financial collapse a lesson from the great depression abstract we analyze financial collapses such as the one that occurred during the u s great depression from the perspective of a monetary model with multiple equilibria the multiplicity arises from the presence of a strategic complementarity due to increasing returns to scale in the intermediation process intermediaries provide the link between savers and firms who require working capital for production fluctuations in the intermediation process are driven by variations in the confidence agents place in the financial system from a positive perspective our model matches quite closely the qualitative changes in important financial and real variables the currency deposit ratio ex post real interest rates deflation and production over the great depression period an experience often attributed to financial collapse further we assess whether the policy prescription advocated by friedman and schwartz adding liquidity to the banking system through increases in the money supply would have overcome strategic uncertainty and thus avoided a financial collapse

equal pay by gender and by nationality a comparative analysis of switzerland s unequal equal pay policy regimes across time what explains the adoption of two different policies on equal pay by gender epg and by nationality epn in switzerland and why is the liberal litigation based equal pay policy regime set up by the gender equality act of 1996 much less effective than the neocorporatist accompanying measures to the bilateral european union switzerland agreement on free movement of persons adopted in 1999 to ensure equal pay for workers of different national origins the formation of two different policy regimes cannot be explained by different levels of political will equally different varieties of capitalism cannot explain the setup of the two different equal pay policy regimes within the very same country instead our qualitative comparative analysis across time suggests that the differences can be best explained by a particular constellation of attributes namely the use of different policy frames that is anti discrimination in the epg and unfair competition in the epn case and the different setting of interest politics epitomised by the opposite stances adopted by switzerland s employer associations in the two cases

law and employment lessons from latin america and the caribbean analyzing the effects of regulation and deregulation on latin american labor markets law and employment joins the ongoing debate about the virtues and costs of legislating mandatory benefits for workers of the numerous labor regulations that were altered or created in latin america during the last thirty years many have had unintended and far reaching results nobel prize winning economist james j heckman and carmen pages document the behavior of firms attempting to stay in business and be competitive while facing the high costs of complying with these labor laws they challenge the prevailing view that labor market regulations affect only the distribution of labor incomes and have little or no impact on efficiency or the performance of labor markets this volume shows that mandated benefits reduce employment have a disruptive impact on turnover rates and labor market flexibility promote inequality and discriminate against marginal workers along with in depth studies of colombia peru brazil argentina chile and uruguay law and employment provides comparative analysis from a range of european countries and the united states while also covering important changes in reg

does an employment protection law lead to unemployment a panel data analysis of oecd countries 1990 2008 this paper analysed the oecd data on employment protection for 23 oecd countries over the time span 1990 2008 on the basis of alternative dynamic panel data models and panel causality tests and examines the validity of the neo liberal argument that strictness of employment protection hurts labour through increased long term and youth unemployment rates while it finds no empirical basis for this orthodox standpoint it observes that long term unemployment dampens aggregate production which in turn aggravates unemployment problem

commentary on industrial pricing theory and mangerial practice noble and gruca 1999 this issue provide useful insights into the pricing practices managers employ their findings indicate managerial pricing practices are heavily dominated by internal cost based approaches particularly relevant is the absence of value based pricing practices noble and gruca s findings indicate that the emerging market orientation work has not connected to pricing practice this work poses a significant challenge for marketing theoreticians and educators how can managers be helped to move beyond internally focused to externally customer focused pricing practice

managing channel profits a channel of distribution consists of different channel members each having his own decision variables however each channel member s decisions do affect the other channel members profits and as a consequence actions a lack of coordination of these decisions can lead to undesirable consequences for example in the simple manufacturer retailer consumer channel uncoordinated and independent channel members decisions over margins result in a higher price paid by the consumer than if those decisions were coordinated in addition the ensuing suboptimal volume leads to lower profits for both the manufacturer and the retailer this paper explores the problems inherent in channel coordination we address the following questions what is the effect of channel coordination what causes a lack of coordination in the channel how difficult is it to achieve channel coordination what mechanisms exist which can achieve channel coordination what are the strengths and weaknesses of these mechanism what is the role of nonprice variables e g manufacturer advertising retailer shelf space in coordination does the lack of coordination affect normative implications from in store experimentation can quantity discounts be a coordination mechanism are some marketing practices actually disguised quantity discounts we review the literature and present a simple formulation illustrating the roots of the coordination problem we then derive the form of the quantity discount schedule that results in optimum channel profits this article was originally published in marketing science volume 2 issue 3 pages 239 272 in 1983

defensive marketing strategies this paper analyzes how a firm should adjust its marketing expenditures and its price to defend its position in an existing market from attack by a competitive new product our focus is to provide usable managerial recommendations on the strategy of response in particular we show that if products can be represented by their position in a multiattribute space consumers are heterogeneous and maximize utility and awareness advertising and distribution can be summarized by response functions then for the profit maximizing firm it is optimal to decrease awareness advertising it is optimal to decrease the distribution budget unless the new product can be kept out of the market a price increase may be optimal and even under the optimal strategy profits decrease as a result of the competitive new product furthermore if the consumer tastes are uniformly distributed across the spectrum a price decrease increases defensive profits it is optimal at the margin to improve product quality in the direction of the defending product s strength and it is optimal at the margin to reposition by advertising in the same direction in addition we provide practical procedures to estimate 1 the distribution of consumer tastes and 2 the position of the new product in perceptual space from sales data and knowledge of the percent of consumers who are aware of the new product and find it available competitive diagnostics such as the angle of attack are introduced to help the defending manager this article was originally published in marketing science volume 2 issue 4 pages 319 360 in 1983

the effects of the unemployment insurance payroll tax on wages employment claims and denials abstract following a 13 year period when all employers in washington paid the same unemployment insurance ui tax rate washington was forced to adopt an experience rated tax system in 1985 we use this natural experiment to explore both tax incidence and the effects of experience rating we find that industry average tax rates are largely passed on to workers through lower earnings however our estimates imply that a firm can shift much less of the difference between its tax rate and the industry average rate our results also indicate that experience rating reduces turnover and ui claims and increases claim denials

gender gaps in unemployment rates in oecd countries in some oecd countries the male and female unemployment rates are very similar but in others notably the mediterranean countries the female unemployment rate is much higher than the male explaining these cross country differences is the subject of this article we show that in countries where there is a large gender gap in unemployment rates there is a gender gap in both flows from employment into unemployment and from unemployment into employment we conclude that differences in human capital accumulation between men and women interacted with labor market institutions is an important part of the explanation

gender inequality and economic growth a cross country analysis abstract this paper investigates empirically the determinants of economic growth for a set of semi industrialized export oriented economies in which women provide the bulk of labor in the export sector the primary hypothesis tested is that gender inequality which contributes to women s relatively lower wages was a stimulus to growth via the effect on exports during 1975 95 empirical analysis shows that gdp growth is positively related to gender wage inequality in contrast to recent work which suggests that income inequality slows growth evidence also indicates that part of the impact of gender wage inequality on growth is transmitted through its positive effect on investment as a share of gdp

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

inflation and unemployment the world economy today is vastly different from the 1930s when seymour harris the chairman of this meeting infected me with his boundless enthusiasm for economics and his steadfast confidence in its capacity for good works economics is very different too both the science and its subject have changed and for the better since world war ii but there are some notable constants unemployment and inflation still preoccupy and perplex economists statesmen journalists housewives and everyone else the connection between them is the principal domestic economic burden of presidents and prime ministers and the major area of controversy and ignorance in macroeconomics i have chosen to review economic thought on this topic on this occasion partly because of its inevitable timeliness partly because of a personal interest reaching back to my first published work in 1941

structural transformation of cereal markets in ethiopia abstractwe study cereal markets in ethiopia over the last decade a period that has been characterised by important local changes including strong economic growth urbanisation improved road and communication infrastructure and higher adoption of modern inputs in agriculture these changes are associated with better spatial price integration as well as with significant declines in real price differences between supplying and receiving markets and in cereal milling and retail margins in short important improvements have occurred in ethiopia s cereal marketing system this is especially important because dysfunctional cereal markets were previously identified as an important cause of food insecurity in the country

practice prize reports the practice prize reports consist of one article with two parts as follows sinha ashish j jeffrey inman yantao wang joonwook park attribute drivers a factor analytic choice map approach for understanding choices among skus and tellis gerard j rajesh k chandy deborah macinnis pattana thaivanich modeling the microeffects of television advertising which ad works when where for how long and why

what happens when information leaves a market evidence from postbankruptcy consumers federal law mandates the removal of personal bankruptcies from credit reports after 10 years the removal s effect is market efficiency in reverse the short term effect is a spurious boost in apparent creditworthiness especially for the more creditworthy bankrupts delivering a substantial increase in both credit scores and the number and aggregate limit of bank cards the longer term effect is lower scores and higher delinquency than initial full information scores predict these findings relate to both the debate over the bankruptcy code and the wisdom of influencing market clearing by removing information

editorial does good marketing cause bad unemployment questionable methods for increasing nominal wages reduce real wages i e buying power by creating inflation shortages lower quality and long term unemployment to increase real wages i e the ability to buy more economic principles prescribe increasing productivity i e greater output from less input in contrast marketing principles prescribes increasing the value of output i e greater customer benefits through innovation beyond increasing real wages innovation spawns new occupations better matching individuals with skills and providing greater nonmonetary benefits i e job satisfaction unfortunately threatened entrenched incumbents often solicit protectionist legislation claiming negative externalities e g short term unemployment lower wages and burdens on society innovation does require labor to move from inferior to superior organizations i e unemployment however protectionism only delays and dramatically aggravates the inevitable trauma associated with progress as worker skills firm practices and buyer welfare fall further behind recent attacks demonizing wal mart e g the dubious vlasic pickle claim epitomize this situation they are archaic vanilla protectionism menacing both imperiled consumers and every consumer driven business

wage effects of the move toward free markets in east germany this analysis of data from the german socio economic panel soep for the years 1989 91 illuminates important changes in the structure of wages that were occurring in the former east germany during its transition toward a capitalist economy and changes that are probably occurring in other countries in eastern europe as well under the new capitalist wage regime workers realized significant returns to schooling gained under socialism but no significant returns to work experience because work experience is the largest element in the human capital of older workers their wages fell under the new system and the results suggest that their wages will continue to fall relative to those of younger workers generous transfer payments from western germany may prevent an absolute decline in living standards of these workers older workers in other eastern countries however will have no such social assistance and their living standards will probably fall

towards a gendering of the labour market regulation debate gender equality has become an issue in the labour market regulation debate now that evidence suggests that regulation is not always a barrier to good employment performance recent contributions have focused on its impact in exacerbating within workforce inequalities including gender inequality this article reveals that the evidence supporting this proposition is thin and inconclusive and questions the search for a cross national relationship between regulations and gender this approach leaves out of consideration the differences in institutional interactions in specific national contexts and the differences in the institution of gender across time and space this critique is developed through more detailed and context specific analyses of interactions between gender and six areas of labour market regulation the article concludes by arguing that simply introducing a general gender variable into non gendered analyses of labour markets misleads more than informs and distracts from the development of regulations to promote gender equality copyright the author 2011 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

the 40 year pursuit of equal pay a case of constantly moving goalposts progress towards equal pay is elusive this article reviews debates on and prescribed remedies for gender pay equality over the past 40 years of equal pay policy it looks at pay from four perspectives the economic the sociological the institutional and the organisational and explores how and why once an apparent remedy for unequal pay is pursued the goalposts tend to shift the argument is made that the difficulties in securing long term progress may be attributed to a number of factors including the multifaceted nature of pay as a social phenomenon the challenge of pursuing social objectives in a rapidly changing and fragmenting environment the need for political will not technical solutions to achieve redistribution and the potential for gender inequalities to re emerge in new forms

on the timing and efficiency of creative destruction we analyze the timing pace and efficiency of ongoing job reallocation that results from product and process innovation there are strong reasons why an efficient economy ought to concentrate both job creation and destruction during recessions when the opportunity cost of reallocation is lowest incomplete contracting between labor and capital can disrupt this synchronized pattern and decouple creation and destruction transactional difficulties also lead to technological sclerosis characterized by excessively slow renovation government incentives to production may alleviate high unemployment but exacerbate sclerosis in contrast creation incentives increase the pace of reallocation an optimal combination of both policies restores economic efficiency

australia s gender pay equity legislation how new how different what prospects australia s equal pay laws have recently been renovated through the workplace gender equality act 2012 and the fair work act 2009 in light of these changes it is timely to ask how effective australia s legislative approach is likely to be for progressing pay equity this article presents an analysis of australia s current equal pay provisions assessing their potential on the basis of their operation to date and through recent experience in canada and the uk although focused on outcomes we argue that australia s new workplace based mechanism under the workplace gender equality act may prove relatively ineffective in both diagnosing and remedying pay inequality in comparative perspective the fair work act provisions provide significant capacity to improve pay equity across large sectors of the labour market to date the use of these provisions point to some practical limitations in realising this potential moreover the inadequate legislative and policy integration between labour market sectoral workplace and individual approaches together with a wavering political commitment to equality legislation generally suggest gender pay inequity will remain a persistent feature of australian employment

a model of the natural rate of unemployment since the publication of edmund phelps volume the new macroeconomics has treated the labor market as a dynamic process of rational search by unemployed workers for available vacancies wages are viewed as at least potentially flexible though free contracting between workers and firms may lead to fixed wages in the short run imperfect information is a crucial element of the theory for it implies both a need for contracting and a need for rational search rather than simple market clearing in each period a positive rate of frictional unemployment may exist in equilibrium denoted as the natural rate this unemployment is due to the frictions in the search process and imperfections in information rather than to any deficiency in aggregate demand milton friedman defined the natural rate as the level that would be ground out by the walrasian system of general equilibrium equations provided there is embedded in them the actual structural characteristics of the labor and commodity markets including market imperfections stochastic variability in demands and supplies the cost of gathering information about job vacancies and labor availabilities the costs of mobility and so on p 8 this paper reexamines the micro foundations of the natural rate in a model of labor market equilibrium in which turnover flows and imperfect information are explicitly considered workers may quit their current jobs to enter the unemployment pool in order to search among available vacancies for a more preferred position firms economize on turnover by an appropriate wage policy

careers and motherhood policies for compatibility this paper examines the economic issues relevant to policy debates that surround the increasing labour force participation of mothers we review the main changes in women s labour market participation in britain the main source of increase in women s participation rates has come from mothers returning to work after child birth after progressively shorter intervals the major influences on this behaviour and the length of time spent out of work over the first childbirth and the associated empirical work are also reviewed these changes have raised issues relevant to maternity and parental leave childcare provision employers family friendly working arrangements and children s welfare the paper makes some recommenda tions about how to further gender equity in a form compatible with family life