The end of financial services liberalisation as we know it

At the intersection of trade policy and finance a new field of international economic policy has emerged, which has so far received little academic attention. Since the early 1990s, financial services have become an object of modern trade policy for the first time. How are the contours of the new trade policy for the financial services defined? Which research issues are posed by this new field?     

Another view on optimal design for estimating the point of extremum in quadratic regression

In this paper we illustrate how certain design problems can be simplified by reparametrization of the response function. This alternative viewpoint provides further insights than the more traditional approaches, like minimax, Bayesian or sequential techniques. It will also improve a practitioner’s understanding of more general situations and their “classical” treatment.     

Fairness in the Mail and Opportunism in the Internet: A Newspaper Experiment on Ultimatum Bargaining

Abstract. On 11 May 2001, readers of the Berliner Zeitung were invited to participate in an ultimatum bargaining experiment played in the strategy vector mode: each participant chooses not only how much (s)he demands of the DM1,000 pie but also which of the nine possible offers of DM100, 200, …, 900 (s)he would accept or reject. In addition, participants were asked to predict the most frequent type of behavior. Three randomly selected proposer–responder pairs were rewarded according to the rules of ultimatum bargaining and three randomly chosen participants of those who predicted the most frequent type of behavior received a prize of DM500. Decisions could be submitted by mail, fax or via the internet. Behavior is described, statistically analyzed and compared to the usual laboratory ultimatum bargaining results.     

MODELING ON THE BASIS OF MODELS

A large part of official economic data sets is produced with the help of assumed functional relations between variables. Constructing economic models on the basis of such model-generated data results in a "modeling on the basis of the results of modeling." This common procedure can lead to consequences that seriously endanger the quality of empirical analyses. After discussing some of these dangerous consequences the authors explore the reasons behind this development. To avoid some of the most severe difficulties a "Charter for Compilation and Correct Handling of Economic Data" is proposed.     

Book Reviews

Anthony J. Whitten, Sengli J. Damanik, Jazanul Anwar and Nazaruddin Hisyam, The Ecology of Sumatra, Yogyakarta: Gadjah Mada University Press, Second Edition, 1987, pp. 583 + xx.

Christine Drake, National Integration in Indonesia: Patterns and Policies, Honolulu: University of Hawaii Press, 1989, pp. 354 + xvi. Cloth: US$ 35.00.

Geoffrey B. Hainsworth (ed.), Environmental Linkages, Halifax: School for Resource and Environmental Studies, Dalhousie University, 1985, pp. 97.

R. Repetto et al., Wasting Assets: Natural Resources in the National Income Accounts, Washington DC: World Resources Institute, June 1989, pp. 69 + vi. Paper: US$10.00.

William E. James, Seiji Naya and Gerald M. Meier, Asian Development: Economic Success and Policy Lessons, Madison, Wisconsin: University of Wisconsin Press, 1989, pp. 281 + Xviii.

Robert B. Dickie and Thomas A. Layman, Foreign Investment and Government Policy in the Third World: Forging Common Interests in Indonesia and Beyond, London: MacMillan, 1988, pp. 240 + xxxi. £35.

Alan Gelb and Associates, Oil Windfalls: Blessing or Curse? New York: Oxford University Press, for the World Bank, 1988, pp. 357 + x. $32.50.

Benjamin Higgins, The Road Less Travelled: A Development Economist's Quest, History of Development Studies 2, Canberra: National Centre For Development Studies, the Australian National University, pp. 204 + x. Paper: A$20.00

BRIEFLY NOTED: Sarwar Hobohm, Indonesia to 1993: Breakthrough in the Balance, London: Economist Intelligence Unit, Special Report no. 2012, 1989, pp. 91, £190 for this Plus the Companion Report, Indonesia to 1991: Can Momentum be Regained?

Geoffrey Hainsworth and Hasan Poerbo (eds), Local Resource Management: Towards Sustainable Development, Halifax: School for Resource and Environmental Studies, Dalhousie University, 1987, pp. 69 + xii.

H.W. Dick, Industri Pelayaran Indonesia: Kompetisi dan Regulasi, Jakarta: LP3ES, 1990, 306 + xxv.     

Are we nice(r) to nice(r) people?—An experimental analysis

We experimentally investigate whether individuals can reliably detect cooperators (the nice(r) people) in an anonymous decision environment involving “connected games.” Participants can condition their choices in an asymmetric prisoners’ dilemma and a trust game on past individual (their partner’s donation share to a self-selected charity) and social (whether their partner belongs to a group with high or low average donations) information. Thus, the two measures of niceness are the individual donation share in the donation task, and the cooperativeness of one’s choice in the two games. We find that high donors achieve a higher-than-average expected payoff by cooperating predominantly with other high donors. Group affiliation proved to be irrelevant. Electronic Supplementary Material Supplementary material is available in the online version of this article at . JEL Classification C91, C72, D3     

Growth,Employment and Taxation with Distortions in the Goods and Labour Market

Abstract. This paper analyses taxation in the presence of distortions in goods and labour markets in an endogenous growth model. The government disposes of capital, labour and consumption taxes. It is shown that the market solution leads to suboptimally low levels of growth and employment. However, available tax instruments are sufficient to attain the first‐best growth path in this economy. The paper further explores the relative distortion of capital and labour taxes. For plausible parametrisations of the model, lowering capital taxes dominate reductions in labour taxes in welfare terms.