bluuebunny/crossref_metadata_2025 huggingface dataset:
Accounting for Recent Economic Growth in Southeast Asia
Authors: Kohli Ulrich
Published: March 2003

This paper identifies the major factors explaining GDP growth in a number of Southeast Asian countries during the 1980s and early 90s. Estimates of the contribution of technological change, increases in the endowments of labor and capital, movements in the terms of trade, and changes in domestic output prices are reported for Hong Kong, Japan, South Korea, the Philippines, and Thailand. Partial results for Indonesia and Malaysia are also shown. An index number approach is used; it has a tight theoretical foundation, being based on the GNP/GDP function approach to modeling the production sector of an open economy.
Exchange Control, Black Market for Foreign Exchange, and Employment in a Model with a Nontraded Good
Authors: Acharyya Rajat
Published: March 2003

This paper examines the employment effect of devaluation in a model with a nontraded good and a black market for foreign exchange. The disaggregative approach reveals, in contrast to an earlier one‐sector analysis, that overall employment may change even if the exchange control is such that aggregate output remains the same following devaluation. But in such a situation, depending on the state of the market, the change in nontradables demand due to a change in the black market exchange rate constitutes the major source of a contractionary effect, and that too happens when, most desirably, the black market rate appreciates.
Schooling, Informal Experience, and Formal Sector Earnings: A Study of Indian Workers
Authors: Saha Bibhas , Sarkar Subrata
Published: March 2003

This paper estimates an earnings function for male workers belonging to the Indian corporate sector. The model allows for differential rates of return to schooling and distinguishes tenure from total labor market experience. The rate of return to schooling is found to be low up to the junior level, increases significantly at the secondary and undergraduate levels, but sharply declines at the masters level. Seniority and firm‐specific factors are found to be important determinants of earnings. When years of unemployment and informal experience are incorporated, earnings of low‐education workers appear to be driven entirely by formal‐sector experience.
Does Growth Encourage Factor Price Equalization?
Authors: Deardorff Alan V.
Published: March 2003

This paper first notes the importance of “one‐cone” versus “multi‐cone” equilibria in the Heckscher–Ohlin model of international trade, then asks whether economic growth in neoclassical growth models leads toward one or the other. The one‐cone equilibrium arises with internationally similar factor endowments. It has a single set (cone) of relative factor endowments, within which countries diversify and have global factor price equalization (FPE) under free trade. The multi‐cone equilibrium arises with larger factor endowment differences. It has FPE within cones, but not between them. The two configurations differ in important ways. The paper examines several neoclassical trade‐and‐growth models, distinguished by their assumptions about saving, asking whether factor endowments converge into a single cone. None of the models suggests convergence, while some strongly imply that countries will end up in different cones. This suggests a preference for the multi‐cone version of the model.
Capital Mobility in Open OLG Models of Neoclassical Growth
Authors: Cremers Emily T.
Published: March 2003

This paper explores whether the international mobility of physical and/or financial capital is essential for productive efficiency in each of three open OLG models of neoclassical growth that vary in terms of dimensional attributes. A tradeoff between capital mobility requirements and dimension has previously been established by example where, ceteris paribus, neither form of capital mobility is required with three productive sectors, only physical capital mobility is required with two sectors, and both forms of mobility are required with a single sector. This paper reconsiders that tradeoff using a generalization of the production and utility functions which introduces the potential for specialization along the transition path—an event which would imply inconsistent capital mobility requirements along the growth path for models with fixed dimension. Conditions are established under which the tradeoff between capital mobility requirements and dimension remains valid.
The Impact of Population Aging on the Socially Optimal Rate of National Saving: A Comparison of Australia and Japan
Authors: Guest Ross , McDonald Ian
Published: March 2003

This paper calculates, using a representative‐agent model of a small open economy, the optimal rate of national saving for Australia and Japan for the period from the middle 1990s to 2050. The calculations focus on the implications of making allowance for the aging structure of the population in both economies on employment participation, consumption demands, and labor productivity. It is found that for Australia the optimal rate of national saving increases up to the year 2011 and then decreases. For Japan the optimal national saving rate decreases from the mid‐1990s until 2020. The subsequent pattern to 2050 is generally one of decrease with the exact pattern being sensitive to the weight placed on the consumption demands of old people. The contrast in these patterns between Australia and Japan is due to the fact that, compared with Australia, the aging effect on the structure of population in Japan occurs sooner and will be of greater severity.
Exchange‐Rate Uncertainty and Economic Performance
Authors: Amuedo‐Dorantes Catalina , Pozo Susan
Published: March 2003

Some models support the notion that exchange‐rate uncertainty promotes economic growth while others suggest that exchange‐rate uncertainty slows growth. Most empirical work supports the latter hypothesis, leading policymakers to strive for more stable exchange rates. The authors question the appropriateness of the methodology usually employed, and variables constructed to measure the impact of exchange‐rate uncertainty on growth. They use an alternative approach and find no discernable impact of exchange‐rate uncertainty on economic performance as captured by production.
Endogenous Farmer Schooling and the Application of High‐Yielding Variety Technology in a Less‐Developed Country
Authors: Hazarika Gautam
Published: March 2003

The paper uses data from the World Bank’s Pakistan Integrated Household Survey to study the effect of farmer schooling on the application of high‐yielding variety technology in Pakistan in 1990–91. Unlike previous studies of the role of schooling in agriculture in less‐developed countries, it emulates estimation of Mincer earnings functions to treat schooling as an endogenous variable. This purges the estimates of inconsistency arising from positive correlation between unobserved farmer ability and schooling, and measurement errors in observed schooling. A measure of access to schools identifies the true causal effect of schooling on the use of improved seeds.
The Political Economy of the Kuznets Curve
Authors: Acemoglu Daron , Robinson James A.
Published: March 2003

The paper provides a political economy theory of the Kuznets curve. When development leads to increasing inequality, this can induce political instability and force democratization on political elites. Democratization leads to institutional changes which encourage redistribution and reduce inequality. Nevertheless, development does not necessarily induce a Kuznets curve, and it is shown that development may be associated with two types of nondemocratic paths: an “autocratic disaster,” with high inequality and low output, and an “East Asian Miracle,” with low inequality and high output. These arise either because inequality does not increase with development, or because the degree of political mobilization is low.
Democracy, Governance, and Economic Growth: Theory and Evidence
Authors: Rivera‐Batiz Francisco L.
Published: March 2003

The paper examines how democracy affects long‐run growth by influencing the quality of governance. Empirical evidence is first presented showing that measures of the quality of governance are substantially higher in more democratic countries. A general‐equilibrium, endogenous growth model is then built to show how a governance‐improving democracy raises growth. In this model, stronger democratic institutions influence governance by constraining the actions of corrupt officials. Reducing corruption, in turn, stimulates technological change and spurs economic growth. Empirical evidence is presented showing that democracy is in fact a significant determinant of total factor productivity (TFP) growth between 1960 and 1990 in a cross‐section of countries. But this contribution occurs only insofar as stronger democratic institutions are associated with greater quality of governance.
Technology Adoption in the Presence of Constraints: the Case of Fertilizer Demand in Ethiopia
Authors: Croppenstedt Andre , Demeke Mulat , Meschi Meloria M.
Published: March 2003

Using a nationally representative dataset, and information on why farmers did not purchase fertilizer, the authors estimate a double–hurdle fertilizer adoption model for Ethiopia. Access is an overriding constraint in four zones. Credit is shown to be a major supply–side constraint, suggesting that household cash resources are generally insufficient to cover fertilizer purchases. On the demand side, household size, formal education of the farmer, and the value–to–cost ratio have the largest impact on adoption and intensity of fertilizer use. The results underline the importance of increasing the availability of credit, developing labor markets, and reducing the procurement, marketing and distribution costs of fertilizer. The authors conclude that current large–scale transport, health, and education investment programs will positively impact smallholder productivity and household welfare. The price sensitivity of farmers suggests that an urea subsidy could be useful in redressing the nutrient imbalance currently observed in Ethiopia.
Factor Price Equalization under Imperfect Competition
Authors: Kemp Murray C. , Okawa Masayuki
Published: March 2003

The paper describes a class of imperfectly competitive world economies for which factor price equalization is inevitable. Specifically, it is shown that factor price equalization must prevail if the trading economies differ at most in scale, if they share a constant‐returns no‐joint‐products technology, and if each oligopolistic industry produces a commodity which, directly or indirectly, is internationally tradable.
Technology Collaboration and Foreign Equity Participation: A Theoretical Analysis
Authors: Marjit Sugata , Mukherjee Arijit
Published: March 2003

Technology transfer to the developing nations has been predominantly characterized by technology collaborations between the multinationals and the local firms of these developing countries. When a multinational offers a new technology to a local firm, the firms may have different perceptions regarding the success rate of the technology in the local conditions. This paper discusses various types of contractual arrangements with equity participation by the multinational, which dominate pure technology collaboration agreements.
The Substitution Problem in the Theory of Effective Protection
Authors: Davis Graham
Published: March 2003

Input substitution theoretically invalidates the resource flow predictions of effective rates of protection calculated in a partial equilibrium framework. Partial equilibrium effective protection analysis, despite this “substitution problem,” has nevertheless quietly settled into the trade economistÃÂÃÂs toolbox. This paper presents a new, transparent review of the substitution problem in effective protection. It finds that partial equilibrium effective protection analysis, although theoretically susceptible to misleading results, is in practice a reasonable estimator of certain short‐run general equilibrium effects of protection.
Import‐Price Uncertainty, Production Decisions, and Relative Factor Shares
Authors: Appelbaum Elie , Kohli Ulrich
Published: March 2003

The effects of import‐price uncertainty on factor income in Switzerland are estimated. The production‐theory approach is used to derive the import demand function from an expected utility maximization problem, treating imports as an input to the technology. The model is also used to test for risk aversion and to assess the impact of uncertainty on the volume of imports and gross output. Evidence is found that, for most years, labor has been relatively more vulnerable to uncertainty than has capital.
Market Structure and Foreign Direct Investment
Authors: Campa Jose , Donnenfeld Shabtai , Weber Shlomo
Published: March 2003

During the last decade the extent of inward foreign direct investment (FDI) in the US has increased dramatically. An important aspect of industries where most FDI takes place is their high level of concentration. This paper investigates how strategic interactions among domestic and foreign producers influence the structure of the industry. Especially, it focuses on the foreign firms’ choice between exporting versus servicing these markets by investing in a plant located in the host country when facing competition from a domestic oligopoly. The empirical investigation reveals that the relationship between FDI and tariffs is not as simple as previously thought. In highly concentrated industries, where strategic behavior may play an important role, high tariffs rather than low tariffs may lead to less FDI and more imports.
Government Subsidies of R&D in a Product Cycle Framework: US–Japan Simulations
Authors: Butler Alison , Mitchell Shannon K.
Published: March 2003

The welfare effects of R&D subsidies are examined using a product cycle model of trade between two developed countries. Simulations are done for steady‐state welfare in Japan and the USA for high‐ and low‐skilled labor over different combinations of subsidy rates. Japanese subsidies to R&D usually benefit Americans owing to an increase in product variety. However, because Japanese R&D reduces wages in the US high‐tech sector, American high‐skilled workers are hurt if Japanese subsidies are too large. Large American subsidies may cause Japanese innovation to cease. However, Japanese steady‐state welfare would be maximized in this case.
International Capital Markets and Non‐Scale Growth
Authors: Eicher Theo S. , Turnovsky Stephen J.
Published: March 2003

New growth models exhibit “scale effects,” meaning that variations in the levels of key variables exert permanent influences on growth rates. Such predictions run counter to recent empirical evidence. This paper extends a general non‐scale model to the open economy. With complete capital markets, only output and capital, but not consumption, retain their non‐scale structure. Introducing capital market imperfections, the model is again fully non‐scale. Debt subsidies are analyzed and shown to provide capital flow reversals consistent with the recent experience in East Asia.
Regional Economic Integration and Article XXIV of the GATT
Authors: Goto Junichi , Hamada Koichi
Published: March 2003

This paper studies the economic impact of regionalism under the realistic assumptions of constant tariffs and asymmetric bloc formation. As an extension of the Krugman framework, the impact is decomposed into several components, each of which has a clear economic implication. Economic integration definitely worsens outsiders’ welfare even if the external tariffs of the bloc are unraised. Bloc members’ welfare first increases with the expansion of the bloc; but when about half of the world is united into the bloc, welfare begins to decrease. Simulation results shed some light on the incentive structure of major participants, who face various configurations of regional integration.
The Optimal Penal Code vs. Infinite Nash Reversion in Trade Liberalization
Authors: Furusawa Taiji
Published: March 2003

This paper derives Abreu’s stick‐and‐carrot strategy optimal penal codes (Journal of Economic Theory, 1986, 191–225 in a partial equilibrium model that has been widely used to examine trade liberalization. Unless the asymmetry between countries is significant, the optimal penal codes take a simple form. It is also shown that the difference between the most‐cooperative pairs of tariffs supported by two schemes, the optimal penal code and infinite Nash reversion, depends crucially on the size of the surplus from exports that a deviating country forgoes when the other country places an embargo, rather than the (punitive) optimum tariff, on imports in the punishment.
Market‐Share Import Restraints in Oligopoly
Authors: Denicolò Vincenzo , Garella Paolo G.
Published: March 2003

This paper contributes to the theoretical analysis of proportional import restraints; that is, restraints that are defined in terms of percentage market share rather than in terms of volume of imports. It is shown that an increase in the market share of foreign firms from zero has a negative effect locally on domestic welfare. In the case of a domestic oligopoly, domestic firms may prefer a proportional restraint over an equivalent volume restraint.
Optimal Export Taxes, Welfare, Industry Concentration, and Firm Size: A General Equilibrium Analysis
Authors: De Santis Roberto A.
Published: March 2003

By using an imperfect‐competition model, it is shown that an export tax, optimal in partial equilibrium, is upwardly biased and may not be optimal in a general equilibrium setting with free entry/exit. It is shown also that the export tax has an ambiguous impact on firm size. The results of an applied general equilibrium model for the Turkish economy suggest that the export tax estimated with the PE formula is larger by a small factor than the computed export tax. However, the export tax leads to an increase in firm size and, most importantly, to a social welfare loss.
Preferential Trade Liberalization Under Cournot Competition
Authors: Raff Horst
Published: March 2003

Suppose a country imports a homogeneous good from n foreign countries/producers and wants to eliminate tariffs on imports from m < n of them. If foreign producers differ in their marginal costs, which ones will be among the m that are granted free trade? This paper shows, among other things, that under constant marginal cost and fairly general assumptions about demand it will be the least efficient producers.
Economic Consequences of Pegging to the Dollar in a Multicurrency World
Authors: Hamada Koichi
Published: March 2003

The paper studies the monetary mechanism of a three‐country world where two large countries are engaged in floating exchange rates with each other, and a small country is pegged to one of these large countries. Three countries possess an endogenous wage determination process, so that the choice of exchange‐rate regimes has real consequences. This arrangement creates serious difficulties for the small country. The paper evaluates the relative effectiveness of options for the small country, taking account of endogeneity of wage determination. Complete float of the small country and the currency basket pegging both present promising alternatives, but the complete float is likely to be best.
A Theoretical Model of Financial Crisis
Authors: Chan‐Lau Jorge A. , Chen Zhaohui
Published: March 2003

The paper develops a new model of private debt financing with an inefficient financial system at its core, where inefficiency is characterized by costly loan monitoring. The model suggests a mechanism that generates the following series of events: a period of low capital inflow despite high rates of economic growth (capital inflow inertia), as observed in the take‐off era in the Asian tiger economies; followed by a sudden acceleration of capital inflow (as seen in the 1990s); and then by a crisis, which is defined as a large reduction in the amount of loans intermediated by the financial system (i.e., a large capital outflow or credit crunch). Under certain conditions, financial crisis can occur even when economic fundamentals and market sentiment change only slightly. Unlike most credit rationing models, the results presented here do not hinge on the assumption of asymmetric information. The model also provides guidance about the appropriate policy responses to an imminent crisis.
Pricing‐to‐Market Behavior: Japanese Exports to the US, Asia, and the EU
Authors: Sasaki Yuri Nagataki
Published: March 2003

The paper examines the pricing‐to‐market (PTM) behavior of Japanese exporters in the US, Asian, and EU markets. Empirical evidence shows that PTM elasticity is highest to the US market. This matches the in‐tuitive reasoning that the US market is more competitive than the EU and Asian markets for Japanese exporters. Furthermore, PTM elasticities estimated in this paper using expected exchange rates are positive but their amounts are smaller than PTM elasticities estimated by previous studies with actual exchange rates. The difference may be due to the fact that the invoice currency for most Japanese exports is the US dollar.
Globalization, Lobbying, and International Environmental Governance
Authors: Johal Surjinder , Ulph Alistair
Published: March 2003

Globalization may require supranational coordination of environmental policies to prevent strategic policy competition weakening environmental standards. This raises concerns about a democratic deficit at the supranational level, and the possibility of capture by special interest groups. The authors develop a model in which environmental policy can be set at the national or supranational level. Governments at each level act in the interests of the group they represent, and interest groups lobby to influence the probability of getting their type of government elected. Using asymmetries in lobbying costs, the authors analyze the effects of a democratic deficit and differential access to influence by different interest groups on the welfare of groups and nations. The paper shows: (i) asymmetries may have unexpected effects; (ii) asymmetries have greater effect when policy is set at the national rather than supranational level; and (iii) despite asymmetries groups and nations are better off when policy is coordinated at the supranational level.
Financial Development and the Sensitivity of Stock Markets to External Influences
Authors: Dellas Harris , Hess Martin K.
Published: March 2003

The paper investigates how the relative contribution of external factors to stock price movements varies with the degree of financial development. It is found that financial development makes stock markets more susceptible to external influences (both financial and macroeconomic). Interestingly, this effect is present even after having accounted for capital controls and international trade effects.
Smuggling and Bhagwati’s Nonequivalence Between Tariffs and Quotas
Authors: Larue Bruno , Lapan Harvey E.
Published: March 2003

The authors extend Professor Bhagwati’s analysis about the nonequivalence between trade policy instruments when domestic production is monopolized and the terms of trade are endogenous, by allowing for smuggling. They show that the dominance of the ad valorem tariff over the quota is not robust. Tariffication can lower welfare even when the level of illegal imports is quite small. However, tariffication with a specific tariff is always beneficial because the specific tariff dominates the ad valorem tariff and the quota with or without smuggling. Smuggling (or the threat) also tends to lower the second–best tariff/quota, and increases welfare when imports are restricted by a quota, but lowers it under a tariff.
European Nominal and Real Convergence: Joint Process or Rival Dynamics?
Authors: Carré Martine
Published: March 2003

Recent empirical studies have revealed that the convergence speeds of nominal and real variables are fairly different. This paper studies the temporal evolution of the mutual influence between the convergences of a nominal and of a real variable. It refers first to σ‐convergence analysis. In order to compare nominal and real paths, the evolutions of the cross‐sectional variances of the two variables are connected. Then, nominal and real convergence processes are studied, as reciprocally conditioned within the same system. Nominal and real convergence were negatively correlated in the 1980s, while the 1990s have been characterized by a simultaneous convergence movement.
The Impact of a Rapidly Expanding Service Sector on Private Office Property: The Case of Hong Kong
Authors: Jayantha Wadu Mesthrige , Lau Stephen S.Y. , Ganesan Sivaguru
Published: March 2003

Hong Kong’s economy has undergone a remarkable transformation over the past two decades. The rapid expansion of the service sector is a major outcome. Within the services sector, the finance, insurance, real estate (FIRE) and business services sub‐sector is the most influential and also the major source of generating demand for office space in the economy. This paper examines how the rapid expansion of the FIRE and business service sub‐sector influences new office construction. Using the Engle‐Granger (1987) methodology for cointegration and error correction mechanism (ECM), the causal relationships between growth of sub‐sectors of the services sector and the new office space construction were explored. The FIRE and business services sub‐sector growth is shown to be cointegrated with new office space construction. The paper reports empirical findings based on a sample survey on location and quality of space. The study reveals that the growth of the FIRE and business service sector has influenced office space development in terms of location of space, per capita space and the type and quality space during 1981‐2000.
A CGE Approach to Measuring the Sectoral Contribution to an Economy: An Application to Western Australian Agriculture
Authors: Ahammad Helal
Published: March 2003

Typically, sectoral contribution to an economy is estimated by measures such as shares in gross domestic/regional product, employment and exports. According to these measures, agriculture's contribution declines as the economy grows. However, the indirect contribution of the sector is likely to rise due to the expansion of agriculture–based processing activities in the process of economic growth. Input–output multiplier analysis is often used to capture such flow–on contributions of the sector. This paper proposes to use a computable general equilibrium framework to estimate the direct as well as indirect contributions of agricultural growth in an economy. It also develops a methodology to distinguish the broader effects of agricultural output growth by source — input growth and productivity growth. The proposed methodologies are illustrated by applying these to analyze the contribution of agriculture to the economy of Western Australia, an agriculture and resources based state of Australia. The results for Western Australia suggest that the indirect benefits of agriculture exceed its direct contributions and that the contributions made by enhancing productivity in agriculture are indeed substantial. Importantly, the broader contribution of the agriculture sector depends critically on the specific source of the sectoral growth — input or productivity growth.
Comprehensively Questing for Jesus?
Authors: Goodacre Mark
Published: March 2003

Book reviewed in this article:

Gerd Theissen & Annette Merz The Historical Jesus: A Comprehensive Guide
Contingency, Technē and Alterity: The Making of Religious Studies
Authors: Kenneson Philip
Published: March 2003

Book reviewed in this article:

Jon R. Stone (ed), The Craft of Religious Studies
Recent Books in ... New Testament Studies
Authors: Carleton Paget James
Published: March 2003

Books reviewed

Gerd Lüdemann, Virgin Birth? The Real Story of Mary and Her Son Jesus

C. E. B. Cranfield, On Romans and Other New Testament Essays

Joseph A. Fitzmyer, To Advance the Gospel

Walter Schmithals The Theology of the First Christians

William J. Larkin Jr and Joel F. Williams (eds), Mission in the New Testament: An Evangelical Approach
New Religious Movements in Global Perspective: Views from the Mainstream
Authors: Pinn Anthony B.
Published: March 2003

Books reviewed in this article:

John A. Saliba, Geoffrey Chapman, Christian Responses to the New Age Movement: A Critical Assessment

Bryan Wilson and Jamie Cresswell (eds), New Religious Movements: Challenge and Response
Revising Jewish History: The Effect of the First Two Centuries of Christian Rule
Authors: Collins Nina L.
Published: March 2003

Book reviewed in this article:

Gunter Stemberger, Jews and Christians in the Holy Land: Palestine in the Fourth Century
A Creative Exposition of Halakhah: Jacob Neusner's Encyclopedia of the Law of Judaism
Authors: Faur José
Published: March 2003

Book reviewed in this article:

Jacob Neusner, The Halakhah: An Encyclopaedia of the Law of Judaism
The Return of Religion to North American Public Education?
Authors: Webb Stephen H.
Published: March 2003

Books reviewed:

Jon H. Roberts and James Turner, The Sacred and Secular University

D. G. Hart, The University Gets Religion, Religious Studies in American Higher Education

Russell T. McCutcheon, Manufacturing Religion, The Discourse of Sui Generis Religion and the Politics of Nostalgia
The Guild Speaks Again
Authors: Norton O.P. Gerard J.
Published: March 2003

Books reviewed in this article:

A. D. H. Mayes (ed), Text in Context: Essays by Members of the Society for Old Testament Study
Seventeenth Century Quaker Pacifism
Authors: Guiton Gerard
Published: March 2003

Book reviewed in this article:

Meredith Baldwin Weddle, Walking in the Way of Peace: Quaker Pacifism in the Seventeenth Century
One Cow, One Vote?
Authors: Albæk Svend , Schultz Christian
Published: March 2003

We study investment decisions in a farmers' cooperative. Farmers sell their products through the cooperative. Before production takes place the cooperative has to decide on an investment. We study whether voting on investment leads to efficient investment decisions. The answer depends on how the number of votes and the cost of the investment are distributed among the farmers. It is shown that in a variety of settings, there is no reason to suppose that voting rules favoring large farmers —“one cow, one vote” rules — are more efficient than simple majority rule.
Limits to Institutional Reforms
Authors: Eggertsson Thráinn
Published: March 2003

The essay draws on the theory of (macro)economic policy, as it has evolved, to discuss implicit policy determinism in the new economics of institutions. The extension of rational‐choice methods to new levels of analysis, such as micropolitics, macropolitics, political macroeconomics, and microfoundations of cooperation, has apparently reduced the policy choice set and diminished the role of experts. All outcomes reflect constrained maximization by rational agents. The essay argues, however, that scarcity of knowledge leads to incomplete and variable policy models, and that competition among policy models creates a role for experts in social change.
Domestic Jobs and Foreign Wages
Authors: Hatzius Jan
Published: March 2003

It is plausible that the labour demand decisions of multinational corporations (MNCs) depend not only on domestic, but also on foreign labour costs. This hypothesis is tested by estimating labour demand equations for a sample of Swedish MNCs. Indeed, higher foreign costs increase an MNC's Swedish employment and reduce its foreign employment. As MNCs become more important in many OECD countries, the responsiveness of domestic output and employment to foreign labour costs is likely to increase.
Rehabilitating Weak Complementarity
Authors: Neill Jon R.
Published: March 2003

Using weak complementarity to determine willingness to pay for nonmarket goods is problematic. This note offers a procedure for determining an agent's marginal willingness to pay for a nonmarket good under this assumption that mitigates these problems.

JEL Classification: D6; H4; Q2
Economic and Social Security in the Twenty‐first Century, with Attention to Europe
Authors: Dreze Jacques H.
Published: March 2003

A partly heuristic attempt is made to explore long‐run policies aimed at a second‐best compromise between ex ante risk‐sharing efficiency and ex post productive efficiency. Wage subsidies for low‐skilled workers financed by taxes on high wages are advocated, together with improved risk sharing between capital and labour, between generations and among the countries belonging to EMU. The scope of the policies advocated is limited by considerations of moral hazard, time consistency and fiscal competition. Moreover, estimates of some key economic parameters remain very imprecise. Several avenues of further research are identified.
Self‐fulfilling Currency Crises and Central Bank Independence
Authors: Bensaid Bernard , Jeanne Olivier
Published: March 2003

We develop a model of a fixed exchange rate peg arrangement derived from the Barro–Gordon model of rules versus discretion. It is shown that the fixed peg is vulnerable to self‐fulfilling currency crises in which the unemployment rate increases, the credibility of the rule decreases, but, paradoxically, the reputation of the policy‐maker improves. Delegating monetary policy to an independent central banker does not prevent this type of crisis from arising, and can even make it more costly.

JEL Classification:
F3; F4
Performance Standards and Incentive Pay in Agency Contracts
Authors: Sherstyuk Katerina
Published: March 2003

When the presence of limited liability restricts a principal from imposing monetary fines on an agent in case of poor performance, the principal might use other kinds of punishment threats to deter the agent from shirking. We show that under the optimal contract in this case, the principal sets a performance standard and punishes the agent if the standard is not met, but rewards the agent on a profit‐sharing basis if the standard is significantly exceeded. The optimal choice of performance standards for such contracts is discussed. It is shown that punishment threats, although inefficient, often help the principal to discipline the agent.

JEL classification: D82
Repeated Interaction and the Public Provision of Private Goods
Authors: Thum Claudio , Thum Marcel
Published: March 2003

The literature suggests that governments can use in‐kind transfers to design efficient and targeted redistribution schemes if individual incomes are not directly observable. We investigate the extent to which the self‐selection property of in‐kind transfers carries through if redistributive transfers are made repeatedly. In a two‐period setting, the government may gain information about the individuals' incomes in the first period and exploit this information for making targeted transfers in the second‐period. This, however, also triggers changes in the individuals' behavior. If the government can commit to its future policy, the least cost policy may involve randomization between cash and in‐kind transfers. Without commitment, the dynamic setting works against the government's interest. It may no longer be able to use in‐kind transfers to generate information about the individuals' types.

JEL classification: H42; H2
Is the Efficiency Wage Efficient? The Social Norm and Organizational Corruption
Authors: Chang Juin‐jen , Lai Ching‐chong
Published: March 2003

The effectiveness of efficiency wage incentives is often jeopardized by perverse organizational corruption. We model organizational corruption as a phenomenon of social interaction and relate the substantial psychological role characterizing the social norm to the corruption problem. We find that if the status quo bribery rate within the firm is high, social norms can no longer serve as a sufficient sanction against a corrupt supervisor; pandemic organizational corruption tends to generate a critical mass effect—the snowball effect—which intensifies the corruption effect. This intensified effect, due to the snowballing character of social norms, may more than offset the usual incentive effect of wages, resulting in more widespread shirking in the firm.

JEL classification: D82; J41
Measuring Structural Unemployment: NAWRU Estimates in the Nordic Countries
Authors: Holden Steinar , Nymoen Ragnar
Published: March 2003

The non‐accelerating wage rate of unemployment (NAWRU indicator), used by the OECD as a measure of structural unemployment, has risen for the four Nordic countries Denmark, Finland, Norway and Sweden. In this paper we present stable empirical wage equations for the same countries over the period 1964–1994, in sharp contrast to the increased NAWRU estimates. The instability of the NAWRU estimates is an artefact of a misspecified underlying wage equation, and not due to instability in wage setting itself.

JEL classification: E24; E31; E64; J51
Central Wage Setting under Multiple Technological Equilibria: A Mechanism for Equilibrium Elimination
Authors: Roberts Mark A.
Published: March 2003

Instituting an initial round of centralized wage setting before an ultimate round of decentralized wage bargaining may actually raise employment. A general multi–equilibrium model is set up with strategic complementarities in the implementation of a new technology through aggregate demand spillovers. In this model, centralized wage setting to establish an outside option wage, which is selectively binding on lo–tech firms, may achieve the “big push” to a hi–tech general equilibrium with higher employment, output, wages and profits.
Optimal Degrees of Transparency in Monetary Policymaking
Authors: Jensen Henrik
Published: March 2003

According to most academics and policymakers, transparency in monetary policymaking is desirable. I examine this proposition in a small theoretical model emphasizing forward–looking private sector behavior. Transparency makes it easier for price setters to infer the central bank’s future policy intentions, thereby making current inflation more responsive to policy actions. This induces the central bank to pay more attention to inflation rather than output gap stabilization. Then, transparency may be disadvantageous. It may actually be a policy–distorting straitjacket if the central bank enjoys low–inflation credibility, and there is need for active monetary stabilization policy.

JEL classification: E42; E52; F58
Moral Values Assigned to Real‐Life Events
Authors: Biel Anders , Fransson Niklas , Dahlstrand Ulf
Published: March 2003

A conceptual framework entailing a description of the content of moral values was proposed and applied to everyday events that people had experienced as unrighteous. In the conceptual framework, the content of moral values is assumed to be mentally represented both as norms and as schemas. The norm specifies how one should or should not act. The schemas consist of prominent features (elements) of events associated with a norm and more detailed information specifying concrete types of elements labeled attributes. In Study 1, 125 events experienced as unrighteous were collected from a sample of 86 students. Based on descriptions by a nationally representative sample of 567 respondents, the described events were classified in eight groups corresponding to different moral values. In Study 2 the classified events were shown to differ between these groups with respect to prominent features contributing to a moral reaction.
The Ambiguity of Covariation: A Conceptual Note
Authors: Smedslund Jan
Published: March 2003

Three dimensions of propositions, the factual, the epistemic and the modal, and their relationships, are described. The five factor model of personality is based on correlations between ordinary language items. The terms of this language are fuzzy and context‐dependent in meaning, and, therefore, unsuitable for epistemic/modal analysis. Hence, one cannot decide to what extent FFM is a priori versus empirical. Only a scientific language, with explicitly stated primitives, axioms, and definitions will permit such a decision.
The Importance of Item Selection in “Knew‐It‐All‐Along” Studies of General Knowledge
Authors: Winman Anders
Published: March 2003

This study was designed to investigate the effects of item sampling on hindsight bias in experiments using general knowledge material. The results show that the use of random versus traditional experimenter‐selected item samples can have different effects on hindsight bias. In a within‐subjects study almost twice as many items in a random sample were connected with a reversed effect rather than with a traditional hindsight bias. The same items that resulted in overconfidence in foresight lead to a higher degree of hindsight bias than others. The results suggest that earlier findings of unusually large hindsight effects with general knowledge tasks may be explained by the selection of items used. No hindsight effect was found on confidence scores in a within‐subjects design, but was obtained in a between‐subjects design. Results suggest that the use of a within‐subjects design itself can moderate hindsight bias by familiarizing subjects with the task. The study shows the importance of two conditions for decreasing the hindsight bias: (1) The use of randomly sampled items, and (2) The use of a within‐subjects procedure. When these conditions were met, the “knew‐it‐all‐along effect” was completely eliminated.
Open‐field nidus and pullusindices in Mus Musculus L.
Authors: Ewalds‐Kvist S. Béatrice M. , Selander Ritva‐Kajsa
Published: March 2003

Swiss albino mice (Mus Musculus L.) were studied in an open field (OF). The question whether laboratory rodents were more attracted to a nest equipped with familiar odoriferous cues from the home‐cage bedding or to signals of an unfamiliar newborn pup inserted in the OF was addressed. The results of the three quantitatively recorded OF behaviors, ambulation, retrieval and radial latency, indicated that in females both ambulation and retrieval were enhanced by the presence of a pup in a nestless field; in males locomotion was suppressed by a nest in a pupless OF. In the case of both sexes radial latency was determined by the OF position of a nest. A comparison between the two qualitative assessments, the nidus and pullus indices, yielded that the sex of the adult and the OF positions of both targets equally impacted attraction towards both nest and pup.
The role of facial approach signals in speechreading
Authors: Johansson Karina
Published: March 2003

Facial approach signals in speechreading were studied in three experiments. Experiment 1 investigated effects on speechreading performance of different emotional content (sad and happy) in sentences combined with facial expression. The experiment also investigated the effect of script information on speechreading of emotionally charged sentences. In Experiment 2 the effect of emotional sentences on speechreading performance was investigated when no or very limited script information was given. Happy sentences were superior to sad sentences, except in the sad script where no difference between sad and happy was found. Experient 3 investigated the effect of articulation (overarticulation vs. underarticulation) on speechreading of emotional sentences. Happy sentences were again generally superior to sad sentences. As happy sentences were superior to sad sentences both when overarticulated and underarticulated the superiority of the happy sentences was explained in light of the approach hypothesis.
Differential validity of the Gottschalk‐Gleser Anxiety Scales: is gender a moderator variable?
Authors: Suslow Thomas
Published: March 2003

It can be hypothesized that affects like anxiety can be measured by content analysis of speech due to the phenomenon of mood congruent memory, which is found predominantly in females. To assess the effect of gender on the validity of the Gottschalk‐Gleser Anxiety Scales, the standard procedure for obtaining verbal samples was followed and self‐report measurements of comparable emotional constructs were applied concurrently. Measures of state and trait emotions were administered to 25 female and 25 male university students. In the female group 18 significant convergent validity coefficients were found. For males, content analytic anxiety scores showed four significant correlations with concurrent self‐report scales. These results suggest that content analytic anxiety scores from female subjects may allow a more accurate prediction of state and trait emotions than anxiety scores from male subjects. Thus, gender might have a differential effect on the validity of the Gottschalk‐Gleser Anxiety Scales.
“Bipolar groupthink”: Assessing groupthink tendencies in authentic work groups
Authors: Rosander Michael , Stiwne Dan , GranstrÖM Kjell
Published: March 2003

Research on regressive group processes such as Janis’ (1982) “groupthink” phenomenon has rarely focused on work groups in authentic settings. In this study, teams from six different organisations (n=308) were studied by using a groupthink questionnaire constructed in accordance with the symptoms of groupthink described by Janis. It was hypothesised that groupthink could be described as a bipolar construct identifying either an omnipotent or a depressive variant of a group’s delusions about its own and other groups’ features. The questionnaire showed reasonably good reliability as a whole and a factor analysis identified three factors in line with the proposed theoretical model in which the two different types of groupthink can be distinguished. We propose that any group might have a tendency or predisposition to react in either of the two directions during provocative circumstances. The six different organisations exhibited different types of groupthink to a varying degree. A religious sect was the one most characterised by omnipotent groupthink, while a technological company and a psychiatric team seemed to be the ones with most features of depressive groupthink.
Is it futile to do empirical research?
Authors: VOLLMER FRED
Published: March 2003

In this paper I discuss Gergen’s social constructionist views on the relation between theory and observation. My conclusions are: 1) Though theories may not be data driven, there are objective (and not just cultural) constraints on how reality can be described. There are, moreover, some beings who dictate their own descriptions. Those beings are persons. 2) Empirical meaning is an essential aspect of any scientific theory. Scientific theories are not tales about imaginary, fictional beings. Scientific theories refer to phenomena in the real world. Such phenomena are not social constructions. 3) Data determine how valid a theory is, and why some theories are better than others.
Chunk hierarchies and retrieval structures: Comments on Saariluoma and Laine
Authors: Gobet Fernand
Published: March 2003

The empirical results of Saariluoma and Laine are discussed and their computer simulations are compared with CHREST, a computational model of perception, memory and learning in chess. Mathematical functions such as power functions and logarithmic functions account for Saariluoma and Laine’s correlation heuristic and for CHREST very well. However, these functions fit human data well only with game positions, not with random positions. As CHREST, which learns using spatial proximity, accounts for the human data as well as Saariluoma and Laine’s correlation heuristic, their conclusion that frequency‐based heuristics match the data better than proximity‐based heuristics is questioned. The idea of flat chunk organisation and its relation to retrieval structures is discussed. In the conclusion, emphasis is given to the need for detailed empirical data, including information about chunk structure and types of errors, for discriminating between various learning algorithms.