OPTIMAL MONETARY POLICY WITH THE STICKY INFORMATION MODEL OF PRICE ADJUSTMENT: INFLATION OR PRICE‐LEVEL TARGETING?

I investigate the optimal monetary policy in a New Keynesian macroeconomic framework with the sticky information model of price adjustment. The model is solved for optimal policy, and welfare implications of three alternative monetary policy regimes under this optimal policy are compared when there is a cost‐push shock to the economy. These monetary policy regimes are the unconstrained policy, price‐level targeting and inflation targeting regimes. The results illustrate that optimal policy depends on the degree of price stickiness and the persistence of the shock. Inflation targeting emerges as the optimal policy if prices are flexible enough or the shock is persistent enough. However, the unconstrained policy or price‐level targeting might be preferable to inflation targeting if prices are not very flexible and the shock is not very persistent. The results also show that as prices become more flexible, the welfare loss usually gets bigger.     

A WARM EMBRACE OR THE COLD SHOULDER? WAGE AND EMPLOYMENT OUTCOMES IN ETHNIC ENCLAVES

This paper examines how immigrant enclaves influence labor market outcomes. We examine the effect of variation in ethnic concentration across counties and county subdivisions on both immigrant earnings and employment using the non‐public use, 1‐in‐6 sample of the 2000 U.S. Census. We find that there is heterogeneity in enclave impacts by ethnic group and skill composition of the enclave. While some groups tend to suffer from lower wages and employment propensities when residing in areas with larger ethnic concentrations, others have higher wages and improved employment opportunities in enclaves. (JEL J61, J15, R23)     

REMITTANCES AND FINANCIAL DEVELOPMENT: SUBSTITUTES OR COMPLEMENTS IN ECONOMIC GROWTH?

Recent studies indicate that the effect of migrants’ remittances on the economic growth of receiving countries depends negatively on the level of development of the domestic financial sector. In this paper, we introduce a new indicator of financial development to measure the efficiency of the domestic banking system, and find the existence of complementarity between remittances and bank efficiency in economic growth, such that remittances promote growth only in countries whose banks function well. This result is robust to controls for other traditional measures of financial depth and institutional quality indicators.     

TO REGULATE OR TO DEREGULATE? THE ROLE OF DOWNSTREAM COMPETITION IN UPSTREAM MONOPOLY VERTICALLY LINKED MARKETS

This paper attempts to cast light to the effect of monopoly regulation in Cournot markets compared to its effect in Bertrand markets. To this purpose, we use a simple model of a vertically linked market, where an upstream regulated natural monopoly is trading via two‐part tariff contracts with a downstream duopoly. Combining our results to those of the existing literature on deregulated markets, we argue that when the downstream competition is in prices, efficiency dictates regulating the monopoly with a marginal cost based pricing scheme. However, this type of regulation leads to significant welfare loss, when the downstream market is characterized by Cournot competition.     

DRIVERS OF PAYMENT PATTERNS AT THE POINT OF SALE: STABLE OR NOT?

This research shows that it is key to have up‐to‐date information on payment behavior per type of point of sale (POS) and on how this behavior is driven by sociodemographic factors and perceived payment instrument attributes. Based on 2004 and 2014 data of the Netherlands, we find substantial shifts in the drivers of payment behavior. The sociodemographic factors behind the adoption of the credit card and debit card have changed, especially for the latter payment card. In addition, there are substantial shifts in the effects of sociodemographic factors and perceived relative payment attributes on which payment instrument consumers most often use. Shifts in payment behavior depend on the type of POS. Overall, we find that safety has become more important for payment behavior. The extent to which payment behavior depends on user‐friendliness and speed has somewhat decreased. (JEL C25, D12, E42)     

WHERE ARE THE WOMEN? GENDER,LABOR, AND DISCOURSE IN THE NOIDA EXPORT PROCESSING ZONE AND DELHI

Abstract

Export processing zones (EPZs) are like islands of globalization. Much of the literature on EPZs and export-oriented industries (EOIs) notes a preponderance of women who are constructed as “cheap,” “nimble fingered,” and “docile” labor. This literature is dominated by socialist feminist thinkers, and this paper argues that there is a need to incorporate the insights of postmodern feminist thinkers. The article focuses on the role that language, discourse, and subjectivity play in the gendering process in handmade jewelry production in the Noida Export Processing Zone (NEPZ) and in the ranch production units related by common ownership in Delhi, India. It thus gives “voices” to women and men, and brings out their agency in structuring the labor market. The study confirms that gender division of labor is a product of discursive and material practices that are reproduced through discourses into which different actors invest, and that feed into the gendered subjective identities of these actors.     

DETERMINANTS OF PRIVATE INVESTMENT IN MALAYSIA: WHAT CAUSES THE POSTCRISIS SLUMPS?

This paper examines the determinants of private investment in Malaysia, with an emphasis on the postcrisis investment slumps. A static private investment function is derived from the neoclassical framework, with appropriate modifications to account for the structural features observed in the country. To introduce dynamics into the model, we adopt a cost minimization problem, which assumes firms optimize investment levels with respect to a quadratic loss function. The results suggest that the availability of financial resources in the economy has a significant positive impact on private investment. Macroeconomic uncertainty exerts a negative influence on the investment climate in the private sector. Both foreign direct investment and public investment are found to have a complementary effect on private investment. Consistent with the prediction of the neoclassical model, a higher level of aggregate output raises private investment, whereas the user cost of capital has the opposite impact. (JEL O16, O53)     

“SWEEPING THE HEAVENS FOR A COMET”: WOMEN,THE LANGUAGE OF POLITICAL ECONOMY,AND HIGHER EDUCATION IN THE US

Abstract

The importance of increased levels of education in improving the status of women throughout the world is well established. Higher levels of education are associated with lower birth rates, higher incomes, and greater autonomy for women. Yet, women's struggle to have a voice in higher education has been fraught with difficulties in the US and worldwide, particularly in overcoming widely held perceptions that limit their entrance into certain academic fields, tenured positions, and elite universities. This essay examines the role political economy has played in providing narratives that rationalize women's limited participation in higher education. By examining the representation of women in the academic culture of the nineteenth- and twentieth-century US, we can perhaps better understand women's struggle to obtain an authoritative voice in higher education worldwide.     

UPLIFTING THE RACE THROUGH DOMESTICITY: CAPITALISM,AFRICAN-AMERICAN MIGRATION,AND THE HOUSEHOLD ECONOMY IN THE GREAT MIGRATION ERA OF 1916—1930

Abstract

The transformation of African Americans into a working-class population began during the World War I Great Migration era. In response to the rise in racial intolerance and the urgency of migrants’ needs, the Pittsburgh Urban League was formed in 1918 in Pittsburgh, Pennsylvania. Using a historical case study, this article suggests that the League attempted to promote domesticity among married migrant women for the purpose of racial uplift. This paper examines the implications of this strategy for migrant households and Pittsburgh industry. The study explores the relationship between patriarchy and capitalism in the formation of working-class families by discussing the role of racial ideologies in this process. The author argues that studies of white women’s domesticity and reproductive labor also must address the ways in which race has affected their incorporation into capitalist class systems in countries where race is a central organizing feature of the political economy.     

RENAISSANCE OR REQUIEM: IS NUCLEAR ENERGY COST EFFECTIVE IN A POST‐FUKUSHIMA WORLD?

In the aftermath of Fukushima, decisions to slow or stop the future use of nuclear power have not been based on rational economic analysis. We find that there are cost‐effective technologies that would greatly mitigate future natural disasters. Even if the U.S. nuclear industry adopted new safety technologies and paid the full cost of insurance and borrowing, it is more efficient to continue to use existing nuclear plants than to replace them with new fossil fuel plants. However, new nuclear plant costs can exceed fossil fuel alternatives if the price of carbon emissions is below $118/ton. (JEL Q40, Q48, Q54)     

ALTERNATIVE STRATEGIES FOR FIRMS IN OPPRESSIVE AND CORRUPT STATES: INFORMALITY OR FORMALITY VIA BUSINESS ASSOCIATIONS?

Firms operating in oppressive conditions such as those in the transition countries often take advantage of informality, making unofficial payments to officials and underreporting their sales for tax purposes. This paper argues that business associations may constitute a more transparent, efficient, and formal alternative. Empirical support for the argument is provided based on firm level data on several thousand firms from the Business Environment and Enterprise Performance Surveys in 25 transitions countries for 2002 and 2005. We show that, despite their often rather bad reputation, business associations tend to play a rather positive role, helping firms to reduce both having to make unofficial payments and underreporting of sales for tax purposes. ( JEL D2, D7, L2, P2, P3)     

SPORTS,EXERCISE, AND LENGTH OF STAY IN HOSPITALS: IS THERE A DIFFERENTIAL EFFECT FOR THE CHRONICALLY ILL PEOPLE?

This paper examines the effects of sports and exercise on hospital stays for males and females by various chronic conditions using a panel dataset from Canada. The results suggest that moderately active and active individuals have shorter hospital stays than inactive individuals. On average, individuals with moderate to higher amount of physical activity stay 36% to 39% less than inactive individuals. Physical activity has consistent impact on hospital stays for the entire population as well as subgroup of people with or without chronic conditions. However, its effect is substantially larger for people with chronic conditions, especially for those who have diabetes, cancer, high blood pressure, heart disease, and stroke. The paper also suggests that additional exercise once moderate level of exercise is achieved does not generate substantially large benefits in the form of shorter hospital stays. Hence, it provides additional evidence to support the recent physical activity guidelines for adults that highlight health benefits of moderate amount of regular physical activity. (JEL I1)     

THE USE OF PPP ARRANGEMENTS IN STREET LIGHTING: A WIN‐WIN OPTION?

Street lighting is a classic example of a public good, and governments are extensively involved in its provision. Adequate lighting facilitates both car traffic and personal safety while improving an urban area's character. However, many systems are mismanaged and obsolete, incurring high energy costs and emissions with relatively low lighting quality. Public authorities facing budget constraints often find retrofitting old street‐lighting systems challenging. They have two options: either direct in‐house, public‐authority renovation or contracting with a private company through a public–private partnership (PPP). Although private‐sector‐participation approaches vary, most public authorities can now enter into a street‐light modernization PPP agreement. That can be a win‐win option for both the public and private sectors. The upfront investment is small and operational expenses outweigh capital expenses, generating lower payback periods and energy‐cost reduction with light‐emitting diode (LED) technology. Little public expenditure is necessary when private partners are compensated via shared energy savings. We analyze the Detroit street‐light PPP – the United States’ first – and find that PPPs are practical for retrofitting US street lights and in other countries where they are antiquated.     

LOCAL SERVICES OF GENERAL ECONOMIC INTEREST IN EUROPE. WATER SERVICES: WHAT ARE THE CHALLENGES?

ABSTRACT: This study was conducted within the CIRIEC International Scientific Commission ‘Public Services/Public Enterprises’ project on Local services of general economic interest. Compared to other sectors, the process of Europeanization has distinct features in the water field. At EU level, water policy is rather founded on the respect of common ambitious quality standards based on public health and environmental protection norms than the creation of an ‘internal market’. Therefore, the evolution of different models of governance, organization and supply have undergone specific changes. This study focuses on local and national diversity of water services and the broad outlines of current challenges and developments. It concludes that a key challenge is to guarantee the competent public authorities’ freedom of choice of management modes.     

COLLECTIVE KNOWLEDGE,PROLIFIC INVENTORS AND THE VALUE OF INVENTIONS: AN EMPIRICAL STUDY OF FRENCH,GERMAN AND BRITISH PATENTS IN THE US, 1975–1999

Abstract

The objective of this paper is to test two related hypotheses: The first is that the involvement of both prolific and foreign inventors in the production of knowledge has a direct, positive impact on the collective dimension of this knowledge production as measured by the size of the inventive team. The second is that the involvement of both prolific and foreign inventors has a direct, positive impact on the value of the new knowledge produced. We use detailed information from nearly 300,000 patents granted by the US Patent Office to French, German, and British inventors over the period from 1975 to 1999. From the data available from each patent regarding citations of prior patents and the numbers and identities of the inventors listed in the patent application, we are able to construct measures of collective knowledge, the presence of prolific and foreign inventors, and the imputed value of patents. In a novel approach in this literature, we estimate negative binomial multiple regression models for determining both the size of the collective dimension and the value of the patents. After controlling for the effects of years, technological fields, and patenting country, we find a strong support for the hypothesis that both prolific and foreign inventors tend to be parts of larger teams of inventors and for the hypothesis that prolific and foreign inventors tend to produce inventions having more value. In the conclusion, we draw some implications from these results for knowledge governance.     

ISLAMISTIC TERROR AND THE LABOUR MARKET PROSPECTS OF ARAB MEN IN ENGLAND: DOES A COUNTRY'S DIRECT INVOLVEMENT MATTER?

This paper considers two questions on the labour market discrimination against Arab or Muslim men after the recent terrorist attacks. First, I consider for the first time the impact of the September 11 attacks on the wages and working hours of Arabs in Europe. Second, I test whether the fact that a country was the direct target of terrorist attacks influences discrimination using the Madrid train bombings on 11 March 2004 and the London bombings on 7 July 2005 as quasi‐experimental events. The results indicate that the wages, hours worked and employment probabilities of Arab men were unchanged by the attacks.     

OLD WINE IN A NEW BOTTLE: TRADE OPENNESS AND FDI FLOWS—ARE THE EMERGING ECONOMIES CONVERGING?

This study uses the club convergence methodology of Phillips and Sul (2007) for emerging economies spanning the period 1960–2013 to explore whether such convergence exists and whether the increase of international trade and foreign direct investment (FDI) flows has been a global or club phenomenon. We find the absence of a homogeneous convergence club. The results for FDI outflows also reach similar conclusions, suggesting the formation of convergence clubs by stage of development. These results suggest that policies that promote convergence in trade openness and FDI flows would permit countries to benefit from mutual interactions and by greater consistency and efficiency in trade regimes, thus permitting these countries to benefit from openness leading to a race to the top rather than bottom. (JEL F41, C33)     

SOCIAL INVESTMENT IN SPAIN: HOW DO SOLIDARITY MUTUAL FUNDS DECIDE THE ALLOCATION OF SOLIDARITY FUNDING BETWEEN SOCIAL ECONOMY ORGANIZATIONS?

Solidarity mutual funds (SMFs) are a financial product oriented toward funding social economy organizations (SEOs). The main characteristic of these mutual funds, known in other countries as social investment, is that part of their management fees is allocated to support SEOs. In Spain, the criteria used in the allocation process of these funds have not been studied. The aim of this paper is to analyze the decision model of SMFs. To this end, we developed a logit regression model. The obtained results show that the decision model of SMFs promotes the development of commercial activity and favors a specific ideology and values and an exclusive relationship with the main funders.     

COOPERATION: THE POWER OF A SINGLE WORD? SOME EXPERIMENTAL EVIDENCE ON WORDING AND GENDER EFFECTS IN A GAME OF CHICKEN

Framing has been widely shown to affect decision making. In this paper, we investigate experimentally whether, and to what extent, cooperative behaviour in a Game of Chicken may be impacted by a very basic change in the labelling of the strategies. Our within‐subject experimental design involves two treatments. The only difference between them is that we introduce either a socially‐oriented wording (I cooperate/I do not cooperate) or colours (red/blue) to designate strategies. The level of cooperation appears to be higher in the socially‐oriented context, but only when uncertainty as regards the type of the partner is manipulated, and especially among females.