of macroeconomic policy and empirical research macroeconomics is surveyed with emphasis on the implications of the new classical and rational expectations critiques for the keynesian paradigm and the role of macro policies at the background are the main macro developments of the 1 970s and 1 980s as well as the specific lessons of recent high chronic inflation processes a synthesis is emerging in which the basic keynesian view of the existence of market and price coordination failures as well as room for pareto improving policy intervention are maintained at the same time the theoretical underpinnings are undergoing substantial change mainly due to a rational expectations reformulation

price discovery in auction markets a look inside the black box opening mechanisms play a crucial role in information aggregation following the overnight nontrading period this article examines the process of price discovery at the new yorkstockexchange single price opening auction we develop a theoretical model to explain the determinants of the opening price and test the model using order level data we show that the presence of designated dealers facilitates price discovery relative to a fully automated call auction market this is consistent with specialists extracting information from observing the evolution of the limit order book in addition the specialist s opening trade reflects noninformational factors such as price stabilization requirements

trading structure and overnight information a natural experiment from the tel aviv stock exchange abstract a unique data set from the tel aviv stock exchange tase is used to study the effect of trading mechanisms on stock return volatility the tase represents a natural experiment which allows separation of the overnight information effect from the trading mechanism effect the data span a time period in which the order of the trading mechanisms a sequential continuous mechanism and a call auction was switched since overnight information should impact opening prices equally across periods this affords an unparalleled opportunity to examine the trading mechanism effect without the confounding effect of the non trading period this paper finds that the null that opening variances equal closing variances cannot be rejected for either period further the tests cannot reject null that the ratio of opening to closing return variances is equal across periods this suggests that the trading mechanisms on the tase do not differ in their effect upon return volatility

market microstructure and securities values evidence from the tel aviv stock exchange abstract this paper examines the value effects of improvements in the trading mechanism selected stocks on the tel aviv stock exchange were transferred gradually from a daily call auction to a mechanism where the call auction was followed by iterated continuous trading sessions this event was associated with a positive and permanent price appreciation the cumulative average market adjusted return over a period that started five days prior to the announcement and ended 30 days after the stocks started trading by the new method was approximately 5 5 in addition we find positive liquidity externalities spillovers across related stocks and improvements in the value discovery process due to the improved trading method finally there was a positive association between liquidity gains and price appreciation

a note on trading mechanism and securities value the analysis of rejects from continuous trade we examine 97 stocks that moved from continuous trade back to single daily auctions the response to exit from continuous trade is almost a mirror image of the entry response documented in amihud et al 1997 amihud y mendelson h lauterbach b 1997 journal of financial economics 45 365 390 upon exiting continuous trade stock liquidity price accuracy and value drop an exception is however identified ten stocks that were omitted from continuous trade within three months of their addition have negative excess returns upon entry into continuous trade and positive excess returns upon exit these immediate rejects had relatively low volumes before entering continuous trade which suggests that for thinly traded stocks simple unassisted continuous trade may not be optimal 2001 elsevier science b v all rights reserved jel classification g14

a simple cost reduction strategy for small liquidity traders trade at the opening we extend the market microstructure literature by examining trading strategies of a small discretionary liquidity trader in call and continuous markets our investigation of trading strategies uses intraday market and limit orders and introduces the market at open order as an alternative strategy for a small liquidity trader we find that a small trader can reduce transaction costs by trading at the opening using tick by tick transaction data we demonstrate that the market at open order consistently produces better prices than market and limit orders executed during the trading day i introduction traders have an economic incentive to act strategically in this study we examine three types of submission strategies for small liquidity traders the marketat open order intraday market orders and intraday limit orders our objective is to determine if any particular strategy consistently outperforms the other strategies in receiving better prices for a small discretionary liquidity trader we use tickby tick transaction data to simulate order executions our results demonstrate that the market at open strategy benefits a small liquidity trader we contribute to the existing literature in that we empirically contrast trading strategies in a continuous market and a call market and provide empirical support for the theoretical trading models that show liquidity traders have a preference to band together when submitting orders to trade the first set of strategic trading models concentrates on the optimal trading behavior of informed traders for example kyle 1985 looks at a sequential batchtrading market in which informed traders and liquidity traders submit orders to a risk neutral market maker attention is paid to the strategic trading patterns of

a measure of price advantage and its decomposition into output and input specific effects abstract in this paper we develop a price advantage measure obtained as the difference between efficiency scores computed with quantity based and value based data this measure is interpreted as an increase in the firm s profit rate due to a favourable input and output price environment compared to traditional allocative efficiency measure which uses only the evaluated firm s prices price advantage measure considers prices of peers in the market our main contribution is to show that total price advantage decomposes into the sum of output and input specific price advantages the application of the measure to a french farm s dataset in the context of the successive common agricultural policy reforms aiming at the liberalization of agricultural prices 1992 2013 illustrates our theoretical model

information trade and derivative securities hellwig s 1980 model is used to analyze the value of improving trading opportunities by more frequent trading in the underlying asset or by trading in a derivative asset with multiple trading sessions uninformed investors behave as rational trend followers while more informed investors follow a contrarian strategy as trading becomes continuous pareto efficiency is achieved with trading in an appropriate derivative security pareto efficiency may be achieved in only a single round of trading all derivative claims are then priced on black and scholes 1973 principles and in the absence of further supply shocks no trading will take place in subsequent trading rounds article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

liquidity taxes and short term treasury yields this article investigates differences in yields on identical treasury notes and bills and shows that they reflect differences in liquidity immediacy risk and taxes it proposes an empirical measure for differences in the liquidity risk of notes and bills the volatility ofthe underlying rate times the ratio of bills turnover to notes turnover because differential taxes affect sellers but not buyers of bills and notes the results reject free of informational problems the hypothesis that the notes demand curve is horizontal note bill yield differences also decrease with inventories of notes the less liquid asset

hysteresis and instability in the natural rate of unemployment in this paper it is pointed out that the long run phillips curve genus contains upward and downward sloping species as well as the vertical species two models are used in one the rate of inflation helps determine the natural rate of unemployment as proposed by friedman in the other the process of moving from one inflation rate to another helps shape the natural rate according to the hysteresis effect proposed by phelps in both cases the resulting models are unstable implying that a vertical long run phillips curve will not be regained if disturbed

why do firms offer employment protection this paper derives optimal employment contracts when workers are risk averse and there are employment and unemployment risks without income insurance consumption rises during employment and falls during unemployment optimal employment contracts offer severance compensation and sometimes give notice before dismissal severance compensation smooths consumption during employment and dismissal delays insure partially against the unemployment risk because of moral hazard during the delay consumption falls to give incentives to the worker to search for another job no dismissal delays are optimal if exogenous unemployment compensation is sufficiently generous

continuous trading or call auctions revealed preferences of investors at the tel aviv stock exchange we use the move of israeli stocks from call auction trading to continuous trading to show that investors have a preference for stocks that trade continuously when large stocks move from call auction to continuous trading the small stocks that still trade by call auction experience a significant loss in volume relative to the overall market volume as small stocks move to continuous trading they experience an increase in volume and positive abnormal returns because of the associated increase in liquidity overall though a move to continuous trading increases the volume of large stocks relative to small stocks

search models and applied labor economics individual effects in a nonlinear model explicit treatment of heterogeneity in the empirical job search model this paper extends the empirical version of a job search model to permit heterogeneity in the location of wage offer distributions population variance in wage offers is decomposed into variance due to heterogeneity and variance facing each individual heterogeneity is found to be an important source of offer variance in the population the amount of pure wage offer dispersion facing individuals is found to contribute little to population variance

the effect of outsiders on union contracts abstract a recent proposal for incorporating the insider outsider distinction into the static monopoly union model results in implausible comparative static properties this paper presents an alternative formulation that rehabilitates the monopoly union model

the flow into unemployment in britain this paper examines a largely neglected aspect of unemployment dynamics namely the flow into unemployment a model is set up relating this to the demand for labor and the quit rate the empirical results lend considerable support to the model a fall in planned employment growth or a fall in the quit rate both raise the inflow rate the implications of the results for unemployment vacancy analysis are discussed and the distinction made between symmetric and asymmetric shocks to the matching function copyright 1992 by royal economic society

insider effects in wage determination abstract the paper attempts to shed new light on the determinants of industry wages by a cross country comparison of wage setting relationships making use of comprehensive and consistent panel data on industries from the early 1960s to the mid 1980s the empirical analysis involves estimations of identically specified industry wage equations for each of five countries sweden norway finland germany and the united states a key finding is that industry wages in the u s are the most responsive to sectoral price and productivity changes by contrast industry wages in the nordic countries are largely unaffected by sectoral conditions the results cast doubt on the competitive model as an accurate characterization of wage setting under decentralization

nonemployment stigma as rational herding a field experiment abstract long spells of unemployment are known to reduce the likelihood of re employment but it is difficult to discern the reasons for this observation using an experimental method that controls for search intensity and possible discouragement of job applicants i document that job market opportunities for the nonemployed diminish rapidly over time in this experiment duration dependence is solely due to firm perceptions why do firms view long spells of nonemployment as negative signals rational herding is one important factor managers believe that unemployed applicants were previously interviewed and if the applicants were productive they would have been hired

employment during the thatcher years did they fall or were they pushed the paper examines the argument that real wage push has been responsible for the observed increase in unemployment in the uk over the period 1979 to 1985 it explains why real wage push should have been associated with a decline in real profits and that this decline did not in fact occur the association between real wage push and profit decline is complicated by the presence of intermediate inputs and by compositional effects these are also considered an equation accounting for these complications is derived and estimated the data used are individual company records for around 2 300 of the largest uk public and private corporations with on average about 5 500 employess the hypothesis that real wage push caused recently observed increases in unemployment is rejected by the data

a closing call s impact on market quality at euronext paris abstract the paris bourse currently euronext paris refined its trading system to include electronic call auctions at market closings in 1996 for its less liquid continuous b stocks and in 1998 for its more actively traded continuous a stocks this paper analyzes the effects of the innovation on market quality our empirical analysis of price behavior for two samples of firms 50 b stocks and 50 a stocks for two different calendar dates 1996 and 1998 indicates that introduction of the closing calls has lowered execution costs for individual participants and sharpened price discovery for the broad market we further observe that market quality is improved at market openings albeit to a lesser extent we suggest that a positive spillover effect explains the closing call s more pervasive impact

wages and unemployment a general framework these remarks are addressed directly to the question of the relationship between wages and unemployment and provide neither a commentary on nor a critique of the stimulating papers presented by edmond malinvaud and robert gordon they do however bear on a number of the issues raised in those papers professor gordon s contribution takes it as read that the business cycle is the fundamental issue of interest in any discussion of wages and unemployment in spite of his avowed and most welcome intention to avoid looking at the world through u s tinted spectacles this primacy of the business cycle phenomenon is closely related to the american post war experience in britain and to a slightly lesser extent in other european countries the fundamental unemployment problem is the inexorably rising trend upon which the business cycles are superimposed this trend is barely apparent in the united states and consequently causes little concern thus the figures in table i show that in britain male unemployment was more thanfive times higher in the last five years of the seventies than it was in the first five years of the fifties and it seems likely that it will almost double again in the first five years of the eighties the contrast with the united states could hardly be more dramatic another dramatic difference between the united states and britain which emerges strongly in professor gordon s paper is the fact that in the former employment fluctuations at least in manufacturing are strongly related to fluctuations in nominal gnp and this is not true in the latter where it appears that nominal gnp fluctuations are dominated by nominal changes thus it may not be very useful to think of nominal gnp as the exogenous driving force behind fluctuations in the british context where then should we look for an explanation of the growth in unemployment and what is the role of wages many british commentators have noted that along with the rising trend in unemployment there has also been a rising trend in real labour costs relative to output per head thus from i964 to i980 this number has risen in britain by about 35 reflecting a considerable increase in the price of labour relative to what is produced this is the well known argument that unemployment is caused by workers pricing themselves out of a job this is more rational than it sounds because generally speaking it would be employees pricingothers outofa job on the other side of the same coin dr morley in thisjournal in 1979 noted that 88 of the variation in annual british unemployment from 1953 to 1977 could be explained by the pre tax profit share one year lagged thus unemployment appears to be related to the fact that real wages and the real return on capital are simply wrong which relates of course to the extensive analysis provided in m malinvaud s contribution

wages policy and unemployment in australia it is generally accepted among australian economists that high rates of growth of wages at various times over the last decade have made the achievement of full employment and lower rates of inflation more difficult fear of a further acceleration of wage growth has also been a policy constraint it is when one attempts to go further that considerable disagreement becomes evident from a labour market viewpoint there does not seem to be a consensus as to the answers to the two broad questions that should be addressed first how important are wage changes relative to other factors that depress employment and add to the inflation rate second how does government policy impinge on the process that generates wage changes to do justice to both of these in a paper as short as this one is difficult so i shall focus most of the paper on the second question the relationships between government policy and wage changes are particularly important at this time for most of the last decade successive governments have operated a national wages policy which to a large degree has been based on the indexation of wages for past price changes the latest experiment the prices and incomes accord is the centrepiece of the current government s employment and inflation policy and after almost two years of wide community and media support the key principles upon which it is based are suddenly being questioned 1 our prime endeavour therefore will be to build up sufficient understanding of the wage determination process so that some evaluation can be made as to the effectiveness of these national wage policies this turns out to be a remarkably difficult task which generates considerable concern in our mind that the data may not be sufficiently rich to serve as a basis for sound judgments it does appear however that the effect of a given level of unemployment upon wage changes has consistently weakened over the last decade why this should be so is a major unresolved puzzle i offer a loosely constructed theory that is consistent with the facts but it is by no means the only possible explanation section i provides a description of wage setting in australia and some key facts of the economy in section ii the statistical analysis of wage changes focuses on two competing theories one is the phillips curve approach and the other stresses that wage outcomes may be to a significant degree independent of the level of unemployment and may depend instead on utilization rates of labour within the firm section iii considers the efficacy of incomes policies in australia some final comments areoffered in section iv

an empirical study of long term unemployment in australia this paper has two parts the first part concentrates on modeling transitions out of unemployment using aggregated gross flow data models are estimated using monthly transition probabilities for march april 1984 this analysis produces evidence consistent with negative duration dependence but sheds no light on the role of macroeconomic factors the second part focuses on this issue a time series analysis of the proportion of long term unemployment using data for four age and sex groups provides evidence that a proportionately greater increase in long term unemployment in australia in the 1970s has been associated with reduction in job availability and the effect of certain supply shocks

the determinants of equilibrium unemployment in britain a reply in my original paper nickell i982 r analyse a theoretical model concerned with flows into and out of unemployment consequent on this analysis i estimate equations which explain the quarterly inflow and outflow rates i e inflow employment and outflow unemployment in the first section of his comments price i985 price rightly points out that such rates cannot be thought of as quarterly probabilities because of the length of the time interval involved on the other hand if it is thought to be helpful the probability interpretation could be sustained to a high degree of approximation if one thought of the quarterly rates as the average daily probability times the number of days in a quarter however since this issue is of no significance vis a vis the original paper i shall turn to the second section of price s comment which deals with my results his first point is concerned with the degree of serial correlation in the residuals in my paper i report durbin watson and box pierce tests the former being a small sample test the latter an asymptotic test neither test rejects the null in either equation price reports that large sample versions of the lm test reject the null in both equations with the outflow rate equation coming off worst the large sample lm test for nth order autocorrelation is based on the r2 from a regression of the fitted residuals on n lags of itself plus all the regressors in the outflow equation there are i5 regressors and 44 observations in order to include n lags on the residuals n observations must be dropped and the regression used to generate the lm test then includes i5 n variables on the right and uses 44n observations the number of degrees of freedom remaining is thus 292n so even with the test for first order serial correlation we have only 27 degrees of freedom remaining and when we arrive at twelfth order serial correlation we are down to 5 degrees of freedom this might explain why the first order lm test is somewhat at odds with the durbinwatson test which is after all a perfectly reasonable small sample test of serial correlation in this particular equation so i do not find this to be convincing evidence that the model originally reported is misspecified however the fact that price finds evidence of parameter instability across the middle of the sample is a more serious matter this is always a potential problem with short samples and lots of regressors since the equations are more or less bound to be overfitted i am guilty as charged on this count the next section of price s comment is concerned for the most part with the outflow rate equation in essence he objects to my running a regression to explain the log outflow rate log ot ut 0 outflow u unemployment in spite of the fact that it is a natural consequence of the theory to back up his i96