investment and coordination in oligopolistic industries we examine investment by firms in 24 chemical product industries to determine whether firms invest preemptively to achieve persistent increases in market share or whether there is evidence of behavior to maintain market share the data indicate that investment reduces the probability that rival firms will expand capacity but the effect is temporary large firms tend to maintain market share while smaller firms tend to invest simultaneously with rivals the role of preemptive investment is limited to that of permitting a firm to invest with a lower probability of redundant investment by rivals preemption does not allow a persistent increase in market share but instead acts as a means by which firms may coordinate capacity investment to help avoid episodes of industry overcapacity

the new great debate about unionism and collective bargaining in u s state and local governments recently some state and local governments in the united states have sharply reduced or eliminated public employee unionism and bargaining rights in the belief that their fiscal adversity stems mainly from overcompensation of public employees caused by collective bargaining the authors examine public private sector pay and benefit relationships the effects of unions on public employee pay the effectiveness of employment dispute resolution procedures and the ability of public sector labor and management to combat fiscal adversity they provide new evidence showing that on balance public employees are undercompensated relative to their private sector counterparts the effects of unions on compensation are smaller in the public than in the private sector and public sector dispute resolution procedures and joint labor management initiatives to reform work function reasonably well

collective bargaining in the public sector the effect of legal structure on dispute costs and wages this paper examines the impact of collective bargaining legislation on dispute costs and wages using a panel of canadian public sector contracts the authors results suggest that policymakers designing collective bargaining legislation face a trade off between reducing dispute costs and increasing wages dispute costs are lower under compulsory arbitration than under the right to strike or when no collective bargaining legislation exists hence a switch to compulsory arbitration could potentially make both the union and the employer better off by reducing dispute costs however the authors find that wages are higher under compulsory arbitration than under other legal structures copyright 1991 by american economic association

union effects on municipal employment and wages a longitudinal approach this article examines municipal union employment and wage effects in a sample of police fire sanitation streets and highways and finance and control departments from approximately 900 u s cities during 1977 80 cross section results for 1980 suggest positive union contract effects on fire fighter and sanitation employment and wages consistent with demand shifts due to union political influence in municipal bargaining i then model potential omitted variables as nonstationary fixed effects and apply longitudinal models to estimation of employment and wage changes between 1977 and 1980 the longitudinal results provide little support for the demand shift hypothesis

on the role of demand and strategic uncertainty in capacity investment and disinvestment dynamics abstract even mature industries seldom settle down into a long run steady state fluctuations in demand disrupt the status quo and call for firms to adjust their capacities on an ongoing basis we construct a fully dynamic model of an oligopolistic industry with lumpy capacity and lumpy investment disinvestment decisions in addition to uncertainty about the evolution of demand a firm faces strategic uncertainty concerning the decisions of its rivals we numerically solve the model for its markov perfect equilibria for one set of parameter values three equilibria exist and while all of them have simple intuitive structures they exhibit widely varying patterns of response to demand shocks at one extreme one firm dominates the industry almost as a monopolist and changes its capacity to accommodate demand at the other extreme the larger firm keeps its capacity nearly constant while the smaller firm acts as the swing producer

an analysis of preemptive behavior in the titanium dioxide industry abstract much of the recent theoretical work on oligopoly theory focuses on preemptive capital expansion this paper continues this work by testing whether dupont s behavior in the titanium dioxide industry was consistent with the capital commitment model between 1972 and 1977 this is different from previous empirical papers analyzing preemptive capital expansion because it focuses on strategic behavior in a specific industry and because the hypothesis tests in this paper are based on a formal model of firms optimizing behavior the results lend support to the conclusion that dupont committed capital to preempt the smallest five firms in the industry between 1972 and 1977

the effects of collective bargaining rights on public employee compensation evidence from teachers firefighters and police widespread public sector unionism emerged only in the 1960s as individual states opened the door to collective bargaining for state and municipal workers in this study the author exploits differences in timing of legislative reforms across states to construct estimates of the causal effects of public sector collective bargaining rights on pay benefits and employment for teachers firefighters and police perhaps surprisingly estimates that allow for state fixed effects and state specific trends show little effect on teachers pay benefits or employment despite significantly increasing union presence among teachers for firefighters the results show a substantial positive effect on wages for police the wage effect was more modest but the workweek was significantly shortened

time frequency characterization of the u s financial cycle despite an increase in research motivated by the global financial crisis of 2007 08 empirical studies on the financial cycle are rare compared to those on the business cycle this paper adds some new evidence to this scarce literature by using a different empirical methodology wavelet analysis to extract financial cycles from the data our results confirm that the u s financial cycle is much longer than the business cycle but we do not find strong evidence supporting the view that the financial cycle has lengthened during the great moderation period

who uses interest arbitration the case of british columbia s teachers 1947 1981 several researchers have attempted to identify the circumstances under which parties subject to compulsory interest arbitration will actually push a contract dispute to arbitration in this paper a simple model that incorporates elements of the leading hypotheses is tested using a unique data set spanning 35 years of compulsory conventional arbitration experience among teachers in british columbia the strongest empirical finding is that bargaining units that used arbitration in the previous round of negotiations were at least ten percent more likely than other units to use it in the current round on the other hand variables intended to capture attitudes toward risk changes in the degree of uncertainty associated with arbitral outcomes differing beliefs about likely arbitral outcomes and principal agent problems were found to have little impact on the estimated probability of using arbitration

excess capacity as a barrier to entry an empirical appraisal this paper examines excess capacity barriers to entry and investment dynamics in a sample of thirty eight chemical product industries logit and log linear models of investment behavior are estimated and specific case examples are considered the results show that incumbents rarely built excess capacity pre emptively in an effort to deter entry in general entrants and incumbents exhibited similar investment behavior

how teachers unions affect education production this study helps to explain why measured school inputs appear to have little effect on student outcomes particularly for cohorts educated since 1960 teachers unionization can explain how public schools simultaneously can have more generous inputs and worse student performance using panel data on united states school districts i identify the effect of teachers unionization through differences in the timing of collective bargaining especially timing determined by the passage of state laws that facilitate teachers unionization i find that teachers unions increase school inputs but reduce productivity sufficiently to have a negative overall effect on student performance union effects are magnified where schools have market power

union organizing costs and benefits this paper examines the costs and benefits to current union members in manufacturing of programs to organize the unorganized the marginal cost of organizing an additional employee in constant dollars is estimated for a sample of unions between 1964 and 1977 the primary benefit of organizing that is quantifiable is the extent to which the maintenance or extension of union coverage permits the maintenance of or increase in the union wage estimates of this benefit are derived from previous econometric research linking the union wage to the percentage of the industry organized this single benefit is found to be larger than the estimated marginal cost of extending union coverage in 19 of 20 manufacturing industries

analyzing the time frequency lead lag relationship between oil and agricultural commodities abstract we analyze the time frequency co movement of and lead lag relationship between price indices of oil and 21 agricultural commodities and attempt to identify the leader and follower among the considered price indices for the 1980m1 2017m5 period the empirical analysis is conducted using four wavelet tools wavelet coherency phase difference multiple correlation and multiple cross correlation the first two tools are used to identify the time frequency co movement of and lead lag relationship between price indices of oil and 21 agricultural commodities and the third and fourth tools are used to identify the leader and follower among all series of price indices across different scales our results on wavelet coherency show a high degree of co movement at a long run horizon for the entire period between the price indices of oil and coal cotton fishmeal maize rice rubber and wheat furthermore the connection between these commodity markets and the oil market strengthened after 2000 indicating the importance of financial crisis phenomena and geopolitical turbulence additional findings show that short run investors should invest in the beef and swine pork markets as they have very little correlation with the oil markets the results of multiple correlation and multiple cross correlation analysis show that the coffee price was leader or follower across all time scales except wavelet scale 16 where barely was a leader or a follower

teachers unions and wages in the 1970s unionism now pays this paper provides evidence that confirms the results of previous studies that teacher unionism produced relatively small wage gains during the early 1970s but it also shows that union gains increased substantially in the late 1970s the evidence is based on an application of two complementary research designs cross section wage level regressions and cross section wage change regressions to national samples of teacher data for 1974 75 and 1977 78 the authors conclude that the union nonunion wage differential among teachers reached 12 to 22 percent by the late 1970s and during the period 1974 78 the real wages of unionized teachers increased while those of nonunionized teachers declined they offer several possible explanations for these trends

the time varying correlation between uncertainty output and inflation evidence from a dcc garch model abstract using a new uncertainty index from baker et al 2012 we evaluate the time varying correlation between macroeconomic uncertainty inflation and output estimation results from a multivariate dcc garch model reveal that the sign of the correlation between macroeconomic uncertainty and inflation changed from negative to positive during the late 1990s whereas the correlation between uncertainty and output is consistently negative

directional predictability from oil market uncertainty to sovereign credit spreads of oil exporting countries evidence from rolling windows and crossquantilogram analysis abstract given the recent collapse of oil prices this study investigates the directional predictability from the oil market uncertainty to the sovereign credit default swap cds spreads of four oil exporting gcc countries bahrain qatar saudi arabia and united arab emirates and five other oil exporting countries brazil mexico norway russia and venezuela using the modified bootstrap rolling window approach the empirical results reveal a significant directional predictability from oil uncertainty to the cds spreads of most of those oil exporting countries during the subperiods 2010 2011 and 2014 2015 that is during the periods when oil volatility follows a rising trend the most significant directional predictability is found for qatar bahrain saudi arabia and norway particularly during the 2014 2015 oil price collapse subperiod whereas there is no directional predictability found in the case of brazil for mexico the oil market uncertainty predicts cds spreads mostly during 2014 and for venezuela the directional predictability flows are highly impactful and concentrated during 2011 13 to check the robustness of our estimations we use a novel quantile dependence measure called the cross quantilogram that was developed by han et al 2016 the estimation results of this approach confirm our main findings and indicate that the surge in oil volatility predicts the cds spreads in different quantiles overall the findings highlight that the sovereign credit risk of the gcc and the other oil exporting countries is at least partially driven or directionally predicted by the oil volatility shocks this has important implications for investment and policy decisions

testing for market power using a dynamic oligopoly model abstract we propose a dynamic reformulation of the oligopoly model of bresnahan 1982 and lau 1982 in an error correcting framework this reformulation addresses both statistical problems generated by short run dynamics in the data and incorporates important dynamic factors such as habit formation from the demand side and adjustment costs for the producer we also propose a test for separability of the variables involved in the identification of the market power parameter to illustrate the model the french market for fresh salmon is analysed the results suggest the salmon market to be competitive in the long run but indicate that the largest producer norway has some market power in the short run

the role of news based implied volatility among us financial markets we investigate the role of uncertainty measured by news based implied volatility in anticipating us long term market volatilities from a garch midas model we find that news based implied volatility performs well in predicting long term aggregate market volatilities a subsample analysis provides that the predictive power of news based implied volatility is decreasing

risk shocks and housing supply a quantitative analysis this paper analyzes the role of stochastic uncertainty in a multi sector housing model with financial frictions we include time varying uncertainty i e risk shocks in the technology shocks that affect housing production and provide estimates of the time series properties of risk shocks by using firm level productivity data the analysis demonstrates that risk shocks to the housing production sector are a quantitatively important impulse mechanism for understanding housing price movements specifically the model can match the volatility of housing prices observed in the data it is also demonstrated that adjustment costs are important in replicating the contemporaneous correlation of housing prices with gdp and residential investment critically bankruptcy costs act as an endogenous markup factor in housing prices and are an important determinant of house price volatility however in comparison to housing demand shocks risk shocks have low explanatory power for real quantities

dynamic connectedness of uncertainty across developed economies a time varying approach abstract economic uncertainty has attracted a significant part of the modern research in economics proving to be a significant factor for every economy in this study we focus on the transmission channel of uncertainty between developed economies examining potential spillover effects between the u s the e u the u k japan and canada within a time varying framework our empirical results indicate of a significant spillover of uncertainty from the e u to the u s

capacity dynamics and endogenous asymmetries in firm size empirical evidence suggests that there are substantial and persistent differences in the sizes of firms in most industries we propose a dynamic model of capacity accumulation that is consistent with the observed facts the model highlights the mode of product market competition and the extent of investment reversibility as key determinants of the size distribution of firms in an industry in particular if firms compete in prices and the rate of depreciation is large then the industry moves toward an outcome with one dominant firm and one small firm industry dynamics in this case resemble a preemption race contrary to the usual intuition this preemption race becomes more brutal as investment becomes more reversible

the effect of teachers unions on education production evidence from union election certifications in three midwestern states using a unique data set on teachers union election certifications from iowa indiana and minnesota i estimate the effect of teachers unions on school district resources and on student educational attainment my empirical strategy allows for nonparametric leads and lags of union age i find no impact on teacher pay or per student district expenditures but that unions increase teacher employment by 5 i find no class size effect because of enrollment increases in unionized districts and i estimate that unions have no net effect on high school dropout rates these findings highlight the importance of correctly measuring unionization status

international economic policy uncertainty and stock prices revisited multiple and partial wavelet approach abstract this paper introduces a new dimension to the relationship between economic policy uncertainty epu and stock prices sp by extending the contributions of ko and lee 2015 by using multiple and partial wavelet coherence techniques the vulnerability of sp due to combined and isolated impact of international us epu and domestic policy uncertainty depu is investigated the main findings are a the combined effect of depu and us epu is more significant for developed market s sp b the emerging market s sp are more sensitive to depu and c amongst developed markets japan and european countries are more sensitive to us epu than depu

excess capacity and entry some empirical evidence recent articles by spence i977 dixit i979 and schmalensee i98i have elaborated on wenders i97i1 proposition that excess capacity can act as a barrier to entry the intent of all of these treatments is to suggest that firms may rationally invest in excess capacity with the expectation that excess capacity will be seen by potential entrants either as a signal of aggressive intent or as a credible threat 2 when excess capacity does not lead to creation of a credible threat it may still act as a barrier to entry by shifting the risk return perceptions of potential entrants enough to divert the potential entrants investments into other industries 3 alternatively investment in excess capacity by incumbent firms may reduce the prospects of an active market for the used equipment of a defunct entrant and thereby help to convert fixed costs into sunk costs consequently raising entry barriers 4 this paper represents an exploratory effort to investigate empirically the prevalence and efficiency of excess capacity in deterring entry first a simple and traditional model of entry is presented this is followed by the description of the data used to explore the excess capacity investment concept a combined results and comments section follows the description of the data

compensation for state and local government workers are state and local government workers overcompensated this question has re state and local government workers overcompensated this question has taken on considerable heat in the last year or two as many states and localitaken on considerable heat in the last year or two as many states and localities face budgetary stress in this paper we step back from the highly charged ties face budgetary stress in this paper we step back from the highly charged rhetoric and address this question with the two primary data sources for looking at rhetoric and address this question with the two primary data sources for looking at compensation of state and local government workers the current population survey compensation of state and local government workers the current population survey cps conducted by the bureau of the census for the bureau of labor statistics cps conducted by the bureau of the census for the bureau of labor statistics and the employer costs for employee compensation ecec microdata collected as and the employer costs for employee compensation ecec microdata collected as part of the national compensation survey ncs of the bureau of labor statistics part of the national compensation survey ncs of the bureau of labor statistics the fundamental difference between these two sources of data is that the cps is the fundamental difference between these two sources of data is that the cps is a household survey while the ecec is a survey of employers data from the ncs a household survey while the ecec is a survey of employers data from the ncs have been used in studies of union nonunion interindustry and occupational wage have been used in studies of union nonunion interindustry and occupational wage differentials gittleman and pierce 2007 2011 levenson and zoghi 2011 and in differentials gittleman and pierce 2007 2011 levenson and zoghi 2011 and in studies of compensation inequality pierce 2001 2010 however while ncs publistudies of compensation inequality pierce 2001 2010 however while ncs publications regularly present tabulations separately for the private sector on the one cations regularly present tabulations separately for the private sector on the one hand and state and local government on the other the microdata from the ncs hand and state and local government on the other the microdata from the ncs have not been previously used to compare compensation in the private sector to that have not been previously used to compare compensation in the private sector to that in the state and local government sectors in the state and local government sectors we begin by presenting some tabulations on pay differences across sectors we begin by presenting some tabulations on pay differences across sectors from these two data series both raw pay differences between public and private from these two data series both raw pay differences between public and private sectors and also some breakdowns by education level of workers for the current sectors and also some breakdowns by education level of workers for the current population survey and skill level of the job for the employer costs for employee population survey and skill level of the job for the employer costs for employee

match bias from earnings imputation in the current population survey the case of imperfect matching this article examines match bias arising from earnings imputation wage equation parameters are estimated from mixed samples of workers reporting and not reporting earnings the latter assigned earnings of donors regressions including attributes not used as imputation match criteria e g union are severely biased match bias also arises with attributes used as match criteria but matched imperfectly imperfect matching on schooling age flattens earnings profiles within education age groups and creates jumps across groups assuming conditional missing at random a general analytic expression correcting match bias is derived and compared to alternatives reweighting a respondent only sample proves an attractive approach

the international transmission of volatility shocks an empirical analysis this paper proposes an empirical model which can be used to estimate the international transmission of volatility shocks using this model we estimate that a one standard deviation increase in the volatility of the shock to us real gdp leads to a decline in uk gdp of 1 relative to trend and a 0 7 increase in uk cpi relative to trend at the two year horizon using a nonlinear open economy dsge model we find that these empirical estimates are consistent with the response to a perturbation to the volatility of foreign supply type shocks while an increase in the volatility of demand shocks has a negligible impact

bargaining laws as a cause and consequence of the growth of teacher unionism this study analyzes state level data for 1959 78 to determine whether the rapid growth of teacher unionism during those years was primarily a result or a cause of the public sector bargaining laws adopted during the same period the author finds contrary to the view of some scholars that the enactment of laws requiring public sector employers to bargain with majority representatives of their employees was the single most important cause of the growth in the proportion of teachers covered by union contracts although the growth in teacher unionism in turn encouraged the adoption of some new or stronger bargaining laws this effect was relatively weak more important predictors of new bargaining laws included the extent of political patronage in a state and the bargaining laws adopted by neighboring states

economic policy uncertainty shocks and stock bond correlations evidence from the us market abstract this paper examines the effects of economic policy uncertainty shocks on stock bond correlations for the us market we devise a general framework which distinguishes a positive shock from a negative one and nests either as its special case the results show that innovations in the policy uncertainty index impact negatively and asymmetrically on the subsequent stock bond correlations which are characterized by a structural break and positive type asymmetry

on the different approaches of measuring uncertainty shocks as uncertainty has become an increasingly prominent source of business cycle fluctuations various uncertainty proxies have been proposed in the literature this paper shows that uncertainty measures based on realized variables fluctuate more than the measures that are based on forecasts more precisely the variation in the realized cross sectional standard deviation of profit growth and stock returns is larger than the variation in the forecast standard deviation moreover the forecast standard deviation of profit growth and stock returns are negatively or uncorrelated the uncertainty measures increase stock returns due to a risk premium but they decrease profit growth

dynamic co movements of stock market returns implied volatility and policy uncertainty we examine time varying correlations among stock market returns implied volatility and policy uncertainty our findings suggest that correlations are indeed time varying and sensitive to oil demand shocks and us recessions

collective bargaining laws threat effects and the determination of police compensation this article demonstrates that state collective bargaining laws are important determinants of union and nonunion public employee compensation state laws that provide stronger bargaining rights and ensure closure to the bargaining process increase the direct effect of police unions on compensation moreover indirect threat effects on the pay of nonunion police also increase with stronger bargaining laws in each law category investigated nonunion police receive most of the compensation premium enjoyed by unionized police previous studies that have not adequately controlled for these effects of bargaining laws have therefore underestimated the full effect of public sector unions on compensation

excess capacity as a barrier to entry in the us titanium industry abstract the purpose of this paper is to construct and empirically test a model designed to determine the impact if any of expected excess capacity on the probability of entry the analysis is conducted within the context of a single oligopoly specifically the us titanium metal industry using time series data an empirical model is developed and estimated in order to determine expected values of the components of excess capacity capacity and production by disentangling the components of excess capacity and estimating them separately it is possible to separate any incumbent actions that may preempt entry from the effects of underlying cycles in demand and production these predicted values are utilized in a logit model generating results which indicate that expected levels of capacity expansion appear to diminish the probability of firm entry into the titanium industry

cross country determinants of economic policy uncertainty spillovers this study explores the determinants of cross country economic policy uncertainty epu spillovers we find that bilateral factors such as trade and common language play a highly significant role i

public sector unions and municipal employment using 1980 data for a large sample of u s cities the author reexamines recent empirical findings of a positive association between public sector unionization and municipal employment several researchers have interpreted this correlation as evidence that public employee unions successfully exert political pressure to raise the demand for municipal services structural estimates of labor demand and the determinants of police and fire unionization reveal however that economies of scale in union formation are at least partly responsible for any positive association between public sector unionization and municipal employment the author concludes that previous studies overstate the amount of political clout wielded by municipal labor unions

bargaining laws and unionization in the local public sector this paper analyzes the effects of bargaining law characteristics on rates of unionization in over 10 000 local government departments representing five different government services that were without bargaining units in 1977 duty to bargain laws significantly increased the probability of bargaining union formation between 1977 and 1982 the results of the analysis reject the hypotheses that this effect reflects only underlying union strength the release of pent up demand for unionization or the transformation of nonbargaining unions into bargaining unions the changes in unionization attributable to duty to bargain laws are so large that they account for nearly all of the differences in average unionization rates between states with and without these laws

time frequency causality and connectedness between international prices of energy food industry agriculture and metals abstract this study analyzes the lead lag relationship between the price indices of energy fuels and each of food industrial inputs agriculture raw materials metals and beverages in the time frequency domain to this end we first use the wavelet coherency and phase differences next we use the diebold and yilmaz 2012 and barunik and krehlik 2017 spillover indices to analyse the connectedness among the set of the price indices under consideration the period of the study is 1990m1 to 2017m5 the wavelet coherency results reveal that there are important and significant relations between the fuel and food prices the fuel and industrial prices and the fuel and metal prices these results also show that there are phase relationships between those paired prices the volatility spillover results indicate that the agricultural sector is the most affected by shocks from the other markets the return series of the industrial input prices at all frequencies appears to be the main source of volatility transmission to the prices of the other commodities over the whole period this finding underlines the relevance of the industrial inputs to policy makers particularly when they design policies to provide incentives related to industrial production

the effect of unions on wage inequality in the u s labor market this study uses current population survey micro data for 1973 74 and 1993 to evaluate the effect of changing union membership on trends in male and female wage inequality unionization rates of men fell between the two sample periods with bigger declines among lower skill groups these trends account for 15 20 of the rise in male wage inequality union membership rates of low wage women also declined while unionization increased among higher wage women on balance shifting unionization accounts for very little of the rise in female wage inequality economy wide trends in unionization mask a sharp divergence between the private sector where unionism was declining and the public sector where it was rising comparisons across sectors suggest that unionization substantially slowed the growth in wage inequality in the public sector

investment flexibility as a barrier to entry abstract this paper presents a model of investment in a duopoly with firms that choose the scale and timing of investment decision making flexibility and the costs saved by investing in large steps rather than sequences of small steps determine an incumbent s ability to deter entry by a potential competitor entry occurs when these cost savings are very small or very large because the effect of increased industry capacity on the incumbent s assets in place is the same regardless of which firm invests in intermediate cases the incumbent is able to deter entry by making a smaller earlier investment than the potential entrant the smaller investment scale protects the incumbent s assets in place which offsets the incumbent s cost disadvantage from investing in smaller steps than the entrant would choose nevertheless the threat of entry constrains the incumbent s investment behavior and limits its profitability the model is solved using a combination of best response iteration and the projected successive over relaxation method

public sector earnings and the extent of unionization many studies have examined the influence of union density union members as a percentage of all workers on earnings in the private sector but few such studies have looked at the public sector using data from the 1991 current population survey this study estimates the determinants of earnings for state and local government employees in both the union and nonunion sectors the extent of public sector unionization appears to be positively correlated with earnings for both state and local government workers and for those covered and not covered by collective agreements although the effect for non covered employees is smaller than that for covered employees both effects are larger than those typically found in similar estimates for the private sector the authors also find that bargaining structure has some influence on earnings with the most consistent effect being a positive influence of arbitration on the earnings of local government workers

wage effects of increased union coverage methodological considerations and new evidence although many studies show a positive relationship between extent of unionization and union members wages some analysts suggest that this relationship could reflect a concentration of labor organization in industries with potentially high wage gains rather than unions efficacy in raising wages consistent with that speculation studies across occupations or geographic areas generally show a much weaker relationship between unionization and wages than do studies across industries the authors of this study argue however that the weakness of the relationship found in some empirical research is due to the use of data sets mixing local market industries characterized by local bargaining with national market industries characterized by national bargaining an empirical analysis supports this hypothesis wages are positively correlated with the extent of unionization in a local market industry supermarkets but not in a national market industry aerospace

does economic policy uncertainty in the u s influence stock markets in china and india time frequency evidence this paper uses continuous and discrete wavelet tools to evaluate the dynamic correlation and causality between the u s economic policy uncertainty epu and stock markets in china and india from

economic policy uncertainty in the us does it matter for the euro area abstract we investigate the effects of a us economic policy uncertainty shock on some euro area macroeconomic aggregates via structural vars we model the indicators of economic policy uncertainty recently developed by baker et al 2013 jointly with the aggregate price indexes and alternative indicators of the business cycle for the two above indicated economic areas according to our svars a one standard deviation shock to us economic policy uncertainty leads to a statistically significant fall in the european industrial production and prices of 0 12 and 0 06 respectively the contribution of the us uncertainty shock on the european aggregates is shown to be quantitatively larger than the one exerted by an euro area specific uncertainty shock

predation reputation and entry deterrence abstract economists often argue that predatory practices are irrational since there exist cheaper or more certain means to gain or maintain a monopoly our gametheoretic equilibrium analysis suggests that if a firm is threatened by several potential entrants then predation may be rational against early entrants even if it is costly when viewed in isolation because it yields a reputation which deters other entrants asymmetric information plays a crucial role in our analysis since it provides the rationale for entrants to base their expectations of the firm s future behavior on its past actions the analysis also suggests methods to treat general reputational phenomena

measuring financial asset return and volatility spillovers with application to global equity markets we provide a simple and intuitive measure of interdependence of asset returns and or volatilities in particular we formulate and examine precise and separate measures of return spillovers and volatility spillovers our framework facilitates study of both non crisis and crisis episodes including trends and bursts in spillovers and both turn out to be empirically important in particular in an analysis of sixteen global equity markets from the early 1990s to the present we find striking evidence of divergent behavior in the dynamics of return spillovers vs volatility spillovers return spillovers display a gently increasing trend but no bursts whereas volatility spillovers display no trend but clear bursts

lumpy capacity investment and disinvestment dynamics capacity addition and withdrawal decisions are among the most important strategic decisions made by firms in oligopolistic industries in this paper we develop and analyze a fully dynamic model of an oligopolistic industry with lumpy capacity and lumpy investment disinvestment we use our model to suggest answers to two questions first what economic factors facilitate preemption races second what economic factors facilitate capacity coordination with a series of examples we show that low product differentiation low investment sunkness and high depreciation tend to promote preemption races the same examples also show that low product differentiation and low investment sunkness tend to promote capacity coordination although depreciation removes capacity it might impede capacity coordination finally our examples show that multiple equilibria arise over at least some range of parameter values the distinct structures of these equilibria suggest that firms expectations play a key role in determining whether or not industry dynamics are characterized by preemption races and capacity coordination taken together our results suggest that preemption races and excess capacity in the short run often go hand in hand with capacity coordination in the long run

reorganization of firms and labor market inequality much of the history of economic enterprise has involved reaping the benefits from specialization of labor by dividing increasingly fragemented tasks among different employees as vividly described already by adam smith in his wealth of nations this development was greatly facilitated through the rise of tayloristic organizations where standardized inputs are processed to yield standardized outputs and where different functional tasks e g administration production marketing design are performed in different departments coordinated through a hierarchy of managers these organizations common in both the manufacturing and service sectors testified to the importance of specialization of work in production as well as organization this pervasive organizational structure is now in retreat charlie chaplin at the conveyor belt in the movie modern times is no longer the prototype worker with hindsight the wave of change began well over a decade ago it has accelerated in recent years and may be expected to gather even more pace over the next decade the organization of many firms in both the manufacturing and service sectors is being progressively restructured this process calls into question the need for extreme specialization by skill specific occupation creates demands for new combinations of skills and thereby leads to new patterns of wage inequality the restructuring process is characterized by a number of complementary features first the organizational structure of firms is becoming flatter the new structure is built around teams that report to the central management with few if any intermediaries second production processes are being transformed the application of computer technology flexible tools and programmable multi task equipment reduces returns to scale and permits greater production flexibility third the flow of information within firms has been revolutionized the introduction of computerized data systems permits more individualilzed treatment of employess and customers facilitates the decentralization of decision making and enables employees to perform multiple tasks and exploit complementarities among them fourth firms offer broader product lines in smaller quantities responding more readily to customers requirements customer participation in product design is growing and there is greater emphasis on product quality and ancillary services and fifth the nature of work is changing occupational boundaries are breaking down as workers engage in multi tasking and work rotation these various aspects distinguish the traditional tayloristic organizations from what we shall call holistic organizations recent technological advances and improvements in physical and human capital have undoubtedly played a central role in driving the process whereby tayloristic organizations restructure into holistic ones the increasing use of computers to transmit information within firms and the rising versatility and programmability of equipment have increased the complementarities across tasks e g production marketing customer service product design that a given employee can exploit furthermore the growing amounts of all round knowledge that has been disseminated through the education systems over the past few decades has made young people increasingly capable of performing multiple tasks this accumulation of human capital has also changed people s preferences away from the monotonous single purpose tayloristic jobs to the frequently more varied and stimulating holistic ones in what follows we examine the consequences of these developments for the reorganization of work the move towards multi tasking and the consequent break down of occupational barriers the transformation of job opportunities and the implications for inequality in the labor market

on the cyclicity of regional house prices new evidence for u s metropolitan statistical areas abstract this paper is mainly concerned with the analysis of regional house price cycles we introduce a wavelet transform based metric to study the housing cycle synchronization across the largest u s msas with a focus on the recent housing bubble we derive several conclusions i we show that regional housing cycle dissimilarities are significantly and strongly connected to geography ii after the burst of the recent housing bubble there was greater significant co movement in shorter cycles for a short period of time iii coastal regions which have a higher house price volatility compared to other msas are also those with a higher degree of house supply regulation iv a mortgage rate reduction decrease the dissimilarity between the msas and the national housing cycle before the end of 2006 at higher frequencies hence monetary policy is partially effective whereas effectiveness depends on time frequency and the considered msa

fluctuations in uncertainty this review article tries to answer four questions i what are the stylized facts about uncertainty over time ii why does uncertainty vary iii do fluctuations in uncertainty matter and iv did higher uncertainty worsen the great recession of 2007 2009 on the first question both macro and micro uncertainty appears to rise sharply in recessions on the second question the types of exogenous shocks like wars financial panics and oil price jumps that cause recessions appear to directly increase uncertainty and uncertainty also appears to endogenously rise further during recessions on the third question the evidence suggests uncertainty is damaging for short run investment and hiring but there is some evidence it may stimulate longer run innovation finally in terms of the great recession the large jump in uncertainty in 2008 potentially accounted for about one third of the drop in gdp

excess capacity and limit pricing an empirical test entry may be inhibited by expectations that incumbents have lower marginal costs incumbents may be able to use limit pricing or excess capacity to further this expectation we construct an empirical model of oligopoly capacity and pricing decisions and of entrant responses the results support the hypothesis that both lower prices and greater excess capacity inhibit entry they further support limit pricing but provide no evidence that oligopolies deliberately install excess capacity to deter entry the results suggest however that limit pricing firms may exploit the entry inhibiting effects of unintended excess capacity by raising their limit prices

holding idle capacity to deter entry in this journal dixit i980 carefully analysed the extent to which an established firm facing a prospective entrant might make an investment in capacity beyond that which is optimal for its pre entry output in his model both the established firm and prospective entrants understand that a quantity setting nash equilibrium would be established in any post entry game dixit showed that spence i977 had studied an imperfect equilibrium that is an equilibrium that depended upon a threat that was not credible to obtain his result that firms might hold excess capacity to deter entry in a perfect equilibrium a firm would not wish to install capacity that would be left idle if entry did not occur dixit s conclusion however depends on his assumption that each firm s marginal revenue is always decreasing in the other s output this is quite a restrictive assumption for example it is never satisfied in the relevant range for economists second favourite demand curve constant elasticity demand the basic point is unchanged if the firms anticipate price competition with differentiated products rather thanquantity competition in any post entry game under quite plausible conditions rational firms facing rational potential entrants may install capacity that will certainly be left idle we are thus able to rehabilitate spence s original proposition in a perfect equilibrium setting

nominal and real union wage differentials and the effects of industry and smsa density 1973 83 many studies have examined the influence of union density union members as a percentage of all workers on earnings in the private sector but few such studies have looked at the public sector using data from the 1991 current population survey this

on the transmission mechanism of country specific and international economic uncertainty spillovers evidence from a tvp var connectedness decomposition approach abstract we investigate the internal and external categorical economic policy uncertainty epu spillovers between the us and japan using a novel extension of the tvp var connectedness approach of antonakakis and gabauer 2017 the decomposition of our approach gives us insights about the dynamics with and without international spillovers which has essential policy implications our results suggest that monetary policy uncertainty is the main driver followed by uncertainties associated with fiscal currency market and trade policies furthermore we find that the fukushima daiichi accident can be interpreted as a negative trade shock that spread internationally

state collective bargaining laws and public sector pay using the public use microdata sample from the 2005 to 2015 american community survey the authors provide new evidence on how state collective bargaining laws affect public sector wages to isolat

public employee pensions and the local labor budget abstract this paper examines the causes and consequences of public employee pension funding by local governments the pension funding decision is analyzed within the context of two models one where current taxpayers stay and pay employees future retirement benefits and a second model where current taxpayers move and thereby hope to avoid paying future retirement benefits the empirical results test the alternative models for a sample of 60 large u s cities using data for local police and fire services the effects of underfunding on local wages and employment is then examined and found to be significant implications for national pension funding policy are drawn

measuring the effect of arbitration on wage levels the case of police officers the authors empirically evaluate how the provision of an arbitration statute affects police officers wages by comparing wage levels across political jurisdictions and over time using a sample of states two complementary data sources are used panel data for the years 1961 92 on state level wages of police officers and individual level data on police officers from the 1970 1980 and 1990 decennial censuses the empirical results from both data sets are remarkably consistent and provide no robust evidence that the presence of arbitration statutes systematically affected overall wage levels on average the effect of arbitration was approximately zero although the authors find substantial heterogeneity in the estimated effects across states

international economic policy uncertainty and stock prices wavelet approach this paper examines the link between economic policy uncertainty and stock price in both a time and frequency domain wavelet analysis reveals that the relationship is generally negative but changes over time exhibiting low to high frequency cycles moreover the timing of frequency changes overlaps when us policy uncertainty comoves with other countries policy uncertainty

match bias in wage gap estimates due to earnings imputation about 30 of workers in the current population survey have earnings imputed wage gap estimates are biased toward zero when the attribute being studied e g union status is not a criterion used to match donors to nonrespondents an expression for match bias is derived in which attenuation equals the sum of match error rates attenuation can be approximated by the proportion with imputed earnings union wage gap estimates with match bias removed are presented for 1973 2001 estimates for recent years are biased downward 5 percentage points bias in gap estimates accompanying other non match criteria public sector industry etc is examined

is there a role for uncertainty in forecasting output growth in oecd countries evidence from a time varying parameter panel vector autoregressive model this paper uses a time varying parameter panel vector autoregressive tvp pvar model to analyze the role played by domestic and us news based measures of uncertainty in forecasting the growth of industrial production of 12 organisation for economic co operation and development oecd countries based on a monthly out of sample period of 2009 06 to 2017 05 given an in sample of 2003 03 to 2009 05 there are only 46 of cases where domestic uncertainty can improve the forecast of output growth relative to a baseline monetary tvp pvar model which includes inflation interest rate and nominal exchange rate growth besides output growth moreover including us uncertainty does not necessarily improve the forecasting performance of output growth from the tvp pvar model which includes only the domestic uncertainty along with the baseline variables so in general while uncertainty is important in predicting the future path of output growth in the 12 advanced economies considered a forecaster can do better in majority of the instances by just considering the information from standard macroeconomic variables

international spillovers of policy uncertainty using the baker et al 2013 index of policy uncertainty for six developed countries this paper estimates spillovers of policy uncertainty we find that spillovers account for slightly more than one fourth of the dynamics of policy uncertainty in these countries with this share rising to one half during the financial crisis the us and uk are responsible for a large fraction of the spillovers since the financial crisis while the remaining countries are all net receivers of policy uncertainty shocks during and after this period

on international uncertainty links bart based empirical evidence for canada we use the indexes of economic policy uncertainty epu developed by baker et al 2015 for canada and seven china france germany japan russia united kingdom and united states other countries to study international uncertainty links by means of a bayesian additive regression trees bart algorithm using partial dependence plots relative importance measures and permutation tests we shed light on how epu in canada is linked to epu in seven other countries

collective bargaining in the public sector comment in a recent paper janet currie and sheena mcconnell 1991 hereafter cm provide evidence from the canadian public sector suggesting that requiring binding wage arbitration as opposed to granting the right to strike reduces dispute costs but increases wage costs disputes are defined as either an arbitration or a strike this leads them to conclude that compulsory arbitration pareto dominates other forms of legal structure both parties could potentially be made better off from the reduction in dispute costs associated with compulsory arbitration and those responsible for designing collective bargaining legislation face a trade off between reducing dispute costs and changing the division of the rent p 714 they base these important policy conclusions on their empirical evidence on the following relationships