Securitization and regulatory arbitrage within the ABCT framework

This paper discusses the consequences of securitization and how it links to the Austrian Business Cycle Theory (ABCT). The argument that securitization is behind fiduciary credit expansion preceding the 2008 crisis is incomplete. Consolidated balance sheet analysis demonstrates that securitization per se actually sterilizes the inflationary effect of previous fiduciary credits by transforming them into credits backed by voluntary savings. This sterilization stage is subsequently followed by new fiduciary credits issuance as securitization creates excess reserves and excess capital for banks. However, when securitization is used as a tool to implement arbitrage strategies of the Basel prudential rules, it enables banks to create more fiduciary credit while time preference remains unchanged. This creates the conditions for business cycle amplification.     

Optimal surveillance against foot‐and‐mouth disease: the case of bulk milk testing in Australia

Previous foot‐and‐mouth disease (FMD) outbreaks and simulation‐based analyses suggest substantial payoffs from detecting an incursion early. However, no economic measures for early detection have been analysed in an optimising framework. We investigate the use of bulk milk testing (BMT) for active surveillance against an FMD incursion in Australia. We find that BMT can be justified, but only when the FMD entry probability is sufficiently high or the cost of BMT is low. However, BMT is well suited for post‐outbreak surveillance, to shorten the length of time and size of an epidemic and to facilitate an earlier return to market.     

Stochastic growth: a duality approach

We re-examine the representative agent's optimal consumption and savings under uncertainty in the presence of investment constraints using martingale representation and convex analysis techniques. This framework allows us to explicitly quantify precautionary savings which induces a higher average growth rate than in a certainty setup. We provide a closed form solution for a Cobb-Douglas economy. The effect of uncertainty on portfolio selection is analyzed. Consumption growth rate and risk free interest rate exhibit a U-shaped relationship. Uncertainty negatively affects expected consumption growth rate; such a result seems to be supported by empirical evidence.     

Accounting for the trend in trade union recognition in Ireland

Considerable controversy surrounds the issue of union recognition in Irish industrial relations. Academic commentators have sought to identify and explain the trend in recognition since the 1980s. Their arguments are examined and tested. No secular rise in non‐recognition is evident, and ‘individualisation’ and ‘union substitution’ are shown to add little to explaining the trend. No evidence is found that the trend reflects Irish employers pursuing union suppression and US‐employers pursuing union substitution. The significant development is a sharp rise in non‐recognition among new US employers. Their anti‐union animus does not, however, appear to be coupled with any distinctive or generalised union avoidance strategy.     

In Search of Commitment-Oriented Human Resource Management Practices and the Conditions that Sustain Them

Drawing on data from a survey of human resource management (HRM) in Irish organizations, the paper examines the incidence of coherent bundles of commitment-oriented HRM practices and deploys loglinear modelling to test a series of hypotheses concerning external and internal factors which sustain such practices. The paper identifies the low overall incidence of cohesive commitment-oriented HRM practices in organizations in Ireland. The analysis establishes that the strategic integration of HRM into corporate strategy strongly favours the adoption of such practices, as does the avoidance of union recognition. No link can be established empirically between sectoral turbulence or dynamism and either the adoption or non-adoption of coherent sets of commitment-oriented HRM practices. Nor does the modelling identify any core set of underlying features which, when observed concurrently, greatly increases the likelihood that commitment-oriented HRM practices will be adopted.