INDUSTRIAL RELATIONS AND THE BRITISH ECONOMY IN THE 1990s: MRS THATCHER'S LEGACY

The authors challenge the view that the UK Conservative governments during the 1980s achieved important advances in industrial performance through the abandonment of corporatist policies that allowed management to regain the initiative and push through changes in work organization. The article takes issue with the idea that collective labour institutions necessarily impair economic efficiency, and it points up important connections between Thatcher's offensive against organized labour and the enduring weaknesses in human capital and technology. The article has three sections: the first examines labour markets and industrial relations; the second analyses government regulation; and the third assesses trends and prospects for the future, with emphasis on employment flexibility and labour productivity. The authors conclude with some comments on future prospects in the context of Britain's fuller integration in Europe.     

Optimal simple rules for the conduct of monetary and fiscal policy

Stabilization policy involves joint monetary and fiscal rules. We develop a model enabling us to characterize systematic simple monetary and fiscal policy over the business cycle. We principally focus on the following question. What are the key properties of the joint simple rule governing the conduct of systematic stabilization policy? We find that conducting stabilization policy incorporates not only a set of monetary policy choices governed by the so-called ‘Taylor principle’ but also fiscal policy that gives considerable force to automatic stabilizers. Recent US and UK monetary and fiscal choices seem broadly consistent with this model. This result is found to be robust to a number of alternate modeling strategies.     

GDP Per Capita Versus Median Household Income: What Gives Rise to the Divergence Over Time and how does this Vary Across OECD Countries?

Divergence between the evolution of GDP per capita and the income of a “typical” household as measured in household surveys is giving rise to a range of serious concerns, especially in the USA. This paper investigates the extent of that divergence and the factors that contribute to it across 27 OECD countries, using data from OECD National Accounts and the Luxembourg Income Study. While GDP per capita has risen faster than median household income in most of these countries over the period these data cover, the size of that divergence varied very substantially, with the USA a clear outlier. The paper distinguishes a number of factors contributing to such a divergence, and finds wide variation across countries in the impact of the various factors. Further, both the extent of that divergence and the role of the various contributory factors vary widely over time for most of the countries studied. These findings have serious implications for the monitoring and assessment of changes in household incomes and living standards over time.     

Valuing quality attributes of Australian merino wool

We measure the relationship between clean prices of individual lots of wool sold at auction and a range of characteristics of the raw wool. Based on the data for 111,440 fleece lots sold in the 2008–2009 auction season, five hedonic models are estimated to determine the premiums and discounts associated with each wool characteristic in five micron categories. Several wool characteristics exhibited significant nonlinear relationships, and therefore, joint density functions were assessed where appropriate. The results indicate that fibre diameter has the greatest influence on price in all markets. Brand contamination, higher levels of unscourable colour and vegetable matter contamination were found to negatively influence price.     

DO CONSUMER PRICE SUBSIDIES REALLY IMPROVE NUTRITION?

Many developing countries use food-price subsidies or controls to improve nutrition. However, subsidizing goods on which households spend a high proportion of their budget can create large wealth effects. Consumers may then substitute towards foods with higher non-nutritional attributes (e.g., taste), but lower nutritional content per unit of currency, weakening or perhaps even reversing the subsidy's intended impact. We analyze data from a randomized program of large price subsidies for poor households in two provinces of China and find no evidence that the subsidies improved nutrition. In fact, it may have had a negative impact for some households. (JEL I38; O12; Q18).     

Money,markets, meltdown: the 21st‐century crisis of labour

Analyses of the global crisis that erupted in 2007 in bank failures, liquidity shortages and business bankruptcies have obscured the connections between the real and monetary economies. Money market fetishism dominates. In the past, theories of economic crisis assigned a key causal role to labour's growing strength. In Britain, the focus of debate was trades unions' allegedly unregulated power at workplace level, but labour's presence and influence in state, business and workplace institutions has since receded. This article attempts to re‐insert labour into the contemporary analysis of the crisis and highlights the shifting relations between states, capital and labour in the age of austerity.     

The west and China: globalisation and competition in financial services

This paper examines the evolution of the industrial structure of global financial firms since the 1970s, during which time, free market policies dominated theoretical and practical policy discussion. It examines the logic behind and evidence on consolidation in the international financial services industry. It analyses the impact of Washington Consensus policies upon the expansion of global banks in developing and transition economies. It contrasts the evolution of the international banking structure during the era of modern globalisation with that in China, which has followed a fundamentally different path. Although Chinese banks have large profits and market capitalisation, their international competitiveness is still limited. Global banks have only a small role in the Chinese economy and Chinese banks have a small role in the international economy. The contrast between the two systems is of central importance for the way in which competition and regulation develops in the global financial sector.