Employment cycles, low income work and the dynamic impact of wage regulations. A macro perspective

In this paper we investigate, against the background of Goodwin??s (1967) growth cycle model, a dual labor market economy and the consequences of introducing an unemployment benefit system and minimum wages in the second labor market and a maximum wage barrier in the first one. In the framework with free ??hiring?? and firing?? in the both labor markets we show (a) that in fact maximum real wages in the first labor market not only reduce the volatility of this labor market, but also provide global stability to the system dynamics if they are locally explosive, and (b) that larger fluctuations in employment can be made (at least partially) socially acceptable through a (workfare oriented) unemployment benefit system augmented by minimum wage in the low income segment of the labor market.     

Why the Rigour–Relevance Gap in Management Research Is Unbridgeable

In this paper we discuss, on the basis of system theory, the rigour–relevance gap in management research and the proposal to overcome it. From a system theory perspective, social systems are self-referential or autopoietic, which means that communication elements of one system, such as science, cannot be authentically integrated into communication of other systems, such as the system of a business organization. Social systems can only irritate – provoke – each other, i.e. alter conditions in such a way that other systems are forced to respond. Because of the differences between management science and practice it is impossible to assess relevance of research output within the system of science. On the basis of our analysis we show that neither action research nor Mode 2 research nor recent approaches to collaborative research can succeed in producing research that is rigorous as well as relevant. Researchers and practitioners cannot collaboratively produce research, they can only irritate each other. However, sometimes irritations or provocations turn out inspiring.     

Local Linear Impulse Responses for a Small Open Economy*

Traditional vector autoregressions derive impulse responses using iterative techniques that may compound specification errors. Local projection techniques are more robust to this problem, and Monte Carlo evidence has suggested they provide reliable estimates of the true impulse responses. We use local linear projections to investigate the dynamic properties of a model for a small open economy, New Zealand. We compare impulse responses from projections to those from standard techniques, and consider the implications for monetary policy. We pay careful attention to the dimensionality of the model, and focus on effects of policy on gross domestic product, interest rates, prices and exchange rates.     

The rhetoric and reality: employer responses to the national minimum wage

The national minimum wage (NMW) was introduced to Britain in April 1999 amid much speculation. This paper considers the political reasons for introducing the NMW and the economic effects of doing so. It also addresses the issue of the additional costs created by the NMW and the strategies adopted by employers to defray them. The paper provides evidence from the hotel sector that suggests some wage gains but no significant disemployment effects. The value of conventional labour market models as predictive tools is questioned.     

The competitive consequences of hub dominance: A case study

Hub-and-spoke has become the predominant configuration of airline routes, with individual hubs typically dominated by single carriers. These operations have characteristics of natural monopoly; but dominance is a consequence also of advantages that cannot be subsumed under the rubric of superior efficiency. The carrier with the strongest presence attracts a grossly disproportionate amount of traffic and, secondarily, of the high fare-paying traffic originating at the hub. While the welfare consequences of the consequent price discrimination are ambiguous, United's acquisition of 50 additional slots at the slot-constrained O'Hare airport raised a legitimate Clayton Act Section 7 issue.Robert Julius Thorne Professor of Political Economy, Emeritus, Cornell University; Special Consultant, National Economic Research Associates, Inc. I acknowledge with gratitude the indispensable assistance of Gary J. Dorman in assembling the data presented here and offering criticisms, and of Scott Thomas. They bear no necessary responsibility, however, for the article itself.     

Endogenous growth cycles—Arrow's learning by doing reconsidered

A two-sector growth model is presented in which human capital is acquired through learning by doing. It is shown that, for both the competitive situation and the social optimum, endogenous growth cycles may be the outcome. Concerning the economic prerequisite for persistent oscillations we detect a bunching of investment at nearby dates leading economic variables to overshoot the long-run steady state values. This clustering of investment, for its part, may be caused by adjacent complementarity with respect to the stocks or by a sufficiently strong external effect of investment on the marginal product of physical capital or on the opportunity costs of investment.     

Global team members’ performance and the roles of cross-cultural training,cultural intelligence,and contact intensity: the case of global teams in IT offshoring sector

Abstract

This study investigates an unexplored form of global team prevalent in the Information Technology (IT) offshoring sector where IT service providers work alongside with client representatives in a global team context. Guided by theories of intelligence and intergroup contact, this study investigates global team members’ individual-level task performance. Specifically, this study examines the development of global team members’ cultural intelligence (CQ) following cross-cultural training. This study also determines the effects of improved CQ on individual-level task performance and examines the moderating role of contact intensity on the relationship between improved CQ and individual-level task performance. Data on the development of CQ, participation in cross-cultural training, and contact intensity were collected from 225 global team members while data on task performance were obtained from each of the global team members’ supervisors. The results of the statistical analyses reveal that: (i) CQ improved following participation in cross-cultural training sessions; (ii) improved CQ is positively and significantly related to individual-level task performance; and (iii) contact intensity moderates the relationship between improved CQ and individual-level task performance. These findings have a number of theoretical and practical implications for international organizations such as those in the IT offshoring sector.     

Systemically important banks: an analysis for the European banking system

In this paper we perform an empirical analysis to identify systemically important banks by a few individual bank characteristics that are easy to observe in practice. This analysis builds on a new method to construct measures of systemic relevance of individual institutions that are consistent with a risk analysis at the level of the banking system, taking correlations in bank asset returns into account. We derive asset return correlations for a sample of European publicly traded banks from market data and construct two risk measures: incremental value at risk and conditional expected shortfall. Incremental value at risk quantifies the individual contributions of banks to the system’s Value-at-Risk. Conditional expected shortfall measures the increase in the expected system wide deposit insurance liability that would follow from the default of an institution. The analysis of hypothetical defaults of institutions is performed consistently with the observed distribution of asset returns by using the conditional distribution. Both measures are then analyzed in a panel regression where individual characteristics are used to explain incremental value at risk and conditional expected shortfall.