Expectations, the business cycle and the Mexican peso crisis

The 1994–95 ‘peso’ crisis did not displaycharacteristics which allow it to be easily captured by traditionalcrisis models. Models based on Minsky's financial fragilityhypothesis offer more persuasive accounts but have been supportedby relatively little direct empirical evidence. This paper providessuch evidence, with particular attention being paid to the roleof domestic financial liberalisation in the process. Minsky'shypotheses about the evolution of expectations over the businesscycle are tracked using business survey data. In addition, crisisindicators are constructed, reflecting the changing vulnerabilityof the economy to shocks. The findings support a Minskyian interpretationof the crisis.     

Protection and Trade in Services: A Survey

This paper surveys the literature on trade in services, focusing on the policies that are used to restrict such trade, the gains from liberalization, and the institutional mechanisms that have been adopted in the pursuit of liberalization. The paper argues that technological progress and international trade negotiations are likely to keep liberalization of trade in services a high profile policy issue. It also suggests that the research agenda should focus on developing better estimates of the welfare costs of protectionism in the service sector.     

Robert Browne and Full Employment

Among the valuable contributions Robert Browne made in his career was the role he played in shaping the “Equal Opportunity and Full Employment Bill of 1974” that was introduced by Congressman Augustus Hawkins of California. Browne defined full employment as “a condition in which all persons willing and able to work, no matter what their race, gender, or national origin would be guaranteed a job”. In his view, if the private sector was unable to produce full employment, the government should act as the employer of last resort. Language in support of that view was included in the Hawkins bill. Robert Browne believed only a national policy to achieve that goal would eliminate racial disparities in employment and unemployment—a long term reality in the American labor market. The 1974 Hawkins bill was met with only tepid Congressional support, little notice from civil rights leaders, and no response from the business community. Little was done to advance full employment legislation until Senator Hubert H. Humphrey of Minnesota embraced the cause in 1975. Negotiations with Congressman Hawkins led to the development of the “Full Employment and Balanced Growth Act of 1975,” a legislative measure to replace the Employment Act of 1946. The new bill was commonly known as the Humphrey–Hawkins Full Employment Bill. Robert Browne offered far less support for the new bill than for the original full employment bill introduced by Mr. Hawkins. The Humphrey Hawkins Bill failed to provide explicitly a job guarantee for all workers, and included an inflation target to make price stability co-equal with full employment as a national policy objective. The Humphrey–Hawkins Bill was enacted into law in 1978, and remains the nation’s policy dictum on full employment to this day.     

Multiunit Pay‐Your‐Bid Auction with One‐Dimensional Multiunit Demands*

An arbitrary number of units of a good is sold to two bidders through a discriminatory auction. The bidders are homogeneous ex ante and their demand functions are two‐step functions that depend on a single parameter. We characterize the symmetric Bayesian equilibrium and prove its existence and uniqueness. We compare this equilibrium with the equilibrium of the multiunit Vickrey auction and with the equilibria of the single‐unit first price and second price auctions. We examine the consequences of bundling all units into one package. We study the impacts that variations of the “relative” supply have on the equilibrium, on the bidders' average payoffs per unit, and on the efficiency of the equilibrium allocation.     

Analysis of business failures in France

In the present economic situation, business failures are a matter of major concern to government and business alike. The current period of slow growth in France, and the rigidity of its productive system make it more important than ever to act to insure the survival of its industrial fabric. This necessity has found recognition in the fact that the French Parliament is now discussing a Government bill designed to head off business failures by means of a series of early-warning signals. Under this bill, the company auditors' obligation is widened to include the duty to report to the company any factor liable to compromise the continued operation of that firm. The context within which the Banque de France's ‘Centrale de Bilans’¹ is currently pursuing its work favors the development of a discriminant function capable of detecting symptoms of business failure at the earliest possible opportunity. This work has been facilitated, and usefully guided, by Altman's pioneering research in this field since 1968, as well as by the work of Blum, Deakin, Edmister and Taffler, to rite just a few names from the Anglo-Saxon world. In France, the most recent research has been initiated by the CESA [Altman et al. (1974)] and pursued by Collongues, Sulzer, Conan and Holder, as well as by certain banks. But in this last case applications have remained strictly limited.     

Does the Commercialization of Voluntary Organizations ‘Crowd out’ Voluntary Work?

This article examines the relationship among voluntary labour supply and commercial income for Norwegian sport voluntary organizations. Empirical results using cross–sectional data on voluntary sport organizations in Norway and on their members show a decrease in voluntary work from an increase in commercial income. Voluntary work and commercial income appear as substitutable resources. Nevertheless, the results have to be differentiated according to the professional situation of the volunteers.
A crowding out effect between voluntary work and commercial resources is at play for non–professionally active individuals whereas professionally active individuals seem to be indifferent to the level of commercial resources in deciding whether to volunteer or not.     

The theorems of international trade under generalized uncertainty

A number of authors have extended the theorems of international trade to the case where the output of the various production processes (for pre-set inputs) is random. But they limited their analysis to a very special type of technological randomness known in the financial literature as ‘scalar uncertainty’. The purpose of the present paper is to extend the theorems to a much wider class of random neoclassical production functions. It is assumed that there exists a unified stock market worldwide.