Left out in the cold? New energy tariffs,low‐income households and the fuel poor

Two new gas tariffs were introduced in 2000, with contrasting effects. One abolished a fixed standing charge, while the other, specifically targeted at low‐income consumers, introduced a preset charge, independent of fuel consumption, for eligible consumers. We analyse the effect of the abolition of the standing charge on different household groups, including the fuel poor, the current focus of government and regulatory policy. We find that while low‐income groups have benefited more than others from abolition of the standing charge, the fuel poor have gained less than average. We contrast this with the other targeted preset charge scheme.     

New Phillips curve under alternative production technologies for Canada, the United States, and the Euro area

This paper shows that alternative production technologies imply two modifications to the New Phillips Curve (NPC): A specific ‘strategic complementarity parameter’ that affects the relationship between real marginal cost and inflation and a specific modification to the labour share measure of real marginal cost. Estimates of average duration of nominal price stickiness obtained conditional on the strategic complementarity parameter are substantially smaller, and therefore more plausible, relative to when this parameter is ignored. Modifications to the marginal cost measure alone have little effect on the NPC estimates. The empirical fit of the NPC under alternative production technologies is similar.     

Auctions in bankruptcy

This paper examines whether mandatory auctions promote the efficient restructuring of distressed firms relative to a reorganization-based bankruptcy system such as Chapter 11. Under a mandatory auction system, aggressive bidding by a coalition of incumbent management and pre-bankruptcy creditors may deter outside bidders, may result in the coalition paying more than its valuation to acquire the firm, and may result in assets remaining in a lower value use. In a reorganization-based bankruptcy system, management's voluntary choice to seek an auction conveys information about the coalition's valuation, which facilitates competition. Our model shows that a reorganization-based bankruptcy system that encourages, but does not mandate auctions, can actually increase the likelihood that an outside bidder enters and the assets of the bankrupt firm are redeployed.     

A symposium on Understanding Society,the UK Household Longitudinal Study: introduction

Understanding Society, the UK Household Longitudinal Study began in 2009, and built on and incorporated its predecessor the British Household Panel Survey. It is the largest survey of its kind in the world and provides rich opportunities for economic research and policy analysis. In this introduction to a symposium on Understanding Society, we review the main features of the study, how it is conducted, and evidence on data quality. We also discuss past and potential uses in economic research.     

Hamilton and the U.S. Financial Revolution

In these excerpts from their recently published collection of Alexander Hamilton's writings on “Finance, Credit, and Debt,” the authors provide an overview of “the neatest, quickest financial revolution in history”—the one that took place in the United States during the six‐year tenure of its first Treasury Secretary. Between Hamilton's appointment by Washington in September 1789 and his resignation in February 1795, and as foreshadowed in letters that Hamilton was writing as early as 1780 (as a 23‐year‐old colonel in the Revolutionary army), the new nation saw the emergence of virtually all of what the authors identify as the six key components of modern financial systems. The financial revolution that produced the American financial system was accomplished through the following six developments:

1. The establishment of effective institutions of public finance, including a well‐functioning Treasury debt market, that would enable the government to fund its operations, to restructure its then massive unpaid debts (much of it owed to foreigners), and, perhaps most important, to establish the public credit that would enable it to borrow ever larger amounts on favorable terms.
2. The founding, in 1791, of a central bank to aid and oversee the government's finances and serve as the main supervisor and coordinator of the country's emergent banking and financial systems. By 1795, the Bank of the United States had five offices in different states and thus the beginnings of a national branch banking system.
3. The creation, in 1791, of the U.S. dollar as the country's first national currency. With gold and silver as the monetary base into which bank notes and deposits were convertible, the dollar was endowed with the stability of value that would make it a sound basis for long‐term contracts (such as bonds) as well as a safe asset in which to hold savings. By 1795, all the states, which had earlier issued their own notes and currency, had become members of the national currency union.
4. The development of a private banking system by encouraging state governments to charter banks to support their own finances and lend to businesses and individual entrepreneurs. By 1795, the three state‐chartered U.S. banks that existed in 1789 had become 20, providing the beginnings, with the five offices of the central bank, of what would become a vibrant (if crisis‐prone) American banking system.
5. The establishment of securities markets designed to make financial assets—both government and private‐sector bonds, and equities (including stock in the Bank of the United States)—liquid and transferrable. By 1795, Philadelphia, New York, and Boston all had established organized exchanges for trading national as well as local bonds and, in some cases, stocks.
6. The growth of business corporations, financial (such as banks and insurance companies) as well as industrial (utilities, manufacturers, and road, bridge, and canal companies), thereby encouraging the pooling of individuals’ capital that would allow the creation of larger enterprises that could realize economies of scale.

Thanks to these six developments, the United States was transformed from a bankrupt and severely divided nation in 1789 with huge debts to overseas creditors to a country whose government in 1795 produced a large budget surplus and whose securities were viewed by foreigners as among the most creditworthy in the world. And that was important since, as Hamilton clearly foresaw from the start, the U.S. government would have to rely heavily on overseas capital to fund its operations.     

Perpetuating Puffery: An Analysis of the Composition of OMB's Reported Benefits of Regulation

The Office of Management and Budget reports that the benefits of regulations issued over the last decade exceed the costs by an order of magnitude. But how accurate are those estimates? Over 80 percent of total reported regulatory benefits derive from three sources: (1) reductions of fine particles in the air as a direct result of regulation, (2) the co-benefits achieved from ancillary reductions in these particles as an indirect result of regulation, and (3) private savings for which agencies have offered no market failure explanation. This article critically examines the approaches and assumptions behind these estimates, and suggests that the reported benefits should be viewed with some skepticism.     

Linking Processes and Dynamic Capabilities of International SMEs: The Mediating Effect of International Entrepreneurial Orientation

Previous research on the internationalization of small and medium‐sized enterprises (SMEs) has highlighted the role of knowledge and learning about foreign markets. However, empirical results on the performance implications of foreign market scanning and planning have been mixed. Following the dynamic capability perspective, we argue that SMEs can capitalize on scanning and planning processes because of their international entrepreneurial orientation. We test our hypotheses with a sample of 604 established SMEs and find that entrepreneurial orientation completely mediates the relationship between scanning and planning and international performance. Moreover, the results implicate a bidirectional relationship between processes and international entrepreneurial orientation.     

The Underlying Mechanisms of Multiscreening Effects

Multiscreening, a relatively new form of media multitasking in which people use multiple screens simultaneously, has implications for the effects of persuasive messages due to limited cognitive capacities of people and concurrent modalities of the screens (i.e., both visual). The aim of the study is to examine underlying mechanisms (i.e., recognition, counterarguing, and enjoyment) of the effect of multiscreening on evaluative outcomes (i.e., brand attitude, message attitude, and purchase intention). The experiment (N = 182) showed that both recognition and counterarguing are underlying mechanisms of the effect of multiscreening on evaluative outcomes. Multiscreening has a negative effect on evaluative outcomes by recognition and a positive effect on evaluative outcomes by counterarguing.     

Use values and exchange values in Marx’s extended reproduction schemes

Abstract

Marx-Engels’ numerical illustrations of the extended reproduction suggest that a two-sector economy reaches a balanced growth path, from the second period onwards. We explain this surprising result and show that for technical reasons, disproportions between sectors can prevent the system from reproducing itself. But, in Marx’s reproduction schemes, such a crisis is not only due to purely technical factors and one must wonder what role is played by the relative price in the reproduction of the system. The answer is given by comparing two models having a similar structure but quite different rules for the determination of the relative price. In Marx’s model, the price is given by the labour values and thus, it is exogenously fixed. We contrast Marx’s analysis with an endogenous price model in which the price depends on the conditions of the accumulation of capital. The Appendices point out the complete accordance of Engels’ corrections with Marx’s model and Marx’s unfruitful quest for a balanced growth path as a tool for the analysis of crises.     

Consumer Awareness of Palm Oil as an Ingredient in Food and Non-Food Products

Vegetable oil crop production has increased faster than other food or industrial crops in recent years. Palm oil which is widely grown in tropical areas has become the most internationally produced and traded oil with a detrimental effect on the natural environment and the sustainability of producing communities. The general perception of the industry conveys a negative image to consumers. To better understand the extent consumers’ perception of palm oil products would inform stakeholders in the sector 25 one-to-one interviews using the means-end laddering technique (Olson and Reynolds, 2001) were carried out to elicit attributes which led to the establishing of value perceptions of products containing palm oil. Pal production practices have elicited negative Environmental Concern Values regarding the availability of resources for future generations. Environmental consciousness seems to be an important attribute marketers should take into account when both developing and promoting products. However, consumers’ perception of palm oil as a product ingredient was regarded as minimal. Palm oil was perceived as being a more natural product whose naturalness could be exploited regarding ‘physical wellbeing’ values leading to helping consumers achieve a health life and higher self-stem.