Persistence and Change at the Top of the IT Sector

We use the DATAMATION index of the top 50 domestic IT companies (1975–1995) to track persistence and change at the top of the sector. The trends that we uncover are increasing instability, rejuvenation (declining average age of entrants coupled with increasing average age of quitters), democratization (diminishing revenue inequality at the top) and growing supply‐side intertwining of sub‐sectors and industries within IT due to diversification by long‐term survivors.     

Quasitransitive social preference: why some very large coalitions have very little power

Summary. If only the strict part of social preference is required to be transitive then Independence of Irrelevant Alternatives implies that there is a coalition containing all but one individual that cannot force x to be socially ranked above y for at least half of the pairs of alternatives (x,y). Received: August 29, 1996; revised version: March 24, 1997     

Hunting the Whale: More Evidence on State Government Leviathans

Caplan holds that governments are Leviathans, seeking to extend their power by increasing government expenditures beyond the level preferred by voters. We extend Caplan's model by examining the real (percentage) growth rates of government. We also examine whether government size increases at an increasing rate as the minority party weakens. We find evidence that supports and fails to support the original Leviathan hypothesis. We also fail to support our extensions of Caplan's hypothesis. Furthermore, our significant and contrary results have intuitively appealing interpretations. From these results, we conclude that the impact of political party power on government spending is ambiguous.     

Monetary and fiscal policy interactions in a New Keynesian model with capital accumulation and non-Ricardian consumers

The paper examines simple monetary and fiscal policy rules consistent with determinate equilibrium dynamics in the absence of Ricardian equivalence. Under this assumption, government debt turns into a relevant state variable which needs to be accounted for in the analysis of equilibrium dynamics. The key analytical finding is that without explicit reference to the level of government debt it is not possible to infer how strongly the monetary and fiscal instruments should be used to ensure determinate equilibrium dynamics. Specifically, we identify bifurcations associated with threshold values of steady-state debt, leading to qualitative changes in the local determinacy requirements.     

Sociality and money1

This is a translation of ‘Socialité et argent’, a text by Emmanuel Levinas originally published in 1987. Levinas describes the emergence of money out of interhuman relations of exchange and the social relations – sociality – that result. While elsewhere he has presented sociality as ‘nonindifference to alterity’ it appears here as ‘proximity of the stranger’ and points to the tension between an economic system based on money and the basic human disposition to respond to the face of the other person. Money both encodes and effaces sociality, both designates and disguises social relations. It arises from the way that needs and interests are manifested in exchange relations, in what he calls the ‘interestedness’ of economic life. But interests are always already cut through by the fact that being is always ‘being with others’. Being is always ‘interbeing’. Interestedness is always confronted by disinterestedness, that is, by a sociality marked by the ‘goodness of giving’, attachment to and concern for the poverty of the other person. Levinas concludes with a discussion of sociality and justice, posing questions about the tension between the demand to respond to an Other immediately before me and at the same time to respond to the demands of an other Other (the third person) who also invites a response.     

The Fair Value of Cash Flow Hedges,Future Profitability,and Stock Returns

The SEC and FASB recently expressed concerns that investors do not fully assimilate all of the information provided by complex and incomplete derivatives and other comprehensive income (OCI) disclosures. My evidence supports these concerns. Specifically, I examine the information content of unrealized cash flow hedge gains/losses for future profitability and stock returns. An unrealized gain on a cash flow hedge suggests that the price of the underlying hedged item (i.e., commodity price, foreign currency exchange rate, or interest rate) moved in a direction that will impair the firm's profits after the hedge expires. Consequently, I find that unrealized cash flow hedge gains/losses are negatively associated with future gross profit after the firm's existing hedges have expired. This association only holds after the firm has reclassified its hedges into earnings, and is weaker for firms that can pass input price changes on to their customers. Finally, investors do not immediately price the cash flow hedge information. Instead, investors appear surprised by future realizations of gross margin, consistent with the view that complex and incomplete disclosures delay pricing. These results are relevant to policymakers involved in the current FASB and IASB project designed to simplify the accounting and disclosure for derivatives and, in particular, cash flow hedges.     

Marx and Engels’ Vision of a Better Society

Notwithstanding their much noted aversion to detailing the nature of a post-capitalist society, Marx and Engels indeed have a broad vision of such a better society that both runs through and informs their entire lives' work. It is rooted in their concepts of the inherently social nature of humans and potential authentic human development in accord with human nature, and the negation by humans as the active agents of history of the barriers posed to that development. This paper discuses their dialectic approach to defining a better society, their concept of human nature that it rests on, and finally specifies a number general aspects they give for a better future socialist society.     

Informal Caregiving and the Retirement Decision

The probability of providing informal care grows with one's own age. While labor market effects due to caregiving are moderate, they could be concentrated in the years close to retirement. Therefore, I investigate whether care in the previous year leads to retirement in the year after by using German Socio‐Economic Panel data from 2001 to 2009 and discrete‐time hazard models. The effect of care on the retirement decision is indeed much higher than its effect on the labor or working hours of middle‐aged individuals. Women are affected to a larger extent but the retirement decision of men also reacts to their caregiving obligations.     

Informal home care and labor-force participation of household members

In Germany, informal home care is preferred to professional care services in the public discussion as well as in legal care regulations. However, only minor importance is ascribed to the opportunity costs caregivers face. Therefore, this article explores the influence home care has on the labor supply of caregivers who cohabitate with the care recipient. I use data from the German Socio-Economic Panel from 2001 to 2007, which allows researchers to merge the characteristics of both groups for the first time. Owing to diverging gender roles, I examine female and male caregivers separately. The results show that having an individual in need of care in the household does not decrease labor supply to an economically relevant quantity. As providing care might be endogenous to the labor-supply decision, I test for endogeneity by using characteristics of care recipients as instruments and I additionally test for sample attrition. Moreover, the panel structure allows me to control for unobserved heterogeneity.