Subsidized temporary jobs: lock-in and stepping stone effects

This article evaluates the effectiveness of subsidized temporary jobs as stepping stones to regular employment. We study a French program that allows job seekers to work part-time while remaining registered with the unemployment agency. In this program, insured individuals concurrently receive part of their unemployment benefits and wage income. Using administrative data, we find that subsidized temporary jobs have both a significant lock-in effect and a significant positive post-treatment impact on the hazard rate to employment. Since individuals facing a high implicit tax rate have incentives to self-select into better part-time jobs, we also find that a higher tax rate leads to a weaker lock-in effect and a stronger post-treatment effect. Simulations suggest that the lock-in effect first dominates, but that the overall effect eventually becomes positive. They also point to ways of improving the effectiveness of the policy.     

Decision Neuroscience

This article presents an introduction to and analysis of an emerging area of research, namely decision neuroscience, whose goal is to integrate research in neuroscience and behavioral decision making. The article includes an exposition of (1) how the exponential accumulation of knowledge in neuroscience can potentially enrich research on decision making, (2) the range of techniques in neuroscience that can be used to shed light on various decision making phenomena, (3) examples of potential research in this emerging area, and (4) some of the challenges readers need to be cognizant of while venturing into this new area of research. The genesis of this workshop session and article was a meeting that Dipankar Chakravarti, Antoine Bechara, and Baba Shiv had one balmy Iowa City summer afternoon in 2003. We coined the term Decision Neuroscience to describe the emerging stream of research outlined in this article.     

Bimetallism: The “rules of the game”

Based on historical evidence found in Juglar and Bonnet that over the Bimetallic period French and British central banks did co-operate when using their discount rates as policy instruments for currency stabilization, we test whether Bimetallism was a regulated system or not. Our revised story of Bimetallism contrasts the existing literature which identifies this regime as a self-equilibrating system, constrained by specie points.     

Steuerung der Geldmarktsätze durch die Schweizerische Nationalbank

Ohne Zusammenfassung     

A Theory of Favoritism in an International Oligopoly*

This paper offers an explanation of the fact that some foreign firms are favored at the expense of others, and characterizes the distribution of favors in terms of the cost parameters of firms. We present a model where favors must be bought: they come from competing contributions. This model is compared with a benchmark model with a benevolent government. We show how the distribution of favors in the favor‐seeking model deviates from the distribution that would be obtained if the government were really benevolent.     

More or Less Ambition in the Doha Round: Winners and Losers from Trade Liberalisation with a Development Perspective

What is at stake in the standoff and suspension of the Doha Round of trade talks? What impact would an agreement based on greater or lesser levels of ambition have on developing countries, whose economies are relatively dependent on agriculture? Using the MIRAGE computable general equilibrium model of the global economy, in this article we compare different scenarios for the Doha agricultural and NAMA negotiations, taking real numbers from the proposals on the table from the United States (US) and the European Union (EU) in December 2005. The results for both scenarios demonstrate the high stakes for successful completion of this negotiation given the positions articulated by the countries involved. A cooperative reform outcome by the US and the EU – based on the most ambitious components of their negotiating proposals – delivers noticeably more benefits than an unambitious outcome. We measure the degree of ambition in each scenario by the construction of a Mercantilist Trade Restrictiveness Index and focus the analysis on the impacts on developing countries.     

Stochastic rationality and Möbius inverse

Discrete choice theory is very much dominated by the paradigm of the maximization of a random utility, thus implying that the probability of choosing an alternative in a given set is equal to the sum of the probabilities of all the rankings for which this alternative comes first. This property is called stochastic rationality. In turn, the choice probability system is said to be stochastically rationalizable if and only if the Block–Marschak polynomials are all nonnegative. In the present paper, we show that each particular Block–Marschak polynomial can be defined as the probability that the decision-maker faces the loss in flexibility generated by the fact that a particular alternative has been deleted from the choice set.     

Technology and trade: Empirical evidences for the major five industrialized countries

Technology and Trade: Empirical Evidence for the Major Five Industrialized Countries. — The conclusion that prices alone cannot explain the major disturbances in trade market shares emerges from many empirical studies on international trade flows. This paper aims at introducing supply-side variables in market shares equations, namely R&D expenditures and gross fixed capital formation, along the lines of the new theory on international trade and of the literature on technology and trade relations. The empirical work is carried out on the major five industrialized countries and on twenty manufacturing industries. The results show that the supply-side variables have played a crucial role over the last decade.