Don’t kill the messenger! Whistle-blowing in America — A review with recommendations

Whistle-blowing in America business and industry has increased as interest in ethical business behavior and the cost of unethical behavior have grown. Whistle-blowing plays the important role of helping to fill the gaps in the regulatory system that is designed to check the abuse of organizational power. However, the practice of whistle-blowing is controversial and whistle-blowers often pay a high price for their actions. Firms can engage in a number of actions to encourage whistle-blowing. Creating a climate that encourages employees to report organizational wrong doing and that protects the whistle-blower is critical. To create such a climate the organization must build trust and cooperation by educating employees in the benefits of ethical and legal behavior.     

Aid, Agriculture and Poverty in Developing Countries

The authors make two contributions to the debate on aid‐effectiveness, illustrating that for impact on poverty what matters is not just the level but also the composition and stability of aid. One specific implication of this for aid policy is that aid most effectively reduces poverty if it supports public (and other) expenditures which are supportive of agricultural development. Regression analysis confirms that these are not only direct expenditure on agriculture, but also on education and infrastructure, and military expenditure has a negative impact. Three factors appear to be particularly conducive to the development of stable pro‐poor expenditure patterns (and in particular pro‐agriculture expenditure patterns). These are expenditure strategies which protect the poor against risk, the development of stable relations between governments and aid donors, and long‐term political commitment to pro‐poor strategies by government. The argument is pursued partly by panel‐data econometric analysis of developing countries as a whole, and partly by case studies of sustained and non‐sustained green revolutions in heavily aid‐dependent countries in Africa.     

Stock-flow matching and the performance of the labor market

We estimate outflow equations for vacancies and unemployed workers in Britain, departing from the stock-based analysis of matching in two ways. First, we deal with the temporal aggregation problem that arises when discrete time data are used to describe continuous time processes. Second, we allow for a stock-flow matching mechanism in which the stock of traders on one side of the market matches with the flow of traders on the other side. Our estimates are in line with the predictions of stock-flow matching in terms of higher exit rates of flows and of matching combinations between labor market stocks and flows. Furthermore, employer search effectiveness did not seem to decline between the 1960s and the 1990s. Nevertheless, some deterioration in worker search effectiveness is detected, however less severe than that implied by previous, stock-based work.     

Education, Work and Wages in the UK

Abstract. This paper is concerned with the relationship between education, wages and working behaviour. The work is partly motivated by the sharp distinction in the literature between the returns to education and the effect of wages on labour supply. Education is the investment that cumulates in the form of human capital while labour supply is the utilization rate of that stock. Yet, variation in education is usually the basis for identifying labour supply models – education is assumed to determine wages but not affect labour supply. Moreover, it is commonly assumed that the private rate of return to education can be found from the schooling coefficient in a log-wage equation. Yet, the costs of education are largely independent of its subsequent utilization but the benefits will be higher the greater the utilization rate. Thus the returns will depend on how intensively that capital is utilized and we would expect that those who intend to work least to also invest least in human capital. Indeed, the net (of tax liabilities and welfare entitlements) return to education will be a complex function of labour supply and budget constraint considerations.
Here we attempt to model the relationship between wages, work, education and the tax/welfare system allowing for the endogeneity of education as well for the correlations between the unobservable components of wages and working behaviour. We use the estimates to simulate the effect of a new UK policy designed to increase education for children from low-income households.     

Employment flexibility in large companies: change and continuity

Claims that companies have increasingly turned to temporary workers, outworkers and subcontracting to enhance their ‘numerical flexibility’ are scrutinised using data from a survey of industrial relations in large companies. The survey reveals considerable continuity in the use of these employment practices. Recent reports published by the National Economic Development Office and ACAS are shown to overstate the extent of change in the 1980s.     

Rethinking the costs related to global warming: A survey of the issues

One approach to the economic analysis of global warming seeks to balance the costs of damage from or adaptation to it with the costs of mitigating it. The costs of adaptation and damage have been estimated using techniques of environmental evaluation, but are subject to a wide margin of uncertainty. The costs of mitigation, principally by reducing the emissions of CO₂, have been estimated using different kinds of economic models, some of the results of which have suggested that very little abatement of carbon emissions is justified before the costs of abatement exceed the benefits of it in terms of foregone damage and adaptation costs. The paper analyses the extent to which this conclusion is a function of the modelling assumptions and techniques used, rather than likely practical outcomes, with regard to the models' treatment of unemployed resources, revenue recycling, prior distortions in the economy due to the tax system and possible dynamic effects from the introduction of a carbon-energy tax. It concludes that, with different and arguably more appropriate treatment of the above issues, especially when the secondary benefits of reducing CO₂ emissions are also taken into account, it is not clear that even substantial reductions in the use of fossil fuels will incur net costs, especially if there is the prospect of even moderate costs from global warming.     

Introduction to “Economic and Financial Governance in the European Union after a decade of Economic and Political Crises.”

ABSTRACT

This paper offers the Introduction to the Special Issue “Economic and Financial Governance in the European Union after a decade of Economic and Political Crises.” We introduce the five papers. We distill three important lessons they offer for EU integration.     

A model of multiple-unit ownership as a diffusion process

This paper develops and tests a new model for multiple-unit adoptions of durable goods based on the diffusion modeling tradition. Multiple-unit adoptions are a major component of sales for many consumer durable product categories. For instance, sales of multiple-unit adoptions for televisions have been higher than both first adoptions and replacement purchases since 1977, while for automobiles, they have represented more than 20% of sales since 1966 in Australia. The structural drivers of multiple-unit adoptions are quite different from either first purchase or replacement purchase. Hence, identifying and modeling the multiple-unit component of sales is important for aggregate sales forecasts. Moreover, consumer requirements for additional units of a product are likely to be considerably different than for the other components of sales (first purchases and replacement purchases). As such, the ratio of the first, multiple, and replacement sales components will strongly influence the product mix requirements of the market.

While forecasting and influencing multiple-unit sales are an important managerial issue, very little attention has been given to multiple-unit ownership in the diffusion modeling literature. The only model available was developed for the purpose of modeling relatively short-term behavior of multiple-unit adoptions, rather than the longer-term pattern of sales. We propose a model of multiple-unit adoptions as a diffusion process.

We apply the model to both color television and automobiles. Analysis of the model's long-term fit and forecasts in these applications provide support for the structure of the new model.     

Random coefficient regression and the long-run phillips curve for the U.S.

This research suggests that a random coefficient regression model is well-suited for analyzing long-run versus short-run movements in wages and unemployment and is an improvement over some empirical techniques typically used.