International Borrowing, Specialization, and Unemployment in a Small Open Economy

The authors show that an increase in international borrowing increases specialization and unemployment in a small open economy that is subject to terms‐of‐trade risks. The economy has a production advantage in the export sector. However, the size of the export sector is limited by the available funds. To insure workers against income fluctuations arising from terms‐of‐trade risks, firms in the export sector offer workers a stable wage rate with the possibility of unemployment. An increase in international borrowing increases specialization in the export sector, which leads to higher unemployment when the terms‐of‐trade shock is bad. A state‐contingent price subsidy can reduce unemployment without inefficiently reducing specialization. The results are robust to the introduction of risk‐averse firms.     

Rumors

A Kyle (1985) model with private information diffusion is used to examine the motivation to spread stock tips. An informed investor with limited investment capacity spreads imprecise rumors to an audience of followers. Followers trade on the advice and move the price. Due to the imprecision of the rumor, the price overshoots with positive probability. This gives the rumormonger the opportunity to trade twice: First when she receives information, then when she knows the price to be overshooting. In equilibrium, rumors are informative and both rumormongers and followers increase their profits at the expense of uninformed liquidity traders.     

The market’s view on the probability of banking sector failure: cross-country comparisons

Hall and Miles (1990) suggest an approach of estimating default probabilities of banks using stock market information, and in this paper we apply an aggregated version of their approach to banking sectors around the world in both developed and emerging economies. We study the market’s assessment of the probability of systemic banking crises world wide over the last decade, including the Asian crisis 1997–1998. In addition, we investigate whether there is a relationship between the failure probability and institutional features of the actual banking sector. The quality of governance and the degree of law and order in a country is found to be significantly negatively related to the market based failure probabilities as is an explicit deposit insurance during periods of crisis.     

家乐福:为全球零售商上课

家乐福集团在中国开设的大型超市就像零售业中的一个"海峡"--从东方和从西方卷来的大浪交织在一起:东方--在超市一边的货架上,可以看到大量鲜活的鱼、虾、牛蛙甚至甲鱼;西方--在另一边不远的冷藏柜里,又能看到真空包装的烟熏咸肉和意大利腊肠.这个来自法国的超级零售商运用现代的模式,结合当地人的口味,在中国经营着他们的零售帝国.     

The biological reserve: The future's last stand

This article addresses the societal and cultural aspects of bioreserves and environmental restoration programmes. It begins with a discussion of bioreserves, then uses the example of a Man and Biosphere (MAB) inspired study of the US Everglades to illustrate how land has been shaped historically by culture and technology. It then demonstrates how current conflicts of values and culture, from both inside and outside the region, from interest groups with both pragmatic and emotional stances, are determining the future of an environment—the Everglades. The article thereby shows how human values and perceptions impact on the development of a sustainable Everglades, using the findings of surveys and public meetings to highlight the interests of the competing communities, ethnic and interest groups involved. If bioreserves are to survive they cannot become alienated from the people in the regions in which they are located.     

Multiple regimes and cross-country growth behaviour

This paper provides some new evidence on the behaviour of cross-country growth rates. We reject the linear model commonly used to study cross-country growth behaviour in favour of a multiple regime alternative in which different economies obey different linear models when grouped according to initial conditions. Further, the marginal product of capital is shown to vary with the level of economic development. These results are consistent with growth models which exhibit multiple steady states. Our results call into question inferences that have been made in favour of the convergence hypothesis and further suggest that the explanatory power of the Solow growth model may be enhanced with a theory of aggregate production function differences.     

In search of the meaning of entrepreneurship

This paper is an attempt to build a bridge between the popular and the academic usage of the terms entrepreneur and entrepreneurship, and to identify the raw materials needed to construct an interpretive framework capable of illuminating the nature of entrepreneurship and its role in economic theory. We review briefly the contributions made to this topic by Cantillon, Schumpeter, Schultz and Kirzner. We advance a synthetic definition of the entrepreneur as someone who specializes in taking responsibility for and making judgemental decisions that affect the location, the form, and the use of goods, resources, or institutions. We then conclude with some observations on the basic choice confronting economics regarding the place of entrepreneurship in economic analysis.