HOW TO CLEAR UP THE PENSIONS MESS

All three pillars of the British pensions system are crumbling. The basic state pension is unsustainable in its present form. Defined benefit occupational pension schemes are fast disappearing, and with them the retirement hopes of millions of workers. A further 3 million low-income earners are not saving enough for their retirement. And uncertainty about pensions choices is widespread. In each case the primary cause of the problem is governmental or regulatory failure. The paper makes eight general and four specific proposals for restoring the system.     

Regional integration: an empirical assessment of Russia

Using a statistical model of commodity trade, we quantify the evolution of regional economic integration within Russia during 1995–1999, and explore potential determinants of this evolution. Our integration measure exhibits rich regional variation that, when aggregated to the national level, fluctuates substantially over time. In accounting for this behavior, we draw in part on theoretical models that emphasize the potential role of openness to international trade and regional disparities in income in threatening economic integration. Controlling for a host of additional regional- and national-level variables, we find a strong negative correspondence between openness to international trade and internal economic integration.     

Employment response to supply and demand shocks under envy in wage formation

Summary We analyse the impact of wage envy on employment and on its sectorial allocation. A multi-sector general equilibrium model in which externalities among sectors arise through wage envy and decentralized bargaining is presented. In the no externality case, sectorial employment is a function of sectorial productivity and of the disutility of work. In the externality case, sectorial employment is additionally affected by union power in all sectors (with a negative sign even though bargaining is efficient), by the productivity in the other sectors (with an undetermined sign) and by the relative average propensity to consume goods of this sector (with a positive sign).Rijksuniversiteit Limburg, FNRS and Université Catholique de Louvain. I would like to thank Franz Palm for valuable comments on an earlier draft. This paper benefitted also from discussions with Torben Andersen, Jacques Drèze and Henri Sneessens (without implying them in any mistake). The detailed comments of the anonymous referee contributed to a large extent to clarify the exposition of the model.     

Monetary policy regimes and beliefs*

This article investigates the role of beliefs over monetary policy in propagating the effects of monetary policy shocks within the context of a dynamic, stochastic general equilibrium model. In our model, monetary policy periodically switches between low and high money growth regimes. When individuals are unable to observe the regime directly, they form inferences over regime‐type based on historical money growth rates. For an empirically plausible money growth process, beliefs evolve slowly in the wake of a regime change. As a result, our model is able to capture some of the observed persistence of real and nominal variables following such a regime change.     

The right to the city

The right to the city is not merely a right of access to what already exists, but a right to change it. We need to be sure we can live with our own creations. But the right to remake ourselves by creating a qualitatively different kind of urban sociality is one of the most precious of all human rights. We have been made and re‐made without knowing exactly why, how, and to what end. How then, can we better exercise this right to the city? But whose rights and whose city? Could we not construct a socially just city? But what is social justice? Is justice simply whatever the ruling class wants it to be? We live in a society in which the inalienable rights to private property and the profit rate trump any other conception of inalienable rights. Our society is dominated by the accumulation of capital through market exchange. To live under capitalism is to accept or submit to that bundle of rights necessary for endless capital accumulation. Free markets are not necessarily fair. Worse still, markets require scarcity to function. The inalienable rights of private property and the profit rate lead to worlds of inequality, alienation and injustice. The endless accumulation of capital and the conception of rights embedded threin must be opposed and a different right to the city must be asserted politically. Derivative rights (like the right to be treated with dignity) should become fundamental and fundamental rights (of private property and the profit rate) should become derivative. But new rights can also be defined: like the right to the city which is not merely a right of access to what the property speculators and state planners define, but an active right to make the city different, to shape it more in accord with our heart's desire, and to re‐make ourselves thereby in a different image.     

From certainty to uncertainty: Thought, theory and action in a postmodern world

The progress of human thought in recent centuries has brought not only new knowledge but also new (and sometimes disturbing) questions that tug at the foundations of knowledge itself. The opening years of the twentieth century were marked by optimistic expectations of ever-increasing certainty and scientific and technological progress. Yet the century turned out to be an age of growing cracks in the facade of classical certainty, as relativity, quantum physics and chaos theory each deepened our understanding of the universe yet raised fundamental challenges to ideas about knowledge. Today, although reductionist and mechanistic ways of thinking still prevail in much contemporary thinking about economics, global security and environmental problems, we can nevertheless contemplate an “end of objectivity” in which we realize that we do not stand outside of the systems we study.