Some methods for assessing the need for non-linear models in business cycle analysis

It is often suggested that non-linear models are needed to capture business cycle features. In this paper, we subject this view to some critical analysis. We examine two types of non-linear models designed to capture the bounce-back effect in US expansions. This means that these non-linear models produce an improved explanation of the shape of expansions over that provided by linear models. But this is at the expense of making expansions last much longer than they do in reality. Interestingly, the fitted models seem to be influenced by a single point in 1958 when a large negative growth rate in GDP was followed by good positive growth in the next quarter. This seems to have become embedded as a population characteristic and results in overly long and strong expansions. That feature is likely to be a problem for forecasting if another large negative growth rate was observed.     

The effect of human resource management practices on the job retention of former welfare clients

Why should an employer hire a former welfare client?What human resource management practices can help employers retain former welfare clients? This study addresses these questions against the backdrop of changes in welfare legislation in the United States that have lessened support to welfare clients and their families and emphasized movement into the workplace. We conducted a large‐scale empirical study of the effectiveness of a wide range of HRM practices and found that higher wages, better financial and health benefits, and development opportunities were positively associated with job retention. Unexpectedly, supervisory training had no relationship to retention, and appraising supervisors on providing a supportive and inclusive work environment showed a negative relationship. We provide suggestions to employers for improving the job retention of former welfare recipients along with directions for additional research. © 2006 Wiley Periodicals, Inc.     

A response surface approach to tolerance design

In spite of Taguchi's robust parameter design (Introduction to quality engineering: designing quality into products and processes, 1986, Asian Productivity Organization, Tokiyo), tolerance design is still important at the design stage of products and processes. Taguchi's proposal and related methods for tolerance design, however, do not efficiently use the information that can be obtained from the parameter design experiment. In this paper, we introduce a new method for tolerance design based on the response surface approach to parameter design. It is a flexible method because non-normal distributions of the noise factors and the quality characteristic are allowed. Moreover, it is unnecessary to perform a new physical experiment. Essentially, tolerances of noise factors are maximized, subject to constraints to ensure that the mean value of the quality characteristic remains on target and the fraction nonconforming is below a pre-specified maximum. Some aspects of model uncertainty are discussed and the method is illustrated by means of an example.     

Consequences of the debt crisis

The indebtedness of the developing countries to foreign creditors which has expanded rapidly over the past few years rose by a further 18% last year and by the end of the year had reached the estimated level of $626 billion. The debt servicing for this sum amounted to $131 billion.¹ The rescheduling operations required as a result of the accumulating payment difficulties reached a volume of $40 billion. According to the Mexican Minister of Finance, the restructuring of Mexico's foreign debts alone was the largest multilateral support operation in modern financial history.²     

On the nonexistence of temporary layoff unemployment in Austria

Zusammenfassung In Feldsteins theoretischem Ansatz wird ein exzessives Ausmaß sogenannter temporärer Arbeitslosigkeit aus der Struktur des amerikanischen Arbeitslosenversicherungs-systems erklärt. Trotz Ähnlichkeiten in relevanten Aspekten der österreichischen Arbeitslosenversicherung kann diese Form der Arbeitslosigkeit nicht beobachtet werden. Verschiedene Anreizsysteme auf der Seite sowohl der Arbeitnehmer als auch der Arbeitgeber und eine soziale Präferenz für Vollbeschäftigung scheinen dafü verantwortlich. Es werden auch in Österreich vorhandene Alternativinstitutionen — Kurzarbeit, Umschulungen und Saisonarbeitslosigkeit — diskutiert.

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We are indebted to G. O. Orosel, E. Streissler and G. Clemenz for many helpful comments. Special thanks are due to R. Holzmann for help with the Appendix. We also benefited from discussions with the participants of the seminar.     

Is the USA depriving the rest of the world of capital?

High American interest rates and confident expectations about the future dollar exchange rate have exerted an unprecedented attraction on foreign capital in the past two years. Gross capital inflows into the USA came to as much as $ 89 billion and $ 83 billion in 1982 and 1983 respectively. It is widely held that this is depleting the supply of capital to the rest of the world. Is this view justified?     

Analysis of variance on indirectly measured variables

Abstract  When observations from a normal distribution can only be obtained indirectly by counting the number of subjects responding to a previously chosen dose, parameter estimates can be obtained by using probit analysis. Well-known is the maximum likelihood technique of parameter estimation, less known is the approach by weighted least squares. The latter approach is followed to compare the parameters of several normal distributions by testing their equality, in analogy with the analysis of variance. A practical situation gave rise to this study and it is worked out at the end of the paper.     

Textiles and clothing in the Uruguay Round: Current situation and future perspectives

The success of the entire Uruguay Round of the GATT depends considerably upon the success of the negotiations on the liberalization of world trade in textiles and clothing, since a number of developing countries have made their support for progress in the negotiations on services or safeguards contingent upon progress in this field. What are the present controversies? And what are the chances of resolving them in time?     

Delegation in first‐price all‐pay auctions

In a first‐price all‐pay auction buyers have an incentive to delegate the bidding to agents and to provide these agents with incentives to make bids that differ from the bids the buyers would like to make. Both buyers are better off in this strictly non‐cooperative delegation equilibrium and the delegation contracts are asymmetric, even if the buyers and the auction are perfectly symmetric. Copyright © 2004 John Wiley & Sons, Ltd.