Wages in the East German Transition Process: Facts and Explanations

We analyze wage developments in the East German transition process both at the macro- and at the microeconomic level. At the macroeconomic level, we draw special attention to the important distinction between product and consumption wages, describe the development of various wage measures, labor productivity and unit labor costs in East Germany in relation to West Germany, and relate these developments to the system of collective wage bargaining. At the microeconomic level, we describe changes in the distribution of hourly wages between 1990 and 1997 and analyze the economic factors determining these changes by way of empirical wage functions estimated on the basis of the Socio-Economic Panel for East Germany. The paper also draws some conclusions on the likely future course of the East–West German wage convergence process.     

Why ‘Good Governance’ Fails: Lessons from Regional Economic Development in Colombia

By critically reviewing different strands of literature on institutional change and development, this essay argues that, in order to fully understand subnational economic development, we need to move away from ‘good governance' explanations in which geography‐specific analyses of power structures and elite interests are largely absent. Using findings for Colombia and insights from economic geography and heterodox political economy theories, this essay gives theoretical and conceptual guidelines and approximations for future studies on regional economic development. The contribution provides a place‐based discussion of how the historically evolved distribution of power balances, context‐specific elite interests, and the interaction between place‐bound actors and place‐less dynamics affect subnational institutional arrangements shaping policies and development outcomes. The conclusions drawn are not limited to Colombia and will prove beneficial to researchers studying regional economic development in subnational contexts elsewhere in the world.     

Industry-Level Wage Bargaining: A Partial Rehabilitation—The German Experience

In order to reduce unemployment, it is often recommended that industry-level wage bargaining in Germany should be replaced by a more decentralized system. This paper provides a critical assessment of the current wage bargaining institutions and re-examines the case for a more decentralized system. Based on a theoretical model integrating Insider–Outsider aspects into the comparison, the uniformly superior employment performance of a decentralized wage bargaining system is questioned. We conclude that, rather than solely trying to decentralize wage bargaining, a promising policy option may be to improve the skills of the unemployed by efficient labour market policies and to foster institutional reforms such that wage bargaining takes account of the long-run employment consequences of wage setting.     

Downstream and upstream oligopolies when retailer’s effort matters

This paper investigates the different terms of strategic interactions (non-cooperative, simultaneous move): wholesale versus retail pricing—between Bertrand competing retailers and an upstream oligopoly. The crucial extension is that retailers can play a significant role and this can turn conventional wisdom upside down, e.g.: retail competition need not benefit the upstream firms and wholesale pricing can dominate retail pricing in spite of double marginalization because of the incentives it provides to retailers. In addition, the consequences are investigated of differentiating both pricing instruments either at the downstream (this is motivated by Apple’s entry into the ebook market) or at the upstream level.     

EU-China Partenariat 2006:Tailor-made Opportunities for SMEs of EU and China

2006 EU-China Partenariat 2006, the large-scale business-to-business event which will link almost one thousand European and Chinese companies is indeed a highly appropriate way to further enhance the already excellent relations between the EU and China moreover as this is the very year that we are celebrating 30 years of EU-China diplomatic ties.……     

Financial expectations and the ‘left-right’ political value scale: Testing for the POUM hypothesis

Using a uniquely defined indicator of political ideology we test whether expectations of future financial well-being have an effect on an individual’s position on the political ‘left-right’ spectrum. We find evidence of a significant “prospect of upward mobility” effect.     

Local compensation payments for agri-environmental externalities: a panel data analysis of bargaining outcomes

We analyse local compensation payments made to farmers for providinglandscape amenities in Alpine tourist communities. These paymentsresult from political bargaining at the municipal level. Paneldata estimation shows that the probability of introducing compensationpayments depends positively on the benefits of landscape amenities.Although no impact of service provision cost is found, transactioncosts at different levels of the bargaining process reduce theprobability of payments. Compensation payments mainly occurin communities where the provision of agricultural landscapeservices is perceived as relatively low and the diversity ofthe countryside seems to be endangered. We argue that municipalcompensation payments are an important supplement to nationaland European Union policy measures in support of less-favouredareas.     

Financial Markets and the Instability of General Equilibrium

The Hicksian general equilibrium with money and securities is the starting point for an expansion with numerous other financial variables. Disturbances to the system, partly observed from recent experience, are examined, and possible remedies are proposed. Walras’ Law, that the sum of excess demands for goods and basic factors is zero, no longer applies in an economy where financial variables are present. The main analysis is of a closed economy; the open economy, in the manner introduced by Mosak, is treated in an appendix.     

Resource extraction by cartels facing constraints on cooperation

This paper considers a non-renewable resource cartel facing constraints on cooperation. Although different kinds of constraints are conceivable and some of them are also investigated, the analysis focuses on the case in which cooperation is restricted to sufficiently high quotas. This approach of imposing constraints on cartelization complements papers that assume exogenously when a monopoly ends (in particular Benchekroun, H., Gaudet, G., Van Long, N., 2006. Temporary natural resource cartels. Journal of Environmental Economics and Management 52, 663–674) in two aspects: an endogenous determination when the cartel breaks up and the consequence that it is impossible to shift resource sales between the two regimes.