Bank lending to third world countries in the 1980's

The world financial system today faces challenges more serious than any since World War II. International trade in goods declined sharply in 1981 and 1982. Last year was the first year in 40 years that income in many developing countries declined. Unemployment levels around the world are both staggering and frightening. All of these problems are focused neatly into the international debt issue in which countries in the process of development are currently unable to repay principal on their international indebtedness without very great political and financial strain. The LDC debt question is a public policy issue that has exhibited at least nine lives. One should emphasize two self-evident facts: One, we are dealing in this issue with intangibles; the political climate in the developing countries, the mood of the United States Congress and the regulatory authorities in the creditor countries. Secondly, we should frankly admit that there are huge gaps in our knowledge of the facts that make all prediction hazardous. The problem of the LDC debt is severe but not beyond repair. A resolution of the problems of worldwide protectionism, and of unstable interest rates and foreign exchange rates will do much to eliminate the problem. This requires cooperation between national governments, central banks, international organizations and commercial banks. The uncertainty which plagues us can be laid to rest only when some evidence is at hand that the major nations of the western world recognize that this is a global problem and requires global solutions.     

Long-term dependence in common stock returns

The efficient market, martingale model of security price movements requires that the arrival of new information be promptly arbitraged away. A necessary and sufficient condition for the existence of an arbitraged price is that statistical dependence among prices must decrease very rapidly. If persistent statistical dependence is present, the arbitraged price changes do not follow a martingale and should have an infinite variance. Using a technique for detecting long-term dependence, called R/S analysis, 200 daily stock return series are studied; many series are characterized by long-term dependence. Thus, in the presence of long-term dependence, the martingale model does not hold. Also, the distribution of security returns is non-normal stable Paretian as opposed to Gaussian.     

Using Industry-Sponsored Game Nights to Educate About Risk and Insurance

As educators in the field of risk management and insurance, we see know- ledge of risk management and insurance as a core business function. However, some colleagues and students see insurance as cold-call sales or companies with a lot of money that continue to raise their prices. So we have to find ways to make our public aware of the usefulness of risk management and insurance in the business world and in private life and of the opportunities that having such knowledge presents to all business majors and business people. One method that is beginning to show dramatic improvements in at least our students' perceptions of the field and the major involves industry-sponsored game nights. While not an academic endeavor nor strictly risk management education, we believe the idea provides a useful tool for opening students' eyes to the need for knowledge of risk management and insurance and of the opportunities that are available in the insurance industry and its related fields. This article discusses the history of such an event at Appalachian State Univer- sity, the current status of the North Carolina Surplus Lines Association (NCSLA) event, and the benefits of the event.     

The Union Makes Us Strong? A Study of the Dynamics of Workplace Union Leadership at Two UK Manufacturing Plants

This paper draws on qualitative case study evidence to investigate the way in which union leaders involved in two workplace organizations deal with the process of managing their role within the employment relationship. In particular, the influence of their leadership style on the commitment and participation of rank-and-file members is considered. The paper highlights the dialectical relationship between local leaders and members in terms of trade union democracy and local leadership style.     

Residential location and the earnings of African American women

In comparing the earnings of African American women to three reference groups—white women, African American men, and white men—three principal findings emerge. First, African American women residing in the suburbs are worse off than any other suburban group. Second, central city African American women are worse off than any other group of central city residents. Third, while central city residence imposes a statistically significant earnings penalty on men of both races, no such penalty is found for African American or white women. Therefore, African American women will enjoy no earnings advantage if they move to the suburbs. This finding underscores the importance of including women in studies of residential location and the socioeconomic status of African Americans. A narrow focus on male data to inform policy is clearly insufficient.     

Do competing specialists and preferencing dealers affect market quality?

We empirically demonstrate that the opportunities the BostonStock Exchange and the Cincinnati Stock Exchange offer membersto take the other side of their customers' orders through affiliatedmarket makers (to internalize orders) have little short-runeffect on posted or effective bid-ask spreads. This is truedespite substantial movement of order flow away from the NewYork Stock Exchange when trading under one of these regionalstock exchange programs begins. These results contrast withthe adverse effects of market fragmentation and internalizationpredicted by some theoretical market microstructure analysesand the popular financial press.     

Immigration and Informal Labor

We develop state‐level proxies for informal employment using differences between measures of self‐reported employment and officially sanctioned employment. In construction and landscaping, industries associated with under‐the‐table labor, we develop proxies for informal work based on productivity per officially sanctioned worker. We relate each set of proxies for informal employment to changes in immigrant population and composition. We find some evidence that immigration is associated with informal employment generally and in the construction industry when prevailing wages are low. States with high concentrations of low‐skilled male immigrants have higher levels of informal employment in the landscaping industry.     

Symposium Overview

Journal of Productivity Analysis -     

Efficiency Measurement in Network Industries: Application to the Swiss Railway Companies

The persistence of increasingly high government subsidies in Switzerland’s railroads has led the federal and cantonal authorities to discussing the possibility of high-powered incentive contracts such as those based on cost efficiency benchmarking. Railways are however, characterized by a high degree of unobserved heterogeneity that could bias the efficiency estimates. This paper examines the performance of several panel data models to measure cost efficiency in network industries. The unobserved firm-specific effects and the resulting biases are studied through a comparative study of several stochastic frontier models, applied to a panel of 50 railway companies operating over a 13-year period.* The authors wish to thank Michael Crew and two anonymous referees for their helpful suggestions. Aurelio Fetz provided an excellent assistance, which is gratefully acknowledged. Any remaining errors are the responsibility of the authors.This revised version was published in June 2005 with corrections in the author affiliations.