The Relationship Between Economic Factors and Equity Markets in Central Europe

This paper investigates the possibility that newly-emerging equity markets in Central Europe exhibit semi-strong form efficiency such that no relationship exists between lagged values of changes in economic variables and changes in equity prices. We find that while there are connections between the real economy and equity market returns in Poland and Hungary, these links occur with lags, suggesting the possibility of profitable trading strategies based on public information and rejecting semi-strong efficiency. For the Czech Republic the situation is more complex. In recent periods, little connection exists between lagged economic variables and equity market returns. Although this finding might be viewed as consistent with semi-strong efficiency, in fact there is also little connection between current economic values and stock prices in the Czech Republic. Thus, instead of processing information efficiently, the Czech market appears to be entirely divorced from the real world. It is suggested that the difference in the current status of these markets may be due to the different methods by which they were created.     

Regionalizing National Commodity-by-Industry Accounts

Exended input–output (IO) models are increasingly prominent in regional economic analysis. Social accounting matrices and associated multiplier decompositions, IO econometric model hybrids and computable general equilibrium models are finding greater acceptance in contexts in which simple IO models once dominated. Although the extended regional models build primarily on the foundation of regional, interindustry accounting frameworks, the data from which these regional accounts are drawn are most commonly in the form of a national commodity-by-industry account. Despite this longstanding fact, the IO table adaptation literature has focused almost solely on methods of adapting national interindustry accounts to regional economies. This paper presents a method designed specifically to regionalize commodity-by-industry accounts, in the context of the US reporting system. The focus on commodity-by-industry data demands a confrontation with several important issues that otherwise might go unattended. Using a particular system and its accompanying classification scheme ensures a comprehensive and consistent regionalization method.     

Book review

Aliber, Robert Z., The Multinational Paradigm, Cambridge, MA: MIT Press, 1993, 282 pages.

Jerome, Robert W. (Ed.), World Trade at the Crossroads, Lanham, MD: University Press of America, 1992, 290 pages.

Walters, Robert S. (Ed.), Talking Trade: U.S. Policy in International Perspective, Boulder: Westview Press, 1993, 159 pages.

Murray, Geoffrey, Doing Business in China, New York: St. Martin's Press, 1994, 350 pages.

Schutte, Hellmut (Ed.), The Global Competitiveness of the Asian Firm, New York: St. Martin's Press, 1994, 379 pages.     

Representing climatic uncertainty in agricultural models – an application of state‐contingent theory

The state‐contingent approach to production uncertainty presents a more general model than the conventional stochastic production approach. Here we investigate whether the state‐contingent approach offers a tractable framework for representing climatic uncertainty at a farm level. We developed a discrete stochastic programming (DSP) model of a representative wheat–sheep (mixed) farm in the Central West of NSW. More explicit recognition of climatic states, and associated state‐contingent responses, led to optimal farm plans that were more profitable on average and less prone to the effects of variations in climate than comparable farm plans based on the expected value framework. The solutions from the DSP model also appeared to more closely resemble farm land use than the equivalent expected value model using the same data. We conclude that there are benefits of adopting a state‐contingent view of uncertainty, giving support to its more widespread application to other problems.     

Sharing the burden for climate change mitigation in the Canadian federation

Dividing the burden for greenhouse gas abatement among the provinces has proven challenging in Canada and contributes to Canada's failure to limit emissions. This paper uses a computable general equilibrium model to compare a number of rules for sharing the burden of emission reductions among Canadian provinces. Because of the substantial heterogeneity among Canadian provinces, these different rules imply significantly different relative abatement effort among provinces, and also significantly different welfare implications. We compare these archetypal burden sharing rules to existing provincial emission reduction commitments and find that none of the standard burden sharing rules comes close to existing commitments.     

Market-focused management: Human resource management implications

Under market-focused management (MFM) the whole organization is engaged in the satisfaction of customers' needs—so much so that MFM becomes the philosophy and modus operandi of doing business and customers become the reason for the organization's existence. If this is to happen, human resource philosophies, policies, and practice must be conducive to MFM. The objectives of this article are to briefly review the implications for human resource management. The merits of adopting the business philosophy of MFM as compared to other traditional alternatives have been discussed in detail elsewhere (Webster, 1992; Day, 1990; Kohli and Jaworski, 1990; Narver and Slater, 1990; Grover, 1995). Here we focus on describing human resource philosophy, policies, and practices options that are affected by MFM.     

Dynamic general equilibrium analysis of improved weed management in Australia's winter cropping systems*

A recent analysis indicated that the direct financial cost of weeds to Australia's winter grain sector was approximately $A1.2bn in 1998–1999. Costs of this magnitude represent a large recurring productivity loss in an agricultural sector that is sufficient to impact significantly on regional economies. Using a multi‐regional dynamic computable general equilibrium model, we simulate the general equilibrium effects of a hypothetical successful campaign to reduce the economic costs of weeds. We assume that an additional $50m of R&D spread over five years is targeted at reducing the additional costs and reduced yields arising from weeds in various broadacre crops. Following this R&D effort, one‐tenth of the losses arising from weeds is temporarily eliminated, with a diminishing benefit in succeeding years. At the national level, there is a welfare increase of $700m in discounted net present value terms. The regions with relatively high concentrations of winter crops experience small temporary macroeconomic gains.     

Designing long-term disability plans: tax efficiency vs. maximizing wage replacement

The tax treatment of long-term disability plans raises difficult questions for employers and employees, as it necessitates a tradeoff between tax efficiency and maximizing wage replacement for disabled workers. By using simplified case examples, this article illustrates the advantages and disadvantages of different plan design choices. The authors conclude that, in most cases, long-term disability coverage should be mandatory but that employees should be given the choice to decide whether their coverage is taxable.     

The Influence of Uncertain Job Location on Urban Form and the Journey to Work

Standard urban models assume residents never think about their next job. More likely, the individual value of a given home and the choice of commute length are based not only on the current job site, but also on the expectation of where future jobs will be and the likelihood of both job separations and residential moves. The first factor lessens the value of access to the present job, while the second determines the opportunity cost of moving. Both sets of factors lead to flatter rent gradients and more sprawl than predicted by standard theories. The analysis further suggests that relatively stable jobs are likely associated with relatively shorter commutes. Past studies of the regional balance of jobs and housing, of “wasteful” commuting, of differences in the length of commute by gender, and of spatial tests for discrimination in housing and local labor markets have neglected these considerations, and may yield biased results as a consequence.