The impact of the National Minimum Wage in low‐wage sectors: does the Earnings Top‐up Evaluation study add to our understanding?

Recent work investigating the possible impact of the introduction of the UK National Minimum Wage (NMW) in April 1999 has focused on the analysis of care homes, a sector particularly associated with low‐wage employment. In this article we attempt to add to these findings by utilising the Earnings Top‐up Evaluation (ETUE) survey which was carried out in 1996, 1997 and 1999, and aimed to over‐sample establishments operating in low‐wage sectors. Initially, we utilise the panel element of the ETUE to carry out a similar analysis to that adopted for the care homes data. However, in addition to this ‘establishment‐level’ analysis, we also utilise information on wages and employment in three non‐managerial skill groups, within this panel of establishments, to carry out an analysis at the level of the skill group. In this second set of analyses we are able to reject the null hypotheses of parameter insignificance, identifying a negative employment effect of the 1999 NMW, although this is only true of one of our indicators of NMW impact and its magnitude is small. In the conclusion to the article, we discuss our results in light of the findings from other similar studies.     

The Employers' Offensive in the Provincial Newspaper Industry

This paper examines the widespread moves made by the employers in the provincial newspaper industry since 1987 to derecognize the National Union of Journalists. Based on personal structured interviews with NUJ lay and full-time officials, and editors and managers, it looks at the extent of the changes and the methods of introducing derecognition. This and several other indicators are used to argue that the employers' actions can be characterized as a strategic offensive. Finally the paper examines the reasons for the employers' offensive, disputing in part the arguments of other researchers in their explanation of the employers' reasons for derecognition.     

Government Guarantees, Investment, and Vulnerability to Financial Crises

The paper presents a new model of the East Asian crisis which combines three elements—moral hazard, investment collapse, and multiple equilibria—in a single account. The study locates the causes of the crisis in poor financial regulation, highly leveraged financial institutions, and implicit guarantees to the financial sector. The model has a unique long‐run equilibrium with overinvestment. But in the short run, in which the capital stock is fixed, there may be multiple equilibria. In a crisis the government is forced to renege on its guarantees; the effect is a rapid reversal of foreign capital flows.     

Trade union recognition in Britain, 1995–2002: turning a corner?

This paper examines developments in union recognition in Britain between 1995–2002 and assesses the influence of the statutory provisions for gaining recognition contained in the Employment Relations Act 1999 . The paper details the significant increase in new agreements, concluding that the new law is one important factor explaining this growth. Analysis is made of the nature and circumstances of the new agreements. Finally, the paper considers whether these developments indicate the turning of a corner for trends in recognition coverage.     

Consumption and real exchange rates in professional forecasts

Standard models of international risk sharing with complete asset markets predict a positive association between relative consumption growth and real exchange-rate depreciations across countries. The striking lack of evidence for this link — the consumption/real-exchange-rate anomaly or Backus–Smith puzzle — has prompted research on risk-sharing indicators with incomplete asset markets. That research generally implies that the association holds in forecasts, rather than realizations. Using professional forecasts for 28 countries for 1990–2010 we find no such association, whether for floating nominal exchange rate regimes, fixed exchange rates, or common currencies, thus deepening the puzzle.     

On the diversification benefits of commodities from the perspective of euro investors

This paper investigates the diversification contribution of several commodities to a portfolio of traditional assets from the perspective of a euro investor. The approach applied in our analysis has high informational content as it differentiates between the sources of the diversification benefits in a statistically significant way. The results indicate that the diversification contribution varies greatly amongst the different commodities. Industrial metals, agriculturals and livestock contribute to the reduction of risk, while energy and precious metals contribute to both the reduction of the level of risk and to the improvement of return. The differentiation between bull and bear markets reveals that investors can enhance the portfolio performance by changing exposure into individual commodities. Investors can benefit from the diversification gains through financial instruments as the diversification gains hold both in the sample of physical commodity and commodity futures. Overall, the results confirm that commodities are valuable investments from the perspective of diversification.     

Analysing contagion and bailout effects with copulae

In this paper, a new methodical framework that combines elements of event studies and copula methodology is proposed in the context of the analysis of bank contagion. Furthermore, to the best knowledge of the author, this paper is the first one to analyse changes in the dependence structure of banks around bailout announcements. The results of the empirical study show that significant contagion effects could be detected both in the German banking sector after the onset of the subprime crisis as well as in the Japanese banking sector in the mid-nineties. I find that announcements of crisis at struggling banks induce a significant increase of lower tail dependence in the banking sector. The analysed bailouts and rescue measures by the central bank proved to be effective in reducing this increased lower tail dependence while increasing tail independence of bank stock returns at the same time. In both data samples, I find that the bailout announcements did not simply restore the pre-crisis dependence structure, but rather only decreased the likelihood of a joint crash of bank stocks without increasing the chances of a joint boom.