Labour disputes,investment decisions and the judiciary

In this article, we show that the presence of the judiciary in the background of labour relationships is not neutral within these relations: its potential intervention in case of an ex-post layoff and conflict over the severance payment can promote ex-ante efficient specific investment decisions. This ability to promote efficiency depends on the judiciary's aptitude to balance out the parties' ex-post bargaining powers. Interestingly one of the results shows that, if workers' bargaining power in wage negotiations is low, which implies that they expect low returns from continuing the relationships, an increase in the exogenous layoff probability should lead judges to be less lenient towards them.     

Fiscal Balance and Current Account in Professional Forecasts

This paper investigates the relationship between financial institutions' expectations of the current account and the fiscal balance. Using professional macroeconomic forecasts for the G‐7 countries, we find a positive relationship between forecasts of the cyclically adjusted fiscal balance deficit and forecasts of the current account deficit, indicating that professional forecasts embody links implied by the twin deficits hypothesis. In assessing the relationship between the forecasts of the fiscal deficit and the current account, we find that forecasters correctly make the distinction between the effect of fiscal policy and automatic stabilizers.     

Preference erosion and the developing countries exports to the EU: a dynamic panel gravity approach

The erosion of preferences due to multilateral tariff reductions is a long-standing concern for many developing countries. This paper focuses on the erosion of the preferences granted by the EU in the rice industry. Since 2004 there has been a sharp decrease in border protection for the EU rice industry. Because the EU grants trade preferences to a considerable number of rice exporting developing countries, the reform implied preference erosion as well. By addressing the impact of preference erosion on developing countries rice exports to the EU, this paper contributes two original insights to the literature: first, by proposing a new empirical approach to compute the preference margin when tariff rate quotas are in force which is based on the assumption of the existence of fixed costs and economies of scale in international trade; second, by estimating the trade elasticities of preferences by means of a dynamic panel gravity equation to deal with the issues of endogeneity of preferences and persistency in bilateral trade flows. The results show that the way preference margins are calculated matters significantly when assessing the existence and extent of their erosion and the values of trade elasticities. Finally, the estimations highlight the fact that the impact of preferences is still very strong for some of the countries concerned.     

Customer satisfaction and dissatisfaction in retail banking: Exploring the asymmetric impact of attribute performances

The paper presents the results of an extensive study on the determinants of customer satisfaction for a retail bank. In doing so, it uses a revised version of the traditional analyses based on derived measures of attribute importance. The need for a revised methodology is prompted by the insights of the two- and three-factor theories of customer satisfaction, such as Kano's framework. Indeed, the evidence from 5000 customers of a prominent Italian bank confirms a non-linear and asymmetric relationship between attribute performances and overall customer satisfaction. The results from both a traditional and our revised approach are compared. While this approach can be applied across different industries, it should not be assumed that the numerical results presented in the paper apply to contexts with substantially different underlying characteristics. General trends and implications for banking services are reported in the conclusions.     

Data Envelopment Analysis of different climate policy scenarios

Recent developments in the political, scientific and economic debate on climate change suggest that it is of critical importance to develop new approaches able to compare policy scenarios for their environmental effectiveness, their distributive effects, their enforceability, their costs and many other dimensions. This paper discusses a quantitative methodology to assess the relative performance of different climate policy scenarios when accounting for their long-term economic, social and environmental impacts. The proposed procedure is based on Data Envelopment Analysis, here employed in evaluating the relative efficiency of eleven global climate policy scenarios. The methodology provides a promising comparison framework; it can be seen as a way of setting some basic guidelines to frame further debates and negotiations and can be flexibly adopted and modified by decision makers to obtain relevant information for policy design. Three major findings emerge from this analysis: (i) stringent climate policies can outperform less ambitious proposals if all sustainability dimensions are taken into account; (ii) a carefully chosen burden-sharing rule is able to bring together climate stabilisation and equity considerations; and (iii) the most inefficient strategy results from the failure to negotiate a post-2012 global climate agreement.     

Asset Prices and History: The Case of Austria

Historical events are reflected in asset prices. Looking at Austrian government bond prices traded on the Swiss stock exchange during WWII provides therefore a useful way of interpreting the importance the thousands of people directly and indirectly engaged in stock markets attributed to various war events. An econometric analysis of the relationship between government bond values and events in Austrian history reveals that some generally considered crucial events connected with WWII are clearly reflected in Austrian government bond prices. This holds, in particular for the beginning and the end of the war. The annexation of Austria by Germany in 1938 which seemingly looked as being overwhelmingly and passionately welcomed by the Austrian population negatively affected the evaluation of Austrian government bonds, i.e. it was considered to be to the disadvantage of Austria by the people who put their own personal fortune at risk.