AN INTEGRATED SYSTEM OF SOCIAL ACCOUNTS FOR AN ECONOMY OF THE YUGOSLAV TYPE

The system of social accounts described in this article is based on the following five principles: (1) Producers of goods and services are working organizations which represent groups of people or individuals organized for the purpose of earning a living by producing goods and services that satisfy individual or collective needs. Business, government, profit and nonprofit, corporate and unincorporated working organizations are treated in a uniform way. (2) Since the behaviors of the market and non-market sectors differ considerably, these two sectors are consistently separated throughout the accounting system. (3) There are four basic activities: (a) production, (b) consumption, (c) investment, and (d) income redistribution. These call for four separate accounts: (a) Working Organizations, (b) Households, (c) Community, including government and certain non-government institutions, and (d) Accumulation. The fifth account, Rest of the World, serves for balancing purposes. (4) The same classifications of transactions are used for activities and institutions, making possible complete matching of social product and financial flows accounts. (5) The system strives to achieve the maximum analytical flexibility. Some of its possibilities are visible from the classification of industries: A. Market (Material) Sector: 1. Agriculture, II. Forestry, III. Mining and Manufacturing, IV. Construction, V. Transportation, VI. Trade and Catering, VII. Handicrafts; B. Non-Market (Non-Material) Sector: VIII. Housing and Communal Economy, IX. Education, Culture, and Social Welfare, X. Public Services Social Organizations (Political, Religious, etc.), Finance and Insurance, Public Administration and Judiciary, National Defence. Sector A corresponds to the material definition of social product. Sectors A + B correspond to the SNA definition. Sectors A + B minus Industry × reflects the welfare definition. Further, Industries I-IV produce goods, V-VII market services, VIII and IX non-market services with welfare content, X intermediate nonmarket services, V-X all services.     

Inequality and Determinants of Earnings in Malaysia, 1984–1997*

Using three large nationally‐representative Malaysian Household Income Surveys from 1984, 1989 and 1997, the present paper examines inequality and determinants of earnings. During the period 1984–1997, Malaysia's real per capita GDP increased by approximately 70percent, the participation rates for both men and women went up among all age groups, and the average number of years of schooling increased by 1.2years. There was a significant relative wage improvement among the bottom deciles. The rate of return to an additional year of schooling remained high (at 10percent), despite the huge increase in the supply of the highly educated. The stable overall rate, however, masks an increased rate of return on women's education, and a decreased rate for men. Wage discrimination against women amounts to 16–20percent, and the bias has increased in 1997. The pro‐Chinese earning ethnic bias is estimated at 31percent.     

Airport capacity and demand calculations by simulation��the case of Berlin-Brandenburg International Airport

Airports are vital parts of traffic infrastructure and networks in global and dynamic economies securing inter- and transcontinental mobility of goods and people in spatially dislocated market structures. The operational capacity of an airport must be dimensioned under a long-term strategic view as its productivity is determined by available infrastructure. Often expansion projects for, e.g., an additional runway require a timeframe of up to twenty years for negotiation, planning and construction. The correction of existing or future bottlenecks will be increasingly difficult, partly due to public and political opposition and environmental awareness. From this point of view we critically examine the published planning figures and forecasts of demand and capacity of the currently constructed Berlin-Brandenburg International airport over a 20-year timeframe. Our methodology is based on a computer simulation of an independent parallel runway in segregated mode. Increasing traffic and changing traffic mix are simulated with the airport and airspace modeling tool SIMMOD, which provides the output data to calculate the capacity utilization and chosen level of service indicator minutes of average delay per flight. The simulation has shown that the practical capacity of 76 flights per hour is the maximum demand to be served under the defined assumptions. We discuss our findings and compare our results with other airports operating a similar runway layout.     

Poverty in Eastern Europe in the Years of Crisis, 1978 to 1987: Poland, Hungary, and Yugoslavia

Eastern Europe experienced an economic crisis between 1978 and1987. Declining income led to substantial increases in povertyrates in Poland and Yugoslavia, while poverty in Hungary remainedat about the same level as before the crisis. In all three countriesurban poverty increased, as the economic condition of statesector workers deteriorated to a much greater extent than thatof agricultural and mixed households. The increased povertywas entirely explained by declining income, because the overallincome distribution did not change or in some cases improved.     

POVERTY IN POLAND, 1978–88

This paper considers the issue of poverty in Poland in the decade 1978–88, during which the Polish economy experienced a severe slump (1979–81), and started a modest recovery (1983–88). The estimated poverty rate increased from less than 10 percent of the population in the late 1970s to about 18–20 percent ten years later. The increase was almost entirely due to pauperization of the urban (workers and pensioners) households. As real wages decreased, the percentage of the poor workers' households increased from 6 to almost 20 percent. The total number of pensioners, a social group with the highest poverty incidence, went up due to demographic trends and government policy of early retirement in response to market reforms undertaken in 1982–83. In addition, poverty incidence among pensioners increased to 25 percent. Overall, out of the total estimated number of 7 million poor, about 3.1 million are the new poor, i.e. people who before the crisis lived above the poverty level, and have since fallen below it. Such a deterioration in living standards, to a large extent limited to urban areas, probably had a significant impact on the ever growing disenchantment with the Communist regime which eventually resulted in its overthrow.     

Optimal Loan Interest Rate Contract Design

This paper analyzes optimal loan interest rate contracts under conditions of risky, symmetric information for one-period (static) and multi-period (dynamic) models. The optimal loan interest rate depends upon the volatility of, and co-variation among the market interest rate, borrower collateral, and borrower income, as well as the time horizon and the risk preferences of lenders and borrowers. For a risk-averse borrower with stochastic collateral, variable interest rate contracts are, in general, Pareto optimal. For plausible assumptions, the optimal loan interest rate for the multi-period model often exhibits muted responses to changes in market interest rates, making fixed rate loans a reasonable approximation for the optimal loan. Hence, in the absence of optimal contracts, long-term (short-term) borrowers tend to prefer fixed rate (variable) contracts.     

Research into employee trust: epistemological foundations and paradigmatic boundaries

This article explores the epistemological roots and paradigmatic boundaries of research into employee trust, a growing field in human resource management. Drawing on Burrell and Morgan's well‐known sociological paradigms and their epistemological foundations, we identify the dominant approaches to employee trust research to examine its strengths and limitations. Our review of the literature on employee trust revealed that the majority of the most cited papers were written from a psychological perspective, characterised by positivistic methodologies, variance theory explanations and quantitative data collection methods. We also found that most of the studies can be located in the functionalist paradigm, and while accepting that functionalism and psychological positivism have their merits, we argue that research in these traditions sometimes constrains our understanding of employee trust in their organisations. We conclude that trust researchers would benefit from a better understanding of the ontological, epistemological and axiological assumptions underlying of HRM research and should embrace greater epistemic reflexivity.     

Wage differentials and state‐private sector employment choice in Yugoslavia*

In this study we use the newly available Yugoslavian Labor Force Survey data to investigate wage differentials and employment decisions in the state and private sectors in Yugoslavia. For the analysis we use three empirical models that rely on different statistical assumptions. We extend the standard switching regression model to allow non‐normality in the joint distribution of the error terms. After correcting for the sector selection bias and controlling for workers’ characteristics we find a private sector wage advantage. The wage premium is largest for workers with low education levels and declining for workers with higher educational levels. Given the regulatory and tax policies that pushed the private sector into the informal sphere of the economy during the period covered by our data, we argue that the state/private wage gap is likely to grow in the future. This will make it increasingly difficult for the state sector to attract and retain highly skilled employees.     

Overconfidence and Market Efficiency with Heterogeneous Agents

We study financial markets in which both rational and overconfident agents coexist and make endogenous information acquisition decisions. We demonstrate the following irrelevance result when a positive fraction of rational agents (endogenously) decides to become informed in equilibrium, prices are set as if all investors were rational, and as a consequence the overconfidence bias does not affect informational efficiency, price volatility, rational traders’ expected profits or their welfare. Intuitively, as overconfidence goes up, so does price informativeness, which makes rational agents cut their information acquisition activities, effectively undoing the standard effect of more aggressive trading by the overconfident. The main intuition of the paper, if not the irrelevance result, is shown to be robust to different model specifications.We would like to thank Alberto Bisin, Xavier Freixas, Ken French, Moshe Kim, Jose Marín, and Terrance Odean for comments on an early draft, as well as an anonymous referee and seminar participants at HEC Geneva, the 2004 EFA meetings, the 2004 European Econometric Society meetings and the 2005 SAET conference. Diego García and Branko Urošević gratefully acknowledge financial support by SECCF (Belgrade).