THE MAKING OF ECONOMIC POLICY

Books reviewed in this article:
Rosalind Levacic (1987) Economic Policy-Making: Its Theory and Practice.
Paul Whiteley (1986) Political Control of the Macro-Economy.
Douglas A. Hibbs Jr. (1987) The Political Economy of Industrial Democracies.
Wyn Grant with Jane Sargent (1987) Business and Politics in Britain.
Michael Moran (1986) The Politics of Banking     

CHOICE UNDER UNCERTAINTY

Books reviewed in this article:
Jacques Drèze (1987) Essays on Economic Decisions under Uncertainty.
W. Kip Viscusi and Wesley Magat et al (1987) Learning about Risk.
J. L. Ford (1987) Economic Choice under Uncertainty: a Perspective Theory Approach.
Isaac Levi (1986) Hard Choices: Decision Making under Unresolved Conflict.     

homo œconomicus

Vancouver was the occasion of the first meeting of all three editors of Economic Affairs since its founding in 1980. The above photograph shows Arthur Seldon (front centre), Martin Anderson (left) and Robert Miller - editors in the years 1980–1987, 1987, and 1987 to date respectively, Also present: Russell Lewis (right) the current features editor.     

Trade Affected Workers in the Service Sector

A bstract . Using input output data for 1987 and 1990, this study identified those groups of service sector workers most vulnerable to trade-related employment displacements. Relative to other industry groups, workers (both black and white) in service industries which experienced an increase in (positive) net trade-related employment, were more likely to be male, elderly (over 65 years of age), less educated (high school graduates) and unskilled (laborers). In contrast, service industries which suffered a decline in (positive) net trade-related employment between 1987 and 1990, were relatively more skill-intensive (as measured by the share of college educated workers, scientists, engineers and managers in the labor force) , and more likely to employ women, married couples and individuals in the 25 to 35 age bracket. Union members on the other hand, were overrepresented in service industries which suffered net trade–related employment losses in 1987 and 1990. The latter industries, however, experienced an improvement over the period.     

Market reaction to uniform capital adequacy guidelines in the banking industry

In this paper the authors assess the stock market reaction to information on uniform capital requirements that was disseminated on four different dates: September 29, 1987; December 7, 1987; December 10, 1987; and July 11, 1988. The share prices of U.S. money center banks were adversely affected by the December 7, 1987, announcement regarding proposals to make regulatory standards more uniform. The share prices of U.S. superregional banks were not affected by this announcement. The difference in degree of response is attributed to disparate capital positions between the two groups of banks. In order to meet the new guidelines, U.S. money center banks may need to implement policies (such as issuing new stock) that are viewed unfavorably by the market.     

Bonus sharing in Soviet economic reforms

Revenue sharing, i.e. workers' remuneration according to enterprise performance, has been advocated as a means against labour shortage (in socialist economies) and also as a solution to unemployment problems (in capitalist economies), with reference to the effects of revenue sharing upon workers' incentives and macro-economic conditions respectively. Compared to existing models of Soviet bonus schemes of 1965, 1986 and 1987 inclusion of these two features changes the conclusions concerning optimum factor inputs. The 1987 enterprise law may stimulate more effort as well as less employment     

Note on discrete a-unimodality

An interpretation is given of ABOUAMMOH'S (1987) discrete analogue of the (one-dimensional) definition of a-unimodality by Olshen and Savage. The concepts are of some interest in the context of selfdecomposability.     

THE NEW PALGRAVE: A DICTIONARY OF ECONOMICS

Books reviewed in this article:
John Eatwell, Murray Milgate and Peter Newman (editors) 1987 The New Palgrave: A Dictionary of Economics     

1949-1987年(重)工业优先发展战略下的中国城市社会空间研究--以广州市为例

1949-1987年间实施的(重)工业优先发展战略奠定了社会主义中国城市社会空间的基本格局,并决定了社会主义转型时期(1987-)城市社会空间演进的底色."城市单位化"和"单位城市化"导致城市社会空间层序完全由(重)工业优先发展战略所决定,人因所属单位的不同而分异,城市因单位而发生社会空间的分化,该研究有助于解析当前社会经济转型期中国城市社会空间演进的方向.     

Book Reviews

Book reviewed in this article: Beechey, V. and Perkins, T. 1987: A matter of hours: women, part-time work and the labour market. Darden, J.T., Child Hill, R., Thomas, J. and Thomas, R. 1987: Detroit: race and uneven development. Duncan, S. and Goodwin, M. 1988: The local state and uneven development. Eades, J. editor, 1987: Migrants, workers and the social order. Henderson, J. and Karn, V. 1987: Race, class and housing: inequality and the allocation of public housing in Britain. Hughes, J.W. and Sternlieb, G. 1987: The dynamics of America's housing. Jenkins, R. and Solomos, J. editors, 1987: Racism and equal opportunity policies in the 1980s. Linge, G.J.R. editor, 1988: Peripheralisation and industrial change. Lubeck, P.M. 1987: Islam and urban labour in northern Nigeria: the making of a Muslim working class. Massey, D. 1987: Nicaragua. Matzerath, H. 1985: Urbanisierung in Preußen 1815–1914. Page, E.C and Goldsmith, M.J. editors, 1987: Central and local government relations: a comparative analysis of west European unitary states. Hoffman-Martinot, V. 1987: Finances et pouvoir local: l'expérience allemande. Pradilla, E. 1984: Contribucion a la critica de la teoría urbana: del espacio a la crisis urbana. Pradilla, E. 1987: Capital, estado y vivienda en América Latina. Reade, E. 1987: British town and country planning. Savage, M. 1987: The dynamics of working-class politics: the labour movement in Preston 1880–1940. Teague, P. editor, 1987: Beyond the rhetoric: politics, the economy and social policy in Northern Ireland. Wilson, G. 1987: Money in the family.     

On the modification and predictive validity of covariance structure models

The relationship between model modification and predictive validity in covariance structure models is studied. It is shown that a function of the modification index (MI) (Joreskog and Sorbom, 1986; Sorbom, 1989) is asymptotically equivalent to changes in the predictive validity of the model as measured by Akaike's (1973; 1987) information criterion (AIC). Given this equivalency, it is argued that competing models should be modified independently in substantively plausible directions. The choice among the modified competing models should be made via the AIC. However, given the unreliable nature of the modification index as a specification error search tool, it is argued that a combination of the MI and expected parameter change methodology advocated by Saris, Satorra, and Sorbom (1987) and Kaplan (1990a, 1990b) may be more useful for guiding specification error searches. Implications for modeling practice are discussed.     

MACROECONOMIC THEORY AND POLICY

Books reviewed in this article:
Olivier Jean Blanchard and Stanley Fischer (1989) Lectures on Macroeconomics.
Keith Cuthbertson and Mark P. Taylor (1987) Macroeconomic Systems.
Andrew Stevenson, Vinantonio Muscatelli and Mary Gregory (1988) Macroeconomic Theory and Stabilisation Policy.     

ON THE HISTORY AND METHODOLOGY OF ECONOMETRICS

Book reviewed in this article:
Darnell, A. C. and J. L. Evans (1990) The Limits of Econometrics
Epstein, R. J. (1987) A History of Econometrics
Morgan, M. S. (1990a) The History of Econometric Ideas     

Economically optimalc- andnp-control charts

In v. Collani (1981, 1986, 1987a and 1987b) simple procedures are developed to determine the approximately optimal economic design of control charts for measurements. Applying these procedures to the case of control charts for attributes, nomograms are obtained from which the approximately optimal design ofc-charts, i.e. charts for defects, is readily available. Furthermore it is shown that this method also provides good approximately optimalnp-charts, i.e. charts for defectives. Research supported by the DFG (Deutsche Forschungsgemeinschaft).     

Comment: ‘The causes of coal-mine accidents’, worker autonomy,and the myth of the small firm

Here Steve Tombs discusses an article pulished in this Journal (Vol 18 No 1 Spring 1987)–his comments are followed by the author's response     

Reorganizing a partnership efficiently

Review of Economic Design - We modify the partnership dissolution model pioneered by Cramton et al. (Econometrica 55:615–632, 1987) to consider the possibility that each partner has an...     

The Bargaining–sales‐delegation Game

This article revisits the managerial delegation literature led by Vickers ( 1985 ), Fershtman and Judd ( 1987 ) and Sklivas ( 1987 ) by introducing a bargaining mechanism between owners and managers over managerial contracts. It shows that the degree of bargaining interacts with the extent of product differentiation in determining whether the sub‐game perfect Nash equilibrium is sales delegation or profit maximisation. In contrast with the classical result, no sales delegation emerges and the typical prisoner's dilemma of the managerial delegation literature is solved. This holds in both contexts of Cournot and Bertrand rivalries. The article also provides results for the more general cases with heterogeneous managerial bargaining power and endogenous decisions of the owners regarding the bargaining power of the manager that should be or not be hired in a firm. Copyright © 2016 John Wiley & Sons, Ltd.     

SOME RECENT BOOKS ON UNEMPLOYMENT

Books reviewed in this article:
Wilfred Beckerman (ed.) (1986) Wage Rigidity and Unemployment, London: Duckworth
Peter E. Hart (ed.) (1986) Unemployment and Labour Market Policies
Richard W. Blundell and Ian Walker (eds) (1986) Unemployment, Search and Labour Supply.
John Hudson (1987) Unemployment After Keynes: Towards a New General Theory     

The stock market response to changing drug patent legislation: The case of compulsory licensing in Canada

Between 1969 and 1987 pharmaceutical companies holding patents in Canada were subject to immediate compulsory licensing. This study evaluates the stock market response to both the imposition of immediate compulsory licensing in 1969 as well as its subsequent revocation in 1987. Since the affected companies were multinational enterprises, we analyse the movement of share prices on the New York Stock Exchange. The results indicate that patent protection is viewed positively by the stock market, but only when measured with hindsight (in 1987). Our results are consistent with other studies that suggest that patent protection does allow the appropriation of gains from knowledge by firms in the pharmaceutical industry. Thus, pharmaceutical companies would benefit from international agreements to provide more stringent levels of patent protection.     

Book Reviews

Book reviewed in this article: Boyd, R.E., Cohen, R. and Gatkind, P.C.W. editors, 1987: International labour and the third world: the making of a new working class. Damesick, P. and Wood, P. editors, 1987: Regional problems, problem regions and public policy in the United Kingdom. Foner, N. editor, 1987: New immigrants in New York. Henderson, J. and Castells, M. editors 1987: Global restructuring and territorial development. Herlyn, U., von Saldern, A. and Tessin, W. editors, 1987: Neubausiedlungen der 20-er und 60-er Jahre. Ein historisch-soziologischer Vergleich. Ipsen, D., Glasauer, H. and Lasch, V. 1986: Markt und Raum. Die Verteilungswirkungen wohnungspolitischer Subventionsformen im städtischen Raum. Wallace, C. 1987: For richer, for poorer: growing up in and out of work.