international and historical dimensions of the financial crisis of 2007 and 2008 abstract this article provides an interpretative overview of the papers in this special issue of jimf devoted to international aspects of the 2007 2009 financial crisis it then goes on to provide additional empirical evidence of two sorts the first documents the difference between the monetary policies pursued by the european central bank the bank of japan the bank of england and the federal reserve in this episode and the policies pursued by the federal reserve in the great depression in the course of this episode unlike the great depression policies were not contractionary and the recessions were less severe than in the united states in 1929 1933 the second compares the recovery in the united states in the aftermath of the recent crisis and in recoveries following periods of previous banking crises this recovery is much weaker than average

trends in the development of ecological economics from the late 1980s to the early 2000s abstract as the contributions to ecological economics are very diverse recent years have seen some discussion on both how to delimit the field and in which direction it should develop the intention with this paper is to contribute to the discussion by outlining important trends in the development of the field from the late 1980s to the early 2000s the study is inspired by other studies in the sociology and history of science in particular by the theoretical framework regarding scientific fields as reputational organizations which draws attention to both cognitive and social aspects of the formation of a field the basis for the paper is a combination of literature studies interviews with key researchers in the field and participant observations the paper outlines the characteristic cognitive features of ecological economics at the time of the birth of the field it is then described how the development in ecological economics was influenced by broader social factors during the following years and how the field was shaped by the inflow and outflow of different groups of researchers the emergence of different research programmes is outlined as is the organizational development finally the characteristics of ecological economics are summarized and the future prospects are briefly assessed

estimating wage discrimination in the labor market if labor supply curves are not perfectly inelastic wage discrimination induces some minority workers to leave the labor force studies of discrimination that focus only on wage differentials overlook these disincentive effects on minority employment

the financial crisis of 2008 in fixed income markets we explore how a relatively small amount of heterogeneous securities created turmoil in financial markets in much of the world in 2007 and 2008 the drivers of the financial turmoil and the financial crisis of 2008 were heterogeneous securities that were hard to value these securities created concerns about counterparty risk and ultimately created substantial uncertainty the problems spread in ways that were hard to see in advance the run on prime money market funds in september 2008 and the effects on commercial paper were an important aspect of the crisis itself and are discussed in some detail

asset pledgeability and endogenously leveraged bubbles abstract we develop a simple model of defaultable debt and rational bubbles in the price of an asset which can be pledged as collateral in a competitive credit pool when the asset pledgeability is low the down payment is high and bubble investment is unleveraged as in a standard rational bubble model when the pledgeability is high the down payment is low making it easier for leveraged borrowers to invest in the bubbly asset as loans are packaged together into a competitive pool the pricing of individual default risk may facilitate risk taking in equilibrium credit constrained borrowers may optimally choose a risky leveraged investment strategy borrow to invest in the bubbly asset and default if the bubble bursts the model predicts joint boom bust cycles in asset prices and securitized credit

the trend in the male female wage gap in the united states despite the rise in the feminist movement the enactment of equal opportunity legislation and the rapid increase in women s labor force participation a substantial sex differential in wages has persisted in the united states for at least 4 decades measured by hourly earnings of year round workers this wage gap was 31 in 1955 widened to a 35 37 range by the 1960s and early 1970s and then narrowed to 33 by 1982 this paper examines the extent to which changes in the characteristics of men and women in the labor force and other factors can account for the observed pattern the main finding is that increases in women s labor force participation were initially associated with a declining skill level of employed women relative to employed men where skill is measured by years of schooling and job tenure more recently the work experience of employed women has been increasing which helps account for the recent narrowing trend in the wage gap during the 1970s the wage gap probably woul have narrowed m

pension benefits and male female wage differentials female members of defined benefit pension plans will receive greater pension benefits than males with identical work and earnings histories since females have greater longevity yet females have higher turnover rates and lower earnings both of which serve to reduce pension benefits relative to those received by males we illustrate the net effect on pension benefits in defined benefit plans of gender differences in longevity turnover and wages we conclude that females tend to receive lower pension benefits and therefore that pension benefits are more likely to exacerbate than to reduce the male female wage gap

are male female earnings differentials related to life expectancy caused pension cost differences this paper argues that employers using defined benefit pension plans are forced by competitive conditions to lower females earnings to account for more costly pension liabilities resulting from longer life expectancy a newly constructed data set containing employee salary histories and pension plan descriptions from five firms is used to calculate how much more it costs to employ a female vs a male worker identical except for life expectancy it is demonstrated that each dollar of increased pension liabilities results in a reduction in females salaries by fifty five cents implications of these findings for the 1983 supreme court ruling involving sex linked pension benefits are discussed

trends in earnings differentials by gender 1971 1981 this paper clarifies trends in relative earnings by sex over the decade 1971 1981 and decomposes these trends to determine which factors contributed to a decline and which to an increase our analyses are based upon data from the annual demographic files of the current population survey for 1972 and 1982 this study is unique in that it estimates earnings functions in each year which are corrected for selectivity bias it is found that such a correction markedly raises the progress of white women relative to men among blacks the impact of the selectivity bias correction was to substantially lower the relative earnings increase of women however the coefficients on the selectivity variable were not significant the findings suggest declining sex role specialization and discrimination as conventionally measured over the decade on the other hand contrary to expectations the total effect of variables reflecting the sex composition of the individuals occupation worked to widen the sex differential over the period the sex differential was also adversely affected by a decline in the relative return to education especially for whites authors modified

what are corporate pension liabilities analyses of corporate pension plans often make unstated assumptions about an implicit labor contract an example of the effect of such an assumption is that many mistakenly believe that if a worker s benefits are tied to final salary he is protected against inflation until retirement also the value of a worker s claims is often considered to be independent of the status of the firm s pension fund these implicit contract assumptions are examined and questioned the implications of analyzed pension liabilities in a manner consistent with the analysis of other corporate liabilities are explored

is the 2007 u s sub prime financial crisis so different an international historical comparison the first major financial crisis of the twentyfirst century involves esoteric instruments unaware regulators and skittish investors it also follows a well trodden path laid down by centuries of financial folly is the special prob lem of sub prime mortgages really different our examination of the longer historical record which is part of a larger effort on cur rency and debt crises finds stunning qualitative and quantitative parallels across a number of standard financial crisis indicators to name a few the run up in us equity and housing prices that graciela l kaminsky and reinhart 1999 find to be the best leading indicators of crisis in countries experiencing large capital inflows closely tracks the average of the previous 18 post world war ii banking crises in industrial countries so too does the inverted v shape of real growth in the years prior to the crisis despite widespread concern about the effects on national debt of the tax cuts of the early 2000s the run up in us public debt is actually some what below the average of other crisis episodes in contrast the pattern of us current account deficits is markedly worse at this juncture the book is still open on how the current dislocations in the united states will play out the precedent found in the aftermath of other episodes suggests that the strains can be quite severe depending especially on the initial degree of trauma to the financial system and to some extent the policy response the average drop in real per capita output growth is over 2 percent and it typically takes two years to return to trend for the five most catastrophic cases which include episodes in finland japan

the u s and irish credit crises their distinctive differences and common features although the 2007 2008 us credit crisis precipitated it the subsequent irish credit crisis is an identifiably separate one which might have occurred in the absence of the u s crash the distinctive differences between them are notable many of the apparent causal factors of the u s crisis are missing in the irish case and the same applies vice versa at a deeper level we identify four common features of the two credit crises capital bonanzas asset price bubbles regulatory imprudence and moral hazard the particular manifestations of these four deep common features are quite different in the two cases

the gender gap in pensions and wages this study provides rationale for the underrepresentation of women in the pension sector and examines the consequences for the gender wage gap for a given set of observed characteristics a woman is 11 19 percent less likely than a man to have a pension of the unexplained portion of the gender wage gap 10 38 percent is due to unexplained differences in pension coverage finally consistent with a screening effect of pensions women are paid more equally in the pension sector copyright 1990 by mit press

the effect of britain s anti discriminatory legislation on relative pay and employment pressive increase in the number of women in the labour force during the i970s between i970 and i980 female relative employment increased by i8 3 and female relative hours by i 7 6 in this paper we attempt an evaluation of the possible effects of anti discriminatory legislation by considering the labour market as a whole taking into account not only relative employment but also other factors that through their influence on demand and supply may have affected relative pay the prima facie evidence in favour of the effectiveness of this legislation is very strong and we want to see if this evidence is maintained after considering all these additional factors and their interaction within the context of the labour market in the first section we present the main facts under analysis the analytical framework to consider the joint effect of the legislation on pay and employment and the

comparable worth limited coverage and the exacerbation of inequality citing relevant judicial decisions the author argues that any application of the comparable worth remedy for gender discrimination is likely to cover only certain groups of workers most likely to be covered are women who work for governmental or large private employers in female dominated jobs and least likely to be covered are women who work for small private employers the implementation of comparable worth would cause the wages of noncovered workers to fall relative to those of covered workers and they might even fall absolutely an analysis of 1979 current population survey data suggests that the women most likely to gain from comparable worth are fewer in number better paid and subjected to no greater discrimination than the women most likely to lose

employee evaluation of pension claims and the impact of indexing initiatives there is discussion in both canada and the united states of proposals which require private pension plans to provide indexed pension benefits this paper employs both an auction and an implicit contract model to identify the compensating wage differentials required of possible policy initiatives the contract model motivated by the prevalence especially in canada of ad hoc cost of living adjustments to pensions in pay presumes that workers have a call option on the investment earnings in excess of the interest rate assumption used to value the plan the analysis indicates that wage offsets are potentially quite large may be difficult to predict and may vary substantially across firms in addition the case for policy action would appear to rest largely on the implicit assumption that workers misperceive the value of their pension benefits

retirement incentives contained in occupational pension plans and their implications for the mandatory retirement debate we find for the most prevalent type of pension plan in canada that plan provisions are not a close substitute for mandatory retirement special retirement pro visions which have a strong potential to discourage work typically do not come into play before age sixty and are far from universal the postponed retirement provision that has the greatest potential to discourage work beyond age sixty five has been deemed an unacceptable substitute for mandatory retirement in those jurisdic tions quebec manitoba government of canada which have banned mandatory retirement

credit booms and lending standards evidence from the subprime mortgage market this paper links the u s subprime mortgage crisis to demand side factors that contributed to the rapid expansion of the u s mortgage market we show that denial rates were relatively lower in areas that experienced faster credit demand growth and that lenders in these high growth areas attached less weight to applicants loan to income ratios the results are robust to controlling for supply side factors including house price appreciation mortgage securitization and other economic fundamentals and to several robustness tests controlling for endogeneity the results are consistent with the notion that a relaxation of lending standards triggered by an increased demand for loans contributed to the boom and the ensuing crisis together with other supply side explanations these findings shed new light on the relationship between credit booms and financial instability

did the recent housing boom signal the global financial crisis author affiliation david m kemme dmkemme memphis edusaktinil roy saktinil athabascau ca1 introductionshiller 2005 pp xiii iv argued that the rapid surges of real home prices in the united states and other countries in the late 1990s and early 2000s signaled the potential for widespread personal and institutional bankruptcies and a worldwide recession probably as deep and lasting as japan s lost decade 1 of course as we know today this was one of few highly accurate predictions of events that unfolded after the u s subprime market collapse of 2007 2008 2 given the prevailing regulatory conditions and implied financial liberalization the housing boom was a bubble phenomenon driven primarily by the over optimism of a new era in which home prices would only rise historically financial booms around the world which were similarly associated with wishful thinking of unending future increases in asset prices also imploded and led to recession in similar ways indeed thorough observation of these historical episodes and of the contemporary sudden changes in the housing markets was the basis of shiller s 2005 pp xiii iv chapters 2 7 prescience regarding the potential magnitude and impact of the current turmoil nevertheless the emerging literature on the current episode has not yet provided an empirical framework with which to confirm these observations and prescience could the insights that followed from historical and contemporary evidence but that were not so obvious to most researchers policy makers and market participants be produced with appropriate data and standard statistical procedures specifically following shiller s 2005 pp xiii iv chapters 2 7 observations and insights shouldn t the rapid rise since 1998 of real house prices alone provide enough information to foretell the current state of the housing and banking sectors and the implications for the whole economy this article employs standard statistical models and examines this simple proposition we follow a two step procedure answering two different but related questions first we provide a statistical confirmation of the observation made by shiller 2005 chapter 2 2008 chapter 2 that the drastic increase in real house prices in the united states since 1998 was mainly unexplained by changes in economic fundamentals such as income population building costs and long term interest rates we find that although these fundamentals largely explain real house prices in the united states over the period from 1950 through 1997 our out of sample forecasts indicate that the same fundamentals fail to account for a sudden large rise of real house prices during 1998 2005 next in line with shiller s observation 2005 chapter 7 that similar historical financial booms imploded in similar ways we examine the predictability of the recent global crisis based on historical house price data associated with other post war bank centered crisis episodes we fit panel probit and logit models to a cross country panel of data for real house prices for advanced economies that experienced banking crises in the post war period and conclude that a housing boom is a good predictor of financial crisis we then ask if the recent global crisis specifically the systemic banking crises in the united states britain ireland and spain which also had prior housing bubbles can be predicted out of sample the finding is that this is indeed possible credible alarms can be generated for the banking crises of all four countries three years in advance in section 2 we present shiller s 2005 chapter 2 argument for an unsustainable housing boom in the united states during 1998 2005 and substantiate it statistically in section 3 we investigate the observation by shiller 2005 chapter 7 inter alia that prior speculative bubbles are quite common to financial crises around the world so that the housing booms in the united states and other countries in the early 2000s signaled a global recession

de growth and welfare in an equilibrium model with heterogeneous consumers this paper studies equilibrium growth and voluntary degrowth allowing for heterogeneous and time varying preferences the approach is based on applying a dynamic equilibrium model with externalities in production consumption and leisure preference heterogeneity regarding status competition is modeled by asymmetric consumption externality parameters whereas heterogeneity regarding voluntary simplicity is incorporated by allowing for agent specific restrictions on maximum consumption equilibrium is studied in terms of a balanced growth path bgp numerical examples suggest that degrowth triggered by voluntary simplicity by a subset of consumers less affected by status competition has a positive effect on the aggregate welfare under externalities in consumption and leisure a reduction in status competition increases the aggregate welfare and reduces the equilibrium growth rate simulations suggest that a time varying equilibrium in the heterogeneous preference model with two consumer classes is well approximated by a constant bgp

the labor contract and true economic pension liabilities most pension covered workers in the united states are covered solely or primarily by defined benefit plans in these plans workers are typically promised a pension that is proportional to their years of service in the firm and their final wage depending upon how workers pay for it the existence of a pension in the labor contract may play either an important role or no role at all in the worker firm relationship this paper addresses the issue how workers pay for the cumulating pension benefit over their tenure cycle in the firm and derives several economic implications for the worker firm contract while the theory itself has ambiguous implications the data confirm the longstanding presumption that pensions offer strong incentives for the worker to complete the normal tenure cycle in the firm not to quit early but if this intuitive notion is accepted it is shown that a perhaps less intuitive notion is also true firms make workers longterm bondholders in the firm the same flow of worker pension savings that tie workers to the firm are not accounted for in the pension trust fund pension plans are significantly underfunded in a true economic sense this is a peculiar characteristic of the labor contract which raises several unanswered questions the paper also shows that the nature of the pension contract can play an important role in determining the wage service profile and the capitalized value of the firm recent contributions to the literature pose an interesting and unconventional view of pensions one which leads to the conclusion that pensions play a relatively minor role in the worker firm contract the argument has been implicitly made by burt barnow and ronald ehrenberg 1979 and william sharpe 1976 but has recently been stated more directly by jeremy bulow 1982 2 in essence their views rest on a legal interpretation of pension liabilities namely since the firm can legally terminate its pension plan anytime the firm s pension liabilities cannot exceed the present value of the nominal pension promises it would owe workers if the firm terminated the plan immediately if workers believe the firm will exercise its legal right it is intuitively apparent and easy to show that workers will deposit only that amount of compensation into the pension plan that they expect to receive upon immediate termination using this interpretation of pension plan liabilities pensions have no influence on whether the worker leaves or remains in the firm moreover it will be shown that if the pension contract is written in nominal terms reflecting the legal view workers are not bondholders in the firm pension plans are excessively overfunded an alternative view is that the pension plan is an implicit contract between the worker and the firm see for example jack treynor 1977 an implicit contract theory implies that workers anticipating careers with a firm will consider the package of wage and pension benefits they expect to collect over their life cycle it is shown that these expectations lead quite directly to several implications that the pension contract is written in real terms that firms intend to meet their pension promises and that the firm will re u s department of labor s 4521 washington d c 20210 the views expressed in this paper are my own and do not necessarily represent the views of the department of labor the paper has substantially benefited from the comments of pauline ippolito and discussions with jeremy bulow i am also indebted to robert clark gary fields alan gustman olivia mitchell james pesando john turner michael ward and participants at the labor relations workshop at cornell university and the law and economics workshop at the university of chicago for comments see my 1985a book 2 the argument is also implicit in other related papers see for example martin feldstein and randall morck 1982

male female wage differentials and policy responses without implicating them for any of the contents of the paper i am grateful to the following for helpful discussions or comments andrea beller university of illinois david bloom harvard and columnbia glen cain university of wisconsin ron ehrenberg cornell victor fuchs stanford bob gregory australian national university jonathan leonard university of california berkeley roberta robb brock university and paul weiler harvard financial support of the humanities and social sciences committee of the research board of the universitu of toronto is eratefullu acknowlede ed

negotiating energy futures the politics of energy forecasting abstract over the last decade it has become increasingly clear that energy forecasts have been used for partisan purposes through energy models and forecasts industrial political and administrative interests compete for cognitive and methodological hegemony we have termed this integration of modelling and politics the scientific negotiation of energy futures this article presents core elements of a sociopolitical and institutional perspective with which to analyse the generation of assumptions that underlie energy models and forecasts we focus on the factors that shape the choice of data functional forms and modelling methodologies we point to the filters of professional orientation and organizational structures that give every forecast an inherent cognitive bias we stress the legitimation function of forecasts in political decision making these factors are illustrated with a comparative analysis of energy modelling and forecasting over the last 20 years in the uk canada denmark france the netherlands norway the usa and fr germany and a discussion of the iiasa world energy model

energy modeling for policy studies energy policy modeling owes a great debt to the disciplines of operations research valuable modeling tools were available when the energy crisis struck unexpectedly in turn the immediate response to problem driven policy modeling produced methodological challenges and innovations that have application outside the domain of energy the early days of the explosive growth of energy modeling for policy studies provide illustrations of the interaction of problem identification model formulation problem analysis and policy implementation in the tradition of operations research

salary differentials by sex in the academic labor market this paper examines faculty time allocation decisions that are fundamental to the functioning of a university a random utility approach yields a grouped data multinomial logit model and predicts that time allocation decisions depend systematically on

balance sheet contagion japan has been in a slump for the past decade after gdp had been growing by on average 4 percent during the 1980 s the growth rate dropped to 1 percent in the 1990 s asset prices also fluctuated significantly capital gains on stocks and real estate in the 1980 s followed by capital losses in the 1990 s were both on the order of a few years worth of gdp even after taking inflation into account together with production and asset prices the fraction of nonperforming loans fluctuated substantially these are by no means all bank loans for the nonfinancial corporate sector in japan the ratio of financial assets to total assets is about 40 percent much higher than in the united states such financial assets include loans to and securities of other private agents that is nonfinancial institutions simultaneously borrow from and lend to each other on a significant scale many nonperforming loans are interlocked paralyzing the financial system it is important to recognize that these swings have been experienced by almost all sectors of the japanese economy yet in other countries comparable movements in asset prices have had less widespread consequences for example the recent fluctuations in the nasdaq index in the united states have been no smaller than those of asset prices in japan but the damage appears to be contained to closely related sectors although u s equity holders particularly pension funds have lost value the level of nonperforming loans is relatively limited up to now the question is why does there appear to be more contagion in some countries than in others has contagion anything to do with the nature of financing or the extent to which there are inter locking loans in this theoretical paper we examine two different mechanisms by which contagion may occur in both cases propagation is through balancesheet effects first through the indirect effects that fluctuations in asset prices have on collateral values second through the direct effects that default on or postponement of debt repayments have when there are chains of credit

viewpoint male female wage differentials how can that be abstract the paper outlines the main empirical procedures that are used to document the male female wage differential and the extent to which it reflects discrimination it then discusses the evidence on male female wage differentials their existence the extent to which they reflect discrimination their changes over time and the factors that influence the gap particular attention is paid to more recent studies that control for a wider range of conventionally unobserved factors theoretical perspectives are then outlined focusing on the issue of how discriminatory wage differentials can survive given the forces of competition the impacts of policy initiatives are also discussed

the failure of models that predict failure distance incentives and defaults statistical default models widely used to assess default risk fail to account for a change in the relations between different variables resulting from an underlying change in agent behavior we demonstrate this phenomenon using data on securitized subprime mortgages issued in the period 1997 2006 as the level of securitization increases lenders have an incentive to originate loans that rate high based on characteristics that are reported to investors even if other unreported variables imply a lower borrower quality consistent with this behavior we find that over time lenders set interest rates only on the basis of variables that are reported to investors ignoring other credit relevant information as a result among borrowers with similar reported characteristics over time the set that receives loans becomes worse along the unreported information dimension this change in lender behavior alters the data generating process by transforming the mapping from observables to loan defaults to illustrate this effect we show that the interest rate on a loan becomes a worse predictor of default as securitization increases moreover a statistical default model estimated in a low securitization period breaks down in a high securitization period in a systematic manner it underpredicts defaults among borrowers for whom soft information is more valuable regulations that rely on such models to assess default risk could therefore be undermined by the actions of market participants

celestial bodies and satellites energy issues models and imaginaries in denmark since 1973 abstract this article uses the history of macroeconomic energy modelling in denmark as a case for presenting a theoretical framework which describes issues publics and imaginaries as an important nexus for energy policy the story evolves around the actions tensions and entanglement of two publics the traditionalist and the environmentalist and presents macroeconomic modelling as an instrument for issue articulation and the construction of energy policy imaginaries the article concludes that macroeconomic modelling is an effective instrument for articulating the economic realities of energy policy and that economic growth plays a key role in these articulations by determining the basic preconditions for collective imaginaries of energy system futures

comparable worth wage adjustments and female employment in the state and local sector our paper simulates the likely effects of a comparable worth wage adjustment policy in the state and local sector on female employment in the sector the simulation is based on estimates of within occupation male female substitution and across occupation occupational employment substitution that we obtain using data from the 1980 census of population