equilibrium and government commitment abstract how should a government use the power to commit to ensure a desirable equilibrium outcome in this paper i show a misleading aspect of what has become a standard approach to this question and i propose an alternative i show that the complete description of an optimal indeed of any policy scheme requires outlining the consequences of paths that are often neglected the specification of policy along those paths is crucial in determining which schemes implement a unique equilibrium and which ones leave room for multiple equilibria that depend on the expectations of the private sector

balance of payment crises in emerging markets how early were the early warning signals although many papers have already proposed empirical models of currency crises the timing of such crises has received relatively little attention so far most papers use indeed a static specification and impose the same lag structure across all explanatory variables this by construction prevents from specifically timing the crisis signals sent by the leading indicators the objective here is to fill this gap by considering a set of dynamic discrete choice models the first contribution is to identify how early in advance each explanatory variable sends a warning signal some indicators are found to signal a crisis in the very short run while others signal a crisis at more distant horizons the second contribution is to show that state dependence matters albeit mostly in the short run the results have important implications for crisis prevention in terms of the timeliness and usefulness of the envisaged policy response

exchange rate crises and fiscal solvency this paper combines insights from generation one currency crisis models and the fiscal theory of the price level ftpl to create a dynamic ftpl model of currency crises the initial fixed exchange rate policy entails risks due to an upper bound on government debt and stochastic surplus shocks agents refuse to lend into a position for which the value of debt exceeds the present value of expected future surpluses policy switching usually combined with currency depreciation restores fiscal solvency and lending this model can explain a wide variety of crises including those involving sovereign default we illustrate by explaining the crisis in argentina 2001

the diversion from unemployment to sickness across british regions and districts beatty c and fothergill s 2005 the diversion from unemployment to sickness across british regions and districts regional studies 39 837 854 around 2 7 million non employed adults of working age in the uk claim sickness related benefits and the numbers have risen steeply over time the very large variation in the numbers across districts and regions points strongly to extensive hidden unemployment especially in older industrial areas affected by job losses this paper builds on two previous papers by the same authors one dealing with the theoretical framework and the other with a local case study to present wholly new estimates of the scale of the diversion across all parts of the country it also questions contemporary perceptions of the uk labour market and the validity of current approaches to re engaging sickness claimants with employment

an empirical study of tax audits in china on international transfer pricing abstract this research studies how chinese tax authorities implement international transfer pricing legislation the analysis indicates that tax audits on transfer pricing are confined mainly to medium and small sized foreign investments lower technology companies and transfer of tangible goods and tend to focus on certain nationality and forms of foreign investment persistent losses low profitability and lack of local partners in joint venture management most often trigger tax audits the authorities focus on profit results rather than prices and often use comparable profit method to adjust income tax differentials do not appear to be the most important inducement to transfer pricing manipulations

credibility of policies versus credibility of policymakers standard models of policy credibility defined as the expectation that an announced policy will be carried out emphasize the preferences of the policymaker and the role of tough policies in signaling toughness and raising credibility whether a policy is carried out however will also reflect the state of the economy we present a model in which a policymaker maintains a fixed parity in good times but devalues if the unemployment rate gets too high our main conclusion is that if there is persistence in unemployment observing a tough policy in a given period may lower rather than raise the credibility of a no devaluation pledge in subsequent periods we test this implication on ems interest rates and find support for our hypothesis

recovery or stagnation britain s older industrial towns since the recession britain s older industrial towns have long been known to face economic problems however in the aftermath of the recession triggered by the 2008 financial crisis recorded unemployment in the town

economic fundamentals and self fulfilling crises further evidence from mexico abstract this paper considers a model of debt stabilization under a fixed exchange rate in which a currency crisis can develop as the result of self fulfilling speculation following a bifurcation in the behavior of economic fundamentals based on this theoretical framework and by exploiting the test developed by jeanne 1997 this paper provides evidence that self fulfilling speculation was at work in the 1994 mexican crisis in terms of fundamentals we show that the critical variables in generating the mexican crisis were the fast rise in us denominated public debt tesebonos the appreciated real exchange rate and the small rises in unemployment and primary deficit

transfer pricing determinants of u s multinationals this paper examines the influence of environmental and firm specific variables on the selection of international transfer pricing strategies the primary data were obtained from 164 multinational enterprises by means of a questionnaire responses were analyzed by performing factor analysis and constructing a probit model the findings suggest that legal constraints and firm size are significant determinants in the selection of international transfer pricing strategies by u s multinationals

monetary policy in the end game to exchange rate based stabilizations the case of mexico abstract this paper evaluates the extent to which mexican monetary policy in 1994 may have loosened or not tightened sufficiently in the lead up to the devaluation using econometric models of money demand we find evidence that the high monetary base growth reflected strong positive shocks to the demand for money not supply next we show that interest rates rose only moderately less in 1994 than was predicted by an estimated reaction function thus to have maintained the peg the authorities would have needed to intensify their response to exchange market developments to alter their reaction function at a time when concerns over the banking sector and the economy pointed to a relaxation of monetary policy

destabilizing effects of exchange rate escape clauses abstract this paper studies policy rules with escape clauses analyzing as an example fixed exchange rate systems that allow member countries the freedom to realign in periods of stress while well designed escape clause rules can raise society s welfare in principle limited credibility makes it difficult to implement such rules in practice an ems type institution that imposes political costs on policymakers who realign may raise welfare but can also produce equilibria far inferior to an irrevocably fixed exchange rate switches between multiple equilibria may have the character of sudden speculative attacks

co ordination failure moral hazard and sovereign bankruptcy procedures we study a model of sovereign debt crisis that combines problems of creditor co ordination and debtor moral hazard solving the sovereign debtor s incentives leads to excessive rollover failure by creditors when sovereign default occurs we discuss how the incidence of crises might be reduced by international sovereign bankruptcy procedures involving contractibility of sovereign debtor s payoffs suspension of convertibility in a discovery phase and penalties in case of malfeasance in relation to the current debate this is more akin to the imf s sovereign debt restructuring mechanism than the collective action clauses promoted by others

the mirage of fixed exchange rates this paper discusses the profound difficulties of maintaining fixed exchange rates in a world of expanding global capital markets contrary to popular wisdom industrialized country monetary authorities easily have the resources to defend exchange parities against virtually any private speculative attack but if their commitment to use those resources lacks credibility with markets the costs to the broader economy of defending an exchange rate peg can be very high the dynamic interplay between credibility and commitment is illustrated by the 1992 swedish and british crises and the 1994 95 mexican collapse we also discuss the small number of successful fixers

are currency crises self fulfilling abstract this paper studies the respective roles of the fundamentals and self fulfilling speculation in currency crises we first present a model of a fixed exchange rate system in which self fulfilling speculation can arise following a bifurcation in the fundamentals we then estimate the model in the case of the 1992 3 crisis of the french franc and find some evidence that self fulfilling speculation was at work

mexico s balance of payments crisis a chronicle of a death foretold this paper claims that the roots of mexico s balance of payments crisis are found in the prevailing high degree of capital mobility and financial globalization under these circumstances shifts in foreign capital flows and anticipation of a banking system bailout may produce large imbalances between stocks of financial assets and foreign reserves threatening the sustainability of currency pegs econometric analysis suggests that half of mexico s reserve losses could be accounted for by these phenomena large financial imbalances are also fertile ground for self fulfilling prophesy crises which lead devaluations to produce deep recessions these difficulties can be partly remedied by appropriate policies

labour market adjustment in areas of chronic industrial decline the case of the uk coalfields beatty c and fothergill s 1996 labour market adjustment in areas of chronic industrial decline the case of the uk coalfields reg studies 30 627 640 the paper explores the labour market consequences of the near terminal decline of employment in the uk coal industry despite the job loss registered unemployment has not risen using labour market accounts derived mainly from census of population data the paper examines the roles of migration commuting job creation and changes in labour force participation as mediating influences substantial hidden male unemployment is exposed and rates of real unemployment are also calculated beatty c et fothergill s 1996 l ajustement du marche du travail dans les zones serieusement touchees par le declin industriel cas d etude des bassins houillers au royaume uni reg studies 30 627 640 cet article cherche a examiner l impact sur le marche du travail du declin quasi terminal de l emploi dans l industrie houillere au royaume uni en depit des supp

international corporate taxation and u s multinationals behaviour an integrated approach this paper explores the effects of corporate taxation on u s capital invested abroad and on tax planning practices the econometric analysis first indicates that investment is strongly influenced by average tax rates with a magnified impact particularly for low tax rates implying that the attractiveness of low tax countries is not weakened by anti deferral rules and cross crediting limitations further explorations suggest that firms report higher profit higher subpart f income and are less likely to repatriate dividends when they are located in low tax jurisdictions finally when the role of effective transfer pricing regulations is estimated it appears that low degrees of law enforcement are associated with higher income shifting ce memoire s interesse aux effets des impots sur le revenu des societes sur l investissement et les pratiques de planifications fiscales des firmes multinationales americaines l analyse econometrique indique que l investissement americain est fortement influence par le taux d imposition moyen et que cet impact est sensiblement plus important pour de faibles taux d imposition ceci suggere que l attractivite des pays a faible imposition n est pas affaiblie par les limites imposees par le systeme fiscal americain sur la possibilite de differer l impot et sur les moyennes de credit des tests additionnels montrent que les firmes reportent un profit ainsi qu un revenu subpart f plus important et rapatrient moins leurs dividendes lorsqu elles sont localisees dans des pays a faible imposition finalement en estimant le role joue par l efficacite des reglementations en termes de prix de transferts il apparait qu un faible etat de droit est associea de plus fortes manipulations fiscales

the taxing task of taxing transnationals financial and real investment flexibility tax competition and superior economic information by transnationals both create a rationale for corporate income taxation and limit the effectiveness of such taxation while these factors have led to a variety of transnational tax policies such as deferral double taxation apportionment and trade rules very few of these institutional features have been integrated into tax competition and agency models in this paper i show how the integration of investment flexibility tax competition and agency issues is crucial to our understanding of corporate tax policies

monetary policy cooperation and multiple equilibria abstract we consider international monetary policy regimes in a world of two identical economies characterized by unemployment persistence in the non cooperative regime markov perfect nash equilibrium policies are generally not unique furthermore policies may be asymmetric in this otherwise symmetric model monetary policy cooperation also exhibits multiple equilibria but these are fewer and always symmetric cooperation may be counterproductive or beneficial for either country depending upon the initial non cooperative and resulting cooperative outcome

determinants and costs of current account reversals under heterogeneity and serial correlation using large panel data sets for analysis of determinants and costs of reversals asks for controls of latent heterogeneity among countries this article performs a bayesian analysis which allows for a parsimonious yet flexible handling of country specific heterogeneity via random coefficients and serially correlated errors consideration of persistence within the employed macroeconomic data is important to gauge the impact of explaining variables suggested by theory correctly bayesian specification tests provide evidence in favour of models incorporating heterogeneity and serial correlation the results suggest that costs of reversals are overestimated when country specific heterogeneity is neglected and stress the importance of external variables in explaining current account reversals results are checked for robustness against the underlying reversal definition

was china the first domino assessing links between china and other asian economies abstract several commentators have suggested that competition from china in particular its 1994 devaluation and strong export performance during 1994 95 may have contributed to the asian crisis of 1997 98 we provide evidence against this view we show that the devaluation was not important in economic terms and china s strong export performance in 1994 95 was matched by other asian economies we also show that the period 1993 and 1996 was marked by relative stability in the export shares of china and other asian economies in various geographical regions and industries the paper concludes by outlining channels through which the asian crisis could affect china

reported trade figure discrepancy regulatory arbitrage and round tripping evidence from the china hong kong trade data this study uses reported trade figures from china and hong kong to examine the relationships among market impediments trade figure irregularities and tax induced regulatory arbitrage the empirical findings consistent with our tax induced regulatory arbitrage models and the round tripping phenomenon in china that is moving funds across the mainland chinese border through trade typically to hong kong or an offshore tax haven before re entering china as foreign direct investment provide support for several conclusions first the spurious flows of funds to and from china via the underreporting of exports and the overreporting of imports closely follow the preferential tax incentives accorded to foreign investors second the underreporting of exports is negatively related to export tax rebates third the overreporting of imports is negatively related to import tariffs finally both of these two appear to be most prevalent in state owned enterprises

can debt crises be self fulfilling abstract several papers argue that debt crises can be the result of self fulfilling expectations that no one will lend to a country triggering default and rationalizing the refusal to lend i show these coordination failures can be eliminated by a combination of state contingent securities and a mechanism that allows investors to promise to lend only if enough other investors do so as well this suggests that runs on the debt of a single borrower such as the government can be eliminated and that self fulfilling features are more plausible when externalities among many decentralized borrowers allow for economy wide debt runs to occur

central bank independence and macroeconomic performance some comparative evidence this note uses information on a sample of sixteen oecd countries to assess the relationship between central bank independence and macroeconomic performance as previous work suggests politically controlled central banks are more likely to pursue policies that lead to high and variable inflation however the authors find little evidence that political control of central bank policy has any impact on measures of the level or variability of growth unemployment or the ex ante real interest rate copyright 1993 by ohio state university press

the mexican peso crisis sudden death or death foretold abstract we argue that allowing for the possibility of a self fulfilling panic helps to understand several features of the recent mexican crisis self fulfilling expectations became decisive in generating a panic only after the government ran down gross reserves and ran up short term dollar debt we present a simple model to explain how and why multiple equilibria can occur for some levels of reserves or debt but not for others lastly we argue that the imperfect credibility of mexican exchange rate policy made it advisable to follow more contractionary fiscal and monetary policies in 1994 our model formalizes the reasons why this is so

multiple equilibria and currency crisis evidence for korea abstract this paper estimates a non linear model that allows for multiple equilibria using data on korea during the currency crisis in 1997 results suggest that korea may have been vulnerable to self fulfilling speculation as early as january 1997 an extended phase of multiple equilibria started in october 1997 the fundamentals for korea remained in this crisis zone until march 1998 korea briefly entered a multiple equilibria zone again in may and june 1998 before stabilizing in july 1998 results are supportive of roles for weakness in fundamentals and for self fulfilling beliefs in explaining currency crises

the balance of payments and borrowing constraints an alternative view of the mexican crisis in this paper we develop a model in which a country faces a balance of payments crisis if constraints on its international borrowing bind we use the model to describe the dynamics of the trade balance capital account and balance of payments of a country that borrows to finance consumption following sweeping macroeconomic and structural reforms and then hits constraints on its international borrowing we compare the predictions of this theoretical example with events in mexico from 1987 through 1995

banks and liquidity crises in emerging market economies abstract this paper presents and analyzes a simple banking model in which banks have access to international capital markets and domestic asset markets the model generates two types of equilibria a no default equilibrium and a mixed equilibrium in the no default equilibrium all banks are symmetric and always solvent while in the mixed equilibrium some banks can be internationally illiquid and default simultaneously the latter equilibrium captures the basic features of banking crises after financial liberalization in emerging market economies in this case a large capital inflow leads to high asset price volatility and magnifies a banking crisis

international and domestic collateral constraints in a model of emerging market crises abstract we build a model of emerging markets crises which features two types of collateral constraints firms in a domestic economy have limited borrowing capacity from international investors they also have limited borrowing capacity with respect to each other we study how the presence and changes in these collateral constraints affect financial and real variables a binding international constraint in the aggregate leads to a sharp rise in interest rates and fire sales of domestic assets while limited domestic collateral can lead to wasted international collateral these two collateral constraints can interact in important ways the first is disintermediation a fire sale of domestic assets causes banks to fail in their function of reallocating resources across the economy leading to wasted international collateral the second is a dynamic effect we show that firms in an economy with limited domestic collateral and a binding international collateral constraint will not adequately precaution against adverse shocks increasing the severity of these shocks

speculative attack and the external constraint in a maximizing model of the balance of payments balance of payments models of speculative attack differ from non renewable resource models in that foreign exchange reserves may be borrowed from abroad this paper shows that in an idealized world where all private income is subject to lump sum taxation central bank reserves can become infinitely negative without violating the government s intertemporal budget constraint none the less a growth rate of domestic credit exceeding the world interest rate if maintained indefinitely leads to violation of the constraint in the paper s model given an assumed limit to official external borrowing the paper next analyses inevitable transitions between fixed and floating exchange rate regimes when individual preferences are explicitly specified in a discrete time deterministic model the collapse of a fixed rate may be characterized by two successive speculative attacks

default on sustainable public debt illiquidity suspect convicted abstract according to a well established economic principle any public debt that does not exceed the discounted stream of future primary surpluses should find buyers this paper argues why this principle may not hold if the government has only imperfect control over its net income flow a small risk of unsustainability appears to be at the origin of a much larger risk of illiquidity solving the model for the rational expectations equilibrium we find that the maximum debt level that investors are willing to hold may be much lower than the commonly used sustainable level

financial crisis fiscal policy and the 1995 gdp contraction in mexico in 1995 mexico experienced its largest contraction of gross domestic product gdp since the early twentieth century i propose a simple mechanism to partially account for the contraction the effects of changes in fiscal policy the contraction of gdp was preceded by a financial crisis the government responded by raising taxes and reducing spending using a model with taxation and government consumption and the business cycle accounting methodology i measure the impact of fiscal policy fiscal policy accounts for 20 7 of the fall in output

multinational firms heterogeneity in tax responsiveness the role of transfer pricing in this paper we show that the ability of multinational firms to manipulate transfer prices affects the tax sensitivity of foreign direct investment fdi we offer a model of international capital allocation where firms are heterogeneous in their ability to manipulate transfer prices perhaps paradoxically we show that the ability to shift profits can make parent companies investment more sensitive to host country tax rates as long as investors expect fiscal authorities to use price and profit detection methods we then offer a comprehensive empirical study to test our predictions in the case of japanese fdi we exploit the finding that the unobservable ability to manipulate transfer prices is correlated with whole ownership of affiliates and r d expenditure based on country parent firm and sector characteristics we estimate an investment equation on a sample of 3 614 japanese affiliates in 49 emerging countries we obtain a greater semi elasticity of investment to the statutory tax rate in affiliates that are wholly owned and that have r d intensive parents we interpret these results as indirect evidence that abusive transfer pricing is one of the determinants of fdi activity

rational and self fulfilling balance of payments crises speculative attacks on a pegged exchange rate must sometimes occur ifasset price paths are to be free of abnormal profit opportunities suchattacks are fully rational as they reflect the market s response to aregime breakdown that is inevitable the authors shows that under someexpectations about policy balance of payments crises can also be purely self fulfilling events in such cases even a permanently viableregime may collapse and the economy will possess multiple equilibriacorresponding to different subjective assessments of the probability ofa crisis the behavior of the domestic interest rate will naturally reflect the possibility of a speculative attack copyright 1986 by american economic association

speed of adjustment and self fulfilling failure of economic reform abstract an economic reform programme where inefficient public labour is laid off is considered the immediate effect is a lowering of wages and increased profitability in the private modern sector over time as capital accumulates in the modern sector wages and production increases big bang reform generates a sharp transitory drop in wages while gradual reform gives a more modest decline in the presence of a subsistence wage constraint popular resistance can cause the cancellation of big bang reform two arguments for gradualism can in that case be made first a more gradual reform requires a less abrupt drop in the wage and will therefore be feasible second the initial wage drop will be stronger if a cancellation of reform is expected and since cancellation is dependent on the severity of the initial wage drop multiple equilibria occurs the existence of multiple equilibria is dependent on the speed of reform sufficiently gradual programmes have a unique successful equilibrium

high public debt in currency crises fundamentals versus signaling effects abstract this paper examines how public debt government credibility and external circumstances affect the probability of currency devaluations in a three period open economy version of the barro and gordon j polit economy 91 1983 589 model nominal public debt links current to future policy actions resisting a crisis may either enhance or undermine the sustainability of the exchange rate regime depending on whether what matters is the government s reputation or fundamentals i e the level of the debt the focus is on the impact of public debt debt maturity and the government s credibility on the expected devaluation in the current and future periods we can thus identify the factors that affect the short term interest rate and the forward rate hence derive predictions about the level and the slope of the yield curve

towards a new early warning system of financial crises abstract this paper develops a new early warning system ews model based on a multinomial logit model for predicting financial crises it is shown that commonly used ews approaches which use binomial discrete dependent variable models are subject to what we call a post crisis bias this bias arises when no distinction is made between tranquil periods when economic fundamentals are largely sound and sustainable and crisis post crisis periods when economic variables go through an adjustment process before reaching a more sustainable level or growth path we show that applying a multinomial logit model which allows distinguishing between more than two states is a valid way of solving this problem and constitutes a substantial improvement in the ability to forecast financial crises the empirical results reveal that for a set of 20 open emerging markets for the period 1993 2001 the model would have correctly predicted a large majority of crises in emerging markets

fiscal policies and the choice of exchange rate regime a common argument against either a monetary union or a regime or a fixed exchange rates is that they preclude flexible use of the inflation tax the authors address this point of view by comparing three alternative exchange rate regimes a pure float an ems regime in which the exchange rate is fixed but can be realigned and a monetary union the authors model the three regimes as alternative commitments on future seigniorage policies this approac h suggests that it is not possible to pareto rank the three regimes o n the other hand the authors provide intuitive conditions under which each of the systems is superior to the others copyright 1993 by royal economic society

exchange market mayhem the antecedents and aftermath of speculative attacks exchange market mayhem the antecedents and aftermath of speculative attacks this paper evaluates the causes and consequences of episodes of turbulence in foreign exchange markets using data from 1959 through 1993 for twenty oecd countries we consider the antecedents and aftermath of devaluations and revaluations flotations fixings and speculative attacks which may not be successful we find that realignments of fixed exchange rates are alike devaluations are preceded by political instability budget and current account deficits and fast growth of money and prices revaluations are mirror images of devaluations speculative attacks resemble devaluations but money growth and inflation are more endemic and there is no last minute attempt to tighten monetary policy in contrast few consistent correlations link regime transitions like flotations or fixings to macroeconomic or political variables transitions between exchange rate regimes are largely idiosyncratic and are neither consistently provoked ex ante by systematic imbalances nor typically justified ex post by subsequent changes in policy we conclude that there are no clear early warning signals of many speculative attacks and no easy solutions for policy makers barry eichengreen andrew k rose and charles wyplosz

collapsing exchange rate regimes some linear examples abstract we construct a pair of linear examples to study the collapse time of a fixed exchange rate regime the first example is a perfect foresight continuous time model which allows calculation of the exact collapse time and the tracking of reserves the second example is a discrete time stochastic model which yields an endogenous probability distribution over the collapse time and produces a forward discount of the exchange rate

a cardan s discriminant approach to predicting currency crashes abstract this paper models large swings in exchange rates by introducing nonlinearity via the generalized normal gen distribution lye j n martin v l 1993 robust estimation nonnormalities and generalized exponential distributions journal of the american statistical association 88 261 267 as the distribution allows for bimodality a switch between modes may give rise to currency crashes a statistic known as cardan s discriminant based on the shape parameters of the gen is used to detect bimodality the cardan s discriminant is found to reliably predict currency crashes for eight emerging countries and generate relatively low false signals for stable currencies

did established early warning signals predict the 2008 crises abstract over the past 60 years a voluminous literature has painstakingly developed crises theories and their associated early warning signals the hallmark of this literature is the consistency with which selected early warning signals such as the level of reserves and exchange rate appreciations are presumed to predict different types of crises across countries and time the diversity of crises theories that motivate early warning signals presents however a challenge to empirical implementations given that the true model of early warning signals is unknown omitted variable bias contaminates estimates and confidence levels when the uncertainty surrounding a particular theory has been ignored after addressing model uncertainty in early warning signal regressions using an extended version of frankel and saravelos 2012 j int econ 87 216 231 dataset we do not find a single early warning signal that alerts to all dimensions of the 2008 crisis instead distinct sets of early warning signals identify different dimensions of the crisis banking balance of payments exchange rate pressure and recession

capital flight to germany two alternative measures abstract we use two measures to study two capital flight channels for germany one measure is based on the concept of trade misinvoicing and one on net claims and liabilities in the eurosystem of central banks for both measures we propose refinements to enhance the assessment of capital flight we find that capital flight towards germany via these two channels has been quite sizable in the recent decade and can tally to about 2 of gdp annually regarding their determinants we show that the two capital flight measures are driven by both common and measure specific factors traditional determinants such as covered interest differentials only play a limited role while crisis specific factors such as economic policy uncertainty the ecb collateral policy as well as currency misalignment are driving factors of the investors apparent flight to safety behavior

policy measures to avoid a currency crisis this paper considers a number of policy measures that may be used to preserve a fixed exchange rate these are analyzed in a model where a switch of exchange rate regime is triggered by an optimizing policymaker in response to extreme economic conditions it is shown how a number of policy measures can be used to alter the balance between the costs and benefits of switching between regimes these policy measures have both a direct effect on the policymaker s choice of regime switching point and an indirect effect through private sector expectations of a regime switch copyright 1995 by royal economic society

economic change and the labour market in britain s seaside towns beatty c and fothergill s 2004 economic change and the labour market in britain s seaside towns reg studies 38 461 480 for thirty years britain s seaside towns have faced the challenge of the rising popularity of foreign holidays this paper explores how their economies have adapted and in particular the extent to which high claimant unemployment in many of the towns is rooted in local job loss by deploying labour market accounts for 1971 to 2001 the paper shows that in fact the continuing imbalance in seaside labour markets owes more to high levels of in migration than to job loss and even the sectors of the local economy most closely linked to tourism show growth in employment