Why Punish? Social reciprocity and the enforcement of prosocial norms

Recently economists have become interested in why people who face social dilemmas in the experimental lab use the seemingly incredible threat of punishment to deter free riding. Three theories with evolutionary microfoundations have been developed to explain punishment. We survey these theories and use behavioral data from surveys and experiments to show that the theory called social reciprocity in which people punish norm violators indiscriminately explains punishment best.JEL Classification: C91, C92, D64, H41 Correspondence to: Jeffrey P. CarpenterWe thank Carolyn Craven, Corinna Noelke and two referees for comments, and Middlebury College for financial assistance. In addition, Carpenter acknowledges the support of the National Science Foundation (SES-CAREER 0092953).     

You can't have a CGE recession without excess capacity

Simulations with dynamic, single country, CGE models typically imply that reductions in domestic demand, e.g. a cut in investment, generate increases in exports and reductions in imports facilitated by real depreciation. However, currently in the U.S. a large reduction in investment is occurring simultaneously with a contraction in exports and little movement in the real exchange rate. We show that to describe this situation it is necessary to drop the standard CGE assumption that capital is always fully employed in every industry. After introducing an excess capacity specification, we simulate the U.S. recession with and without the Obama stimulus package.     

Generalized spatial autocorrelation in a panel-probit model with an application to exporting in China

This paper proposes a generalized spatial panel-data probit model with spatial autocorrelation of the dependent variable, the time-invariant individual shocks, and the remainder disturbances. It proposes its estimation with a Bayesian Markov chain Monte Carlo procedure. Simulation results show that the proposed estimation method performs well in small- to medium-sized samples. This method is then applied to the analysis of export-market participation of 1451 Chinese firms between 2002 and 2006 in the prefecture-level city of Wenzhou in the province of Zhejiang. Empirical results show that two of the three forms of the hypothesized spatial autocorrelation are significant, namely the spatial lag for the dependent variable and the time-invariant firm-specific shocks, but not the time-variant shocks. Ignoring any of these significant spatial effects would lead to misspecification.     

Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe

Government permission is required to dismiss or lay off even a single worker in India and Zimbabwe. Dynamic labor demand equations, derived from a CES cost minimization model, are estimated for 64 manufacturing industries in these two countries. The data reveal a substantial reduction in demand for workers but no slowing in adjustment of number of employees following enactment of the labor laws. In India, no comparable reduction in labor demand occurred in small scale plants uncovered by the job security regulations. Among larger Indian plants, the drop in labor demand is estimated to be largest in industries where: coverage of the legislation is more extensive, private ownership dominates, and there are fewer union members.     

Reliability and relevance of fair values: private equity investments and investee fundamentals

Review of Accounting Studies - We directly test the reliability and relevance of investee fair values reported by listed private equity funds (LPEs). In our setting, disaggregated fair value...     

Karl Pearson and the Scandinavian School of Statistics

The relationship between Karl Pearson and the Scandinavian statisticians was more of a competitive than a collaborative nature. We describe the leading statisticians and stochasticists of the Scandinavian school, and relate some of their work to the work of Pearson.     

Inflation,financial development,and growth: A trilateral analysis

A large body of evidence links financial development to economic growth, yet the channels through which inflation affects this relationship and its stability have been less thoroughly explored. We take an econometric and graphical approach to examining these channels, and find that higher levels of financial development, combined with low-inflation, are related to higher rates of economic growth, especially in lower income countries, but that financial development loses much of its explanatory power in the presence of high-inflation. In particular, small increases in the price level seem able to wipe out relatively large growth effects of financial deepening when the annual rate of inflation lies between 4% and 19%, whereas the operation of the finance–growth link is less affected by inflation rates above this range. Growth is generally much lower, however, in such high-inflation settings where financial development is typically repressed.     

Non‐union employee representation: exploring the riddle of managerial strategy

Utilising case‐study research in two organisations this article considers the strategy underpinning managerially imposed systems of non‐union employee representation. Drawing on Dundon and Gollan's ‘sensitising framework’, an interplay of external factors and internal dynamics is seen to prompt objectives that are both defensive (union avoidance) and proactive in nature (e.g. the legitimisation of change). The article suggests that such goals represent ‘rival logics of action’, the tensions unleashed being ultimately reflected in the ineffective functioning of the institutions under review.