strikes as a result of imperfect information this paper proposes a model of the bargaining process that recognizes that negotiators have only imperfect information at their command the author argues that the probability of a strike occurring will increase if one party bases its perception of the opponent s position on the same variables employed to form its own position when the opponent s position is in fact based on different variables strike probability is therefore assumed to be related to movements in variables of interest to only one side the model is tested on a sample of fourteen bargaining relationships drawn from the series wage chronology published by the bureau of labor statistics which details settlements between particular firms and unions over a period of about thirty years estimates of strike probability are derived from the maximum likelihood logit procedure the findings suggest that although both relative and absolute wage increases in a firm have a negative effect on strike frequency relative changes are more important

nominal income targeting in an open economy optimizing model abstract this paper presents simulation results regarding the performance of nominal income targeting a monetary policy rule that sets interest rates in response to deviations of nominal gdp growth from a target path the macroeconomic model is one in which agents solve dynamic optimization problems with rational expectations but in an environment with slow price adjustments in the present version consumption choices reflect habit formation and the economy is open to international flows of goods and securities when calibrated to quarterly us data the model s results suggest that nominal income targeting performs well in relation to inflation targeting and taylor rules

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

monetary policy when interest rates are bounded at zero this paper assesses the importance of the zero lower bound on nominal interest rates for the interest rate channel of monetary policy we simulate several interest rate setting policy rules with ei

strike incidence in british manufacturing in the 1980s in british manufacturing during the 1980s about one in forty wage settlements involved a strike using data provided by the confederation of british industry the authors analyze the incidence of

conflict as a part of the bargaining process this paper investigates the use of conflict as a bargaining instrument it first revises the arguments explaining the role of confrontation as a source of information and its use during negotiations then it offers evidence illustrating this phenomenon by analyzing a sample of colonial and imperial wars the second part of the paper explores a bargaining model with one sided incomplete information parties can choose the scope of the confrontation they may want to engage in an absolute conflict that terminates the game or a limited conflict that only introduces delay and conveys information about the eventual outcome of the absolute one it is shown that confrontation has a double edged effect it may paradoxically open the door to agreement when the uninformed party is so optimistic that no agreement is feasible but it can also create inefficiency when agreement is possible but the informed agent has an incentive to improve her bargaining position by fighting

alternative views of the money transmission mechanism what difference do they make for monetary policy this paper examines how alternative views of the monetary transmission mechanism affect the choice of a monetary policy rule the main finding is that many different structural models indicate that the same simple monetary policy rule one in which the central bank s target short term interest rate reacts to inflation and to real output would perform well such rules work well even in models where the monetary transmission mechanism has a relatively strong exchange rate channel the models differ however in their implications for more complex monetary rules prepared for the oxford review of economic policy this paper is an updated revised and shortened version of an earlier paper entitled the monetary transmission mechanism and the evaluation of monetary policy rules presented at the central bank of chile in september 20 21 1999 i am grateful to david vines for very helpful comments

state dependence in the incidence of strikes evidence from canadian contract data using heckman s dynamic probit model abstract this paper considers whether there is state dependence in strike incidence using longitudinal contract data from canada i obtain my estimates using heckman s estimator for dynamic probit models and find that there is no state dependence in strike incidence

sticky price models of the business cycle can the contract multiplier solve the persistence problem we construct a quantitative equilibrium model with firms setting prices in a staggered fashion and use it to ask whether monetary shocks can generate business cycle fluctuations these fluctuations include persistent movements in output along with the other defining features of business cycles like volatile investment and smooth consumption we assume that prices are exogenously sticky for a short time persistent output fluctuations require endogenous price stickiness in the sense that firms choose not to change prices much when they can do so we find that for a wide range of parameter values the amount of endogenous stickiness is small thus we find that in a standard quantitative model staggered price setting alone does not generate business cycle fluctuations

the influence of fomc member characteristics on the monetary policy decision making process abstract this paper provides new empirical evidence on a monetary policy committee with heterogeneous members whose decisions affect the efficacy of monetary policy it thereby provides a link between the literature on monetary policy committees and central bank monetary policy implementation through monetary rules using a novel dataset of the idiosyncratic characteristics of fomc members over the period from august 1979 to february 2014 the empirical findings show that characteristics such as education age and to a lesser extent work experience are not important in understanding the fomc decision making process instead the results point to the importance of time spent within the federal reserve system tenure on the fomc itself and the influence of the chair in shaping the decision making process the results are expected to have implications for the capacity of economic agents as well as various markets in the economy to more readily interpret public monetary policy information that reaches them this makes the monetary policy decision process less noisy and thus enhances the capability of agents and markets to attach the correct weight to this information

the political economy of targeting one of the most widely used method of targeting is to reduce welfare benefits as income rises although the need for such targeting is clear enough it also entails two important difficulties firstly the prospect for the recipients of losing part of their benefits if they were to earn more can be a deterrent to work harder secondly by reducing the number of recipients targeting reduces the political support for taxation and redistribution the purpose of this paper is to study the voting equilibrium of the degree of targeting and the level of taxation in an economy where labour supply is variable the analysis reveals that targeting may be fatal for redistribution even though it rejects strictly less than the richest half of the population and that it is not possible for a coalition of the extremes to form and reject the middle income group from the welfare system moreover because targeting affects labour supply we find that pareto improvements are possible when targeting is either too low or too high we also find that voting simultaneously over taxation and targeting is favourable to the poor in the sense that they can converge to their most preferred policy by successively forming a majority coalition with the rich to increase targeting and with the middle to increase taxation

the political economy of social security we consider a two period overlapping generations model in which individual voters differ by age and by productivity in such a setting a redistributive pay as you go system is politically sustainable even when the interest rate is higher than the rate of population growth the workers with medium wages not those with the lowest wages and the retirees form a majority which votes for a positive level of social security this level depends on the difference between the rates of population growth and interest as well as on the redistributiveness of the benefit rule

learning by striking estimates of the teetotaler effect we hypothesize that past strike experience will have a negative or teetotaler effect on a collective bargaining unit s propensity to strike in future negotiations other things being equal we test this using a unique micro level sample comprising four consecutive negotiations by 147 bargaining units in u s manufacturing industries controlling for observable and unobservable differences among bargaining pairs in the propensity to strike our results are consistent with the view that the experience of striking is indeed sobering lagged strike experience variables have a significantly negative effect on the propensity to strike in the current negotiation

the monetary transmission mechanism an empirical framework this paper provides an overview of the monetary transmission mechanism describing the impact of changes in monetary policy on real gdp changes in financial market prices including long term interest rates and exchange rates are the main vehicle for the transmission of policy the framework incorporates rational expectations and policy rules it is empirical and appears to fit the facts well

historical limits on neoclassical strike theories evidence from french coal mining 1890 1935 this study analyzes the determinants of strikes in french coal mining over the period 1890 1935 the results indicate that factors emphasized by traditional bargaining power models were more important determinants of strikes in that setting than was economic variability this finding supports the hypothesis that neoclassical theories of strikes hicksian theories that strikes are a function of the parties lack of information about the economic environment in which bargaining takes place are inappropriate in some historical and political contexts specifically the authors argue that the many settings where as in the case considered strikes are politically motivated firms have simple economic structures and collective bargaining is poorly institutionalized should provide evidence discontinuing neoclassical predictions

estimating the narcotic effect of public sector impasse procedures this paper first describes in a relatively nontechnical fashion several econometric techniques that the authors believe should be useful to industrial relations researchers those techniques are then applied to an analysis of whether public sector impasse procedures create a narcotic effect that is a tendency for the bargaining parties once they use the procedures to become increasingly reliant on them in future negotiations the authors reanalyze data from thomas kochan and jean baderschneider s study of the impasse experience of police and firefighters under new york state s taylor law during the 1968 76 period and find that while a narcotic effect did exist as kochan and baderschneider argued that relationship lasted only during the early years of the period and was actually reversed in later years the authors conclude by explaining how such a pattern of results could occur tracing the implications of their findings for public policy and suggesting other research questions that could be anal

sticky price and limited participation models of money a comparison abstract we provide new evidence that models of the monetary transmission mechanism should be consistent with at least the following facts after a contractionary monetary policy shock the aggregate price level responds very little aggregate output falls interest rates initially rise real wages decline by a modest amount and profits fall we compare the ability of sticky price and limited participation models with frictionless labor markets to account for these facts the key failing of the sticky price model lies in its counterfactual implications for profits the limited participation model can account for all the above facts but only if one is willing to assume a high labor supply elasticity 2 percent and a high markup 40 percent the shortcomings of both models reflect the absence of labor market frictions such as wage contracts or factor hoarding which dampen movements in the marginal cost of production after a monetary policy shock 1997 elsevier science b v

third party intervention and the preservation of bargaining relationships this article uses longitudinal bargaining contract data to examine whether third party dispute resolution procedures improve the health of bargaining relationships and contribute to their preservat

uncertainty and labor contract durations this paper provides an empirical investigation into the relationship between ex ante u s labor contract durations and uncertainty over the period 1970 to 1995 we construct measures of inflation uncertainty as well as aggregate nominal and real uncertainty the results not only corroborate previous findings of an inverse relationship between contract durations and inflation uncertainty but also document that this relationship extends to both measures of aggregate uncertainty we also explore the robustness of this relationship to various measures of inflation uncertainty that have appeared in the literature

the robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the european central bank abstract this paper examines the implications of recent research on monetary policy rules for practical monetary policy making with special emphasis on strategies for setting interest rates by the european central bank ecb the paper draws on recent research and new simulations of a large open economy model to assess the efficiency of a simple benchmark rule in comparison with other proposed rules further it stresses new results on the robustness of monetary policy rules in which each rule that is optimal or good according to one model or researcher is tested for robustness by other researchers using different models because of the large increase in the number of economists focussing on econometric evaluation of monetary policy rules for the interest rate instrument and because of the parallel increase in the variety of models being developed for this purpose much more evidence is becoming available on the robustness of simple monetary policy rules for the interest rate than ever before

strikes as collective voice a behavioral analysis of strike activity this paper outlines a collective voice approach for examining the behavioral determinants of variation in strike activity at the organizational level the author argues that strikes should be vie

inventories and strikes this paper analyses a dynamic model of bargaining and strikes in which the reservation wage of union members in each period is private information the model endogenizes the firm s decision to accumulate inventories of finished goods in order to enhance its bargaining position with higher inventories the firm makes a lower wage offer thereby accepting an increased probability of a strike the model can help explain empirical results that have found a positive correlation between wages and inventory accumulation it also shows that unless inventories are controlled for strike incidence will exhibit a spurious negative state dependence

public provision of private goods government may provide a good that can if legally permitted be supplemented by private purchases policy is determined by majority rule under standard assumptions on preferences a majority voting equilibrium exists a regime of positive government provision with no restriction on private supplements is shown to be majority preferred to a regime of either only market provision or only government provision combined public and private expenditure on the good is higher under this dual provision regime than under either of the alternatives under some preference configurations the median income voter is pivotal under others a voter with income below the median is pivotal

do organizations have to change to learn examining the effects of technological change and learning from failures in the natural gas distribution industry failures contain valuable information however organizations vary at learning from them i ask whether failures prompt organizations to make technological investments and whether these investments help boost performance beyond improvements gained through direct organizational learning i test hypotheses on natural gas distributors to determine whether they enhance their performance by learning directly by recognizing failures as prompts to invest in safer technologies or through a combination results suggest that distributors learn directly though firms which also invest in related technologies are able to gain some additional benefits copyright 2010 the author 2010 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the effect of labour relations legislation on strike incidence the impact on strike incidence of nine labour relations policy variables representing legislation in eleven canadian jurisdictions is estimated using logit analysis of 3 347 individual collective agreements mandatory strike votes compulsory dues check off and compulsory conciliation boards are associated with significantly lower strike probabilities prohibition of replacement workers and employer initiated strike votes are associated with significantly higher strike probabilities no significant association was found between strike incidence and the length of cooling off period following conciliation and negotiated or automatic reopeners policy impacts are interpreted in a framework emphasizing the influence of asymmetric inforrnation and joint costs on strikes

the determinants of strike incidence and severity a micro level study this paper investigates the determinants of strike incidence and severity during labor contract negotiations the author develops a model that considers the forces influencing both unions willingness to strike and employers willingness to take a strike and estimates it using data describing 1 050 negotiations in u s manufacturing during the 1971 80 period the results indicate that strike incidence is influenced by the gender composition of the labor force demand fluctuations in the product market location in a right to work state the number of workers in the bargaining unit union density in the industry and the extent to which wages kept pace with inflation over the prior contract period on the other hand neither the local unemployment rate when negotiations began nor the inflation rate over the term of the expiring contract influenced strike incidence or severity in this sample