Occupational Licensing in the EU: Protecting Consumers or Limiting Competition?

Occupational licensing regulations require workers in many different professions to obtain a special permit to work legally in their chosen field. Although professional associations argue that the only goal of professional licensing is to protect the public, occupational regulation may also reduce competition: for example, by reducing entry. This paper reviews the recent literature and policy developments on the subject, with a focus on the European Union.

     

From Greenwashing to Machinewashing: A Model and Future Directions Derived from Reasoning by Analogy

Journal of Business Ethics - This article proposes a conceptual mapping to outline salient properties and relations that allow for a knowledge transfer from the well-established greenwashing...     

The Macro Pedagogy Debate: Teaching DSGE to Undergraduates Symposium

Dynamic stochastic general equilibrium (DSGE) models have become the workhorse of modern macroeconomics and the standard way to communicate ideas among applied macroeconomists. Undergraduate students, however, often remain unaware of their existence. The lack of specialized knowledge can hurt them if they decide to attend graduate school. Indeed, many first-year PhD students discover that the material they are currently learning differs significantly from what they mastered in college. But this can change. In this article, the author describes how to teach a full-fledged macroeconomics course where DSGE models take center stage. He discusses how to arrange such a course within a one-semester time frame, details the main components of instruction, and finishes with some thoughts based on his teaching experience at Macalester College.     

Composition of trade flows and the effectiveness of fiscal devaluation

We empirically explore whether the magnitude of the effects of fiscal devaluation, which consists of reducing the employers’ social security contribution rate and increasing the value‐added tax rate, depends on the composition of trade flows. Our sample comprises data on bilateral balances of trade between 28 European Union (EU) Member States and their main EU trade partners over the 2000–14 period. We use robust ordinary least squares regressions, controlling for the country‐pair and time fixed effects, to test whether there are differences in the sizes of relationships between these taxation forms and bilateral trade balances for different types of goods, by distinguishing between: (i) consumer, intermediate and capital goods; and (ii) labour and capital‐intensive goods. Our results show that the overall effectiveness of fiscal devaluation depends on the composition of trade flows. Value‐added tax is more strongly (positively) associated with (bilateral) balances of trade in consumer goods, compared to balances of trade in capital and intermediate goods. The employers’ contribution rate, in contrast, is more tightly (negatively) related to balances of trade in capital goods. The latter finding also holds true for trade balances of labour‐intensive goods compared to balances of capital‐intensive goods.     

Constrained inefficiency in GEI: A geometric argument

In this paper we use global analysis to study the welfare properties of general equilibrium economies with incomplete markets (GEI). Our main result is to show that constrained Pareto optimal equilibria are contained in a submanifold of the equilibrium set. This result is explicitly derived for economies with real assets and fixed aggregate resources, of which real numéraire assets are a special case. As a by product of our analysis, we propose an original global parametrization of the equilibrium set that generalizes to incomplete markets the classical one, first, proposed by Lange [Lange, O., 1942. The foundations of welfare economics. Econometrica 10, 215–228].     

The environmental benefits of changing logistics structures for fresh vegetables

The transport phase is one of the crucial stages that can be improved to reduce the environmental impact of the fresh fruit and vegetable supply chain. In this paper, we calculate the environmental impact of feasible logistic alternatives for the above-mentioned supply chain so as to identify the type of transportation that incurs the lowest environmental costs. Specifically, we consider the early potato supply chain as a case study, as it involves one of the main fresh vegetables exported from Italy. Consumers' willingness to pay for the environmental impact of different logistic chains was obtained through life cycle assessment. Our results show that rail transport could reduce environmental impact in terms of tons of oil equivalent, environmental loads, and fuel consumption while ensuring reasonable shipment times. Development of an efficient rail transport system would be positively considered by consumers, enhancing their preferences for Italian products.     

Can Language Predict Bankruptcy? The Explanatory Power of Tone in 10‐K Filings

We examine whether the language used in 10‐K filings reflects a firm's risk of bankruptcy. Our sample contains 424 bankrupt U.S. companies in the period 1994–2015 and we use propensity score matching to find healthy matches. Based on a logit model of failing and vital firms, our findings indicate that firms at risk of bankruptcy use significantly more negative words in their 10‐K filings than comparable vital companies. This relationship holds up until three years prior to the actual bankruptcy filing. With our investigation, we confirm the results from previous accounting and finance research. 10‐K filings contain valuable information beyond the reported financials. Additionally, we show that 10‐Ks filed in the year of a firm's collapse contain an increased number of litigious words relative to healthy businesses. This indicates that the management of failing firms is already dealing with legal issues when reporting financials prior to bankruptcy. Our results suggest that analysts ought to include the presentation of financials in their assessment of bankruptcy risk as it contains explanatory and predictive power beyond the financial ratios.     

Assessing the impact of crime on the economic performance: the case of central america

Crime is obviously a menace to economic growth and progress, but to acutely understand the enormity of its impact on economic performance for effective policy action, requires a credible means of measurement. Given the crime notoriety of the most of Central America and the struggling state of their economies, this article attempts to discern from econometric evaluation and analyses, the calculable economic impact of crime on the region’s economic progress. From analyses of results, we find the model to be credible and useful following its provision of a much more accurate degree to which crime affects economic performance in Central America, which we find critical to guide policy measures.     

Institutions and Foreign Subsidiary Growth in Transition Economies: The Role of Intangible Assets and Capabilities

Although transition economies experience significant institutional transformations that vary in their degree and pace, scholarly knowledge of what distinguishes more successful foreign subsidiaries from less successful ones in such environments is limited and inconsistent. We enhance the understanding of this subject by examining how variations in the institutional development of transition economies influence the usefulness of a subsidiary's intangible assets and capabilities and, in turn, their effectiveness in enhancing its growth. Prior research assumes that foreign subsidiaries that operate in any given environment are always better off when they possess strong intangible assets and capabilities. Our analysis of more than 33,000 observations in 14 transition economies challenges this view and enables us to explain why some subsidiaries grow more quickly in less‐developed institutional environments, whereas others more quickly in countries with institutions that are more developed. More specifically, we show that although a subsidiary's intangible assets enhance its growth in transition economies with stronger institutions, these effects are particularly weak or insignificant in transition countries with less developed institutional environments. Conversely, a completely different pattern emerges for subsidiary capabilities, with their marginal effects on subsidiary growth being significantly higher in countries that are institutionally less developed than in transition countries with more developed institutions.