SOCIAL CONFLICT,GROWTH AND FACTOR SHARES

Standard growth theory is based on atomistic agents with no strategic interactions among them. In contrast, we model growth as resulting from a one‐off, strategic game between ‘workers’ and owners of capital (‘capitalists’) on factor shares, in an otherwise standard ‘AK’ growth model. The resulting distribution of income between factors further determines the marginal revenue product of capital and the rate of growth. We analyse the properties of four equilibria: competitive, Stackelberg equilibrium, a hybrid non‐cooperative regime and cooperative, in terms of labour shares, growth and welfare. Our model thus endogenizes key aspects of the ‘social contract’.     

'New security' risks and public educating: the significance of recent evolutionary brain science

The response to 'new security' risks requires significant changes in public behaviour, and the legitimization of unpopular government policies. Public Educating (public information/public education) is one means to achieve this. The need is reflected in initiatives such as environmental education, development education, health promotion, and the Public Understanding of Science. Current strategies are often based on commercial advertising, but mass communications theory does not directly encompass influencing perception , which is necessary to create awareness of the new 'invisible' risks. Recent evolutionary brain science is providing fresh and relevant insights into our species perception deficits, which can inform a more effective approach to Public Educating. This paper first places risk within the context of the post-Cold War 'global security' agenda. It proposes a theoretical framework - 'brain lag' - to explain perceptual deficits in relation to this agenda, which draws on theories of information, adaptation and denial, and an understanding of the human senses including time-scale-latency. Fundamental areas of evolutionary perception are proposed which are relevant across the agenda: fear and disgust, number perception, and cheating. This leads to a core concept for Public Educating about new security risks, 'enhanced difference', and a set of hypotheses that can be applied to text or image.     

Contingent Capital vs. Contingent Reverse Convertibles for Banks and Insurance Companies

During the credit and liquidity crisis in 2007 and 2008, banks found themselves largely unable to raise significant new equity quickly from parties other than sovereign wealth funds and governments. Some banks have thus recently begun to consider contingent capital as a means of pre‐arranging recapitalizations for future crises. Contingent capital is a type of put option that entitles a company to issue new securities on pre‐negotiated terms, often following the occurrence of one or more risk‐based triggering events. This article compares the economic merits of a new security—a “contingent reverse convertible” or CRC—against more traditional forms of contingent capital. In November 2009, Lloyds Banking Group plc issued “Enhanced Capital Notes”—subordinated debt that converts into common stock if Lloyds's core regulatory capital falls below 5% of its regulatory risk‐weigh ted assets. This CRC is not strictly speaking a form of contingent capital, but it does give banks the potential to recapitalize themselves quickly in the face of a crisis without having to turn to governments and taxpayers. One important limitation of CRCs is that because they do not generate new cash for a bank at the time of conversion, they are unlikely to stop a liquidity crisis once it has begun. More traditional contingent capital facilities, by contrast, do put cash in the hands of the issuer at the time the facility is drawn. But even for those inclined to use CRCs, it may be unrealistic to expect many other institutions to imitate the structure of the Lloyds offering. Persuading existing investors to take a more subordinated position in a bank's capital structure and write a put option to the bank on its own stock will be neither cheap nor easy. For this reason, the more traditional solutions used to date may have more success with banks, though arriving at a price that helps issuers and satisfies investors will be a challenge for those structures as well.     

Inventory investment & control: How have UK companies been doing?

Since the 1980s UK manufacturers have been exposed to the strong promotion of inventory control and reduction as a component of Just-in-Time (JIT), World Class Manufacturing (WCM) and Supply Chain Management (SCM) supported by a range of Enterprise Resource Planning System (ERPS) software packages. There is evidence that these ideas have found extensive favour in practice although existing research studies have also shown that inventory control and reduction is challenging and its impact on performance appears mixed. However, the questions of whether inventory reduction has been achieved and whether it has been beneficial to corporate performance have not been subject to systematic investigation in the UK setting. This study rectifies this deficiency by providing evidence on inventory and inventory turnover levels and trends in UK manufacturers over the two decades ending in 2005. This is supplemented, by benchmarking UK companies against those of Japan, USA and Germany, by investigating possible factors that can explain variation in inventory levels, and by exploring the association between high standards of inventory control and the financial performance of companies.     

Immigrant earnings returns to post-migration education: Evidence for Canada, 1999–2013

Using the recently created Canadian Employer–Employee Dynamics Database (CEEDD), we analyze the earnings returns to investments in post secondary education by immigrants made after arrival in Canada. Fixed effects estimation results suggest that postsecondary education (PSE) in Canada increases annual earnings of men and women by 21.9% and 32.8%, respectively, for those enrolled full time and by 11.2% and 21.0% for those enrolled part time, respectively. Earnings effects of PSE are larger for immigrants admitted in the skilled worker category relative to family class immigrants and to refugees and are increasing in the level of education of the immigrants at landing. Immigrants from non-traditional source countries generally have larger returns to PSE than immigrants from English-language source countries, such as the US and the countries of Northwestern Europe.     

Financial Outcomes in Adolescence and Early Adulthood in Australian Longitudinal Data

This article describes and catalogues person-specific measures of financial outcomes that are available for adolescents and young adults in three large longitudinal Australian surveys: the Longitudinal Surveys of Australian Youth, the Longitudinal Study of Australian Children, and the Household, Income and Labour Dynamics in Australia Survey. It summarises international research that has been conducted on young people's financial outcomes, illustrating outcomes that have been investigated, research questions that have been asked, and distinctions that have been drawn between adolescents and young adults. It considers the strengths and weaknesses of the three surveys for extending this research into the Australian context.     

Do Short‐Term Observed Income Changes Overstate Structural Economic Mobility?*

The recent empirical literature on household income dynamics in developing countries has tended to find considerable intertemporal economic mobility and thus inferred that a large proportion of poverty is transitory. This article introduces a statistical test which shows that these findings are partially driven by stochastic changes in transitory income. Estimates of total economic mobility are inversely correlated with the panel spell length. For short data spells, estimated total economic mobility is significantly greater than the underlying structural economic mobility because of short‐lived movements across the poverty line that cancel out over periods of multiple years.     

Settling the Score: The Role of Organizational Justice in the Relationship Between Psychological Contract Breach and Anticitizenship Behavior

This study investigated the role of psychological contract breach, procedural justice, and interactional justice in influencing employees' anticitizenship behaviors. It was posited that the association between contract breach and these negative employee outcomes would be moderated by perceptions of both procedural and interactional justice. In particular, employees' anticitizenship behaviors are hypothesized to be higher following a breach when both procedural and interactional justice are low. One hundred and sixty-five employees from a variety of organizational settings completed measures of contract breach, procedural justice, and interactional justice whereas their respective supervisors completed a measure of anticitizenship behavior. Results revealed a 3-way interaction between contract breach, procedural justice, and interactional justice on anticitizenship behavior. The nature of the interaction was further investigated through simple slope analyses. Consistent with the study's propositions, anticitizenship behavior was higher following a contract breach when both procedural and interactional justice were low. Theoretical and practical implications as well as directions for future research are discussed.