Timeliness of Farming Operations as a Determinant of Equilibrium Wages with Excess Labor Supply: A Strategic Bargaining Approach

Data from predominantly rural economies show that, despite persistent involuntary unemployment, wages have been rising. However, the theoretical literature offers a scenario of largely rigid wages. This paper proposes a theory of strategic bargaining between individual laborers and farmers based on a characteric of production that is unique to farming, namely, sensitivity of output to timeliness of farmwork. The key argument is that despite risk of unemployment and threat of wage undercutting by those unemployed, a laborer in a competitive market setting can credibly threaten to refuse "low-wage" offers and impose some of the cost of delay on farmers.     

ROLE OF THE INTERNATIONAL GOLD STANDARD IN PROPAGATING THE GREAT DEPRESSION

I do not claim in this paper that the international gold standard was a principal cause of the Great Depression. Instead, I explore the events that allowed the world to slip deeper into depression despite the gold standard. The volatility of international short-term capital flows surely contributed greatly to the Depression. I argue that this volatility was exacerbated—rather than ameliorated—by the international gold standard. The reason is that despite governments' legal assurances that they are committed to a gold standard, speculators never perceive the terms of gold parity as immutable. This statement holds with increasing force when one observes the precarious status of government debts and international finance during the 1920s. This reality renders a gold standard vulnerable to precisely the type of volatility in international capital markets that made the 1931 downturn more severe.     

The defence industry as a locomotive for technological renewal in Russia: are the conditions in place?

This article examines the extent to which the conditions for successful military to civilian technological spin-offs are in place in Russia. This is important because Russian authorities use the potential for such spin-offs as one of several arguments for justifying large defence expenditure. Six conditions are identified, all of which are derived from the theoretical literature on the transfer of technology from the military to civilian sector. We conclude that despite some government efforts to generate spin-offs by providing technology brokering, and despite some joint military–civilian technological development taking place within defence industry enterprises, most of the conditions required to generate substantial technology transfer from the military to civilian sector are not present in Russia.     

Why is mobile capital taxed?

The government for a jurisdiction has both capital and labor taxes at its disposal. It taxes mobile capital to finance the public good despite the desire to attract capital and despite the tax on immobile labor if capital incomes are distributed more unequally than labor incomes among the residents of the jurisdiction. The result extends to progressive taxes and to pure redistribution.     

Investment allocation: A comparison of the reform experiences of Hungary and Yugoslavia

Both Yugoslavia and Hungary, despite reform efforts, have continued to exhibit investment cycles. An analysis is presented of why the Yugoslav and Hungarian experiences have been so similar despite major institutional differences. An examination of three different capital allocation systems in Yugoslavia identifies both institutional and behavioral factors that undermine reform efforts and reproduce investment cycles not only in Yugoslavia, but also in Hungary and other socialist economies.     

The politics of growth: Can lobbying raise growth and welfare?

We consider a setup where lobbyist firms undertake contributions to an office-motivated policy maker in exchange for profit increasing regulations, in a general equilibrium model of R&D-driven growth. We find that, despite increasing concentration—which leads to higher prices and less varieties—lobbying may stimulate growth and increase welfare by means of an expansion in aggregate demand if its real costs are small. This conclusion is supported by a simple calibration exercise.     

Visionary projects: a viable rationale for human space-flight?

Today's prevailing geo-political and socio-economic climate is proving unfavourable towards justifying on-going and future human space-flight programmes. Traditionally cited benefits, such as scientific and aconomic progress or political advantages, are widely deemed insufficient reasons for spending considerable amounts of public funds. A rationale for human space-flight, evoking visions such as exploitation of extraterrestrial resources or human exploration of space, has to cope with an unavoidable dilemma: attractive as they may appear, these projects are fraught with many grave uncertainties and risks. This paper attempts to answer the question over what, if any, significance such visionary projects may assume in justifying the continuation of human space-flight activities. We argue that, despite as yet unanswerable technological and economical questions, and despite the extremely long time-frames involved, it seems reasonable and, hence, justified to keep the option of being able to solve by means of humans in space the impending energy crisis in the coming century.     

Remittances during crises

This paper begins by examining the characteristics and determinants of remittances sent from Germany to ex‐Yugoslavia, and then takes a first look at how they were affected by the war and later political and economic crises in the first half of the 1990s. The findings tentatively suggest that the propensity to send among ex‐Yugoslavs increased in the early 1990s, despite a breakdown in formal remittance channels and in contrast with the roughly stable and even decreasing propensity to send among Turkish guest workers.     

Market depth,domestic investors and price monotonicity violations

We re-examine the monotonicity violations of option price dynamics considering the roles of market depth and domestic investors. Violations caused by option price movements in conflict with underlying price movements tend to occur less frequently as the market depth increases, especially in the case of out-of-the-money options. In contrast, violations caused by option prices that remain sticky despite underlying price changes occur more frequently as the market depth increases. Both of these relationships are amplified by domestic investors.     

Price gouging versus price reduction in retail gasoline markets during Hurricane Rita

Using extensive hand-collected retail gas prices, I show that there was no price gouging in Bryan/College Station during Hurricane Rita. Instead, the retail price markup dropped by twelve cents during the hurricane, despite most stations running out of gas.     

Endogenous market structure and the cooperative firm

When the threat of entry by followers includes cooperative firms, the maximum fixed cost that a profit maximizing leader can endure is endogenous. The aggressive strategy required for entry-deterrence curtails the leader’s expected profit and can discourage its initial entry. In such circumstances a cooperative firm may yet be viable, despite having a cost handicap and no first-mover advantage.     

Regulatory Compliance with Costly and Uncertain Litigation

Harrington (1988) and more recent papers by Heyes and Rickman (1999), Livernois and McKenna (1999), and Heyes (1996) have attempted to explain how a relatively large fraction of firms are thought to be in compliance with environmental regulations despite the fact that expected penalties for these violations are deemed rather low. This paper offers an alternative explanation for the interesting paradox by incorporating costly and uncertain litigation.     

Competition,economies of scale,and diversity of firm sizes

This paper presents an empirical example in which small firms are able to compete by specializing, without monopolistic conduct, despite economies of scale. The viability of small commercial banks in Illinois is established both by casual observation and by a finding of constant returns to scale, not correcting for specialization. A second specification of the cost function, correcting for specialization, exhibits economies of scale, suggesting that specialization is the means by which small banks survive. Monopoly conduct is ruled out by a Rosse–Panzar test, rejecting the alternative hypothesis that monopoly power has allowed inefficient banks to survive.     

International migration and “educated unemployment”

This paper provides a novel explanation of “educated unemployment”, which is a salient feature of the labor markets in a number of developing countries. In a simple job-search framework we show that “educated unemployment” is caused by the prospect of international migration, that is, by the possibility of a “brain drain”. In addition, the analysis shows that a developing country may end up with more educated workers despite the brain drain and educated unemployment.     

Labor Market Effects of Economic Integration: The Impact of Re-Unification in German Border Regions

Abstract. This paper exploits the significant reduction in impediments to labor mobility in the process of German re-unification in order to identify labor supply shocks in the West German labor market. The focus is on the quasi-experiment of the border removal in the regions situated at the German–German border that faced a massive increase of cross-border labor supply. The results indicate that despite a gain in employment, the border removal was accompanied by a decline in wages and an increase in unemployment relative to other West German regions.     

Quid pro quo

This paper attempts to shed some new light on two puzzles about Chinese economy: Rapid economic growth despite pandemic corruption; dramatic development of the private sector despite ‘ownership discrimination' in financial resource allocation. In our model, the productive bribe facilitates the more efficient private firm to obtain the scarce financial resource, either from the bank or from the state-owned enterprise, and corrects the initial allocation distortion. Meanwhile, our model also generates the distortionary and the predatory bribes which hurt the economy.     

Patent breadth as effective barrier to market entry

Firms protecting their invention by a patent have the legal right to exclude competitors from using the patented matter. However, despite patent protection, competitors could enter the market by ‘inventing around’. Provided that inventing around becomes more difficult the broader a patent is, the strength of protection against market entry increases in patent breadth. Building on a theoretical benchmark formalizing the relationship between varying patent breadth and the threat of market entry, our empirical analysis supports the prediction that inventors perceive broad patents as effective market entry barriers.     

Determinants of spectator no-show behaviour: first empirical evidence from the German Bundesliga

The analysis of stadium attendance demand has a long tradition in the economic literature. However, despite its evident merits, this previous research has been critiqued at several levels, in particular for relying on a suboptimal demand proxy, i.e. published attendance data. In this short note, we address these shortcomings by exploring a highly unique data set containing official information on spectators’ decisions of whether or not to physically attend 704 German football Bundesliga games played between August 2014 and January 2017.     

Technology and the Life Cycle of Cities

During times of major technological change, leadingcities are often overtaken by upstart metropolitan areas. Suchupheavals may be explained if the advantage of established urbancenters rests on localized learning by doing. When a new technologyis introduced, for which this accumulated experience is irrelevant,older centers prefer to stay with a technology in which theyare more efficient. New centers, however, turn to the new technologyand are competitive despite the raw state of that technologybecause of their lower land rents and wages. Over time, as thenew technology matures, the established cities are overtaken.     

Employment gains from minimum‐wage hikes under perfect competition: A simple general‐equilibrium analysis

Contrary to conventional wisdom, higher minimum wages may lead to greater levels of employment under perfect competition. We demonstrate this possibility in a simple general‐equilibrium model of involuntary unemployment, with two goods produced by two factors and consumed by two representative households. Within our model, hiking a minimum wage redistributes income between heterogeneous consumers. This redistribution may create an excess demand for the labor‐intensive good, and hence increase total employment to restore equilibrium, despite the fact that every firm becomes less labor intensive.