A replication note on unemployment in the OECD since the 1960s: what do we know?

Nickell et al. (Econ J 115(500):1–27, 2005) argue that unemployment rates cointegrate with labour market institutions in a panel of OECD countries. This paper replicates their Maddala–Wu panel cointegration test and shows that this test is only valid when (i) the number of countries tends to infinity and (ii) the underlying country-specific cointegration tests are independent. Their finding of cointegration does not survive when small sample properties and heterogeneous cross-sectional dependencies are taken into account. We acknowledge financial support from the Interuniversity Attraction Poles Program, Belgian Science Policy, contract no. P5/21. The usual disclaimer applies.     

Back to basics: 5 ways to pick low-hanging fruit

Five areas of potential cost reduction related to labor and the supply chain are: Overtime actual to budget biweekly analysis, Overtime actual trend (to budget) analysis, Overtime actual total individual employee costs Actual monthly supply chain expenses compared with budget by chart of accounts code and detail analysis, Actual monthly analysis by individual vendor and detail analysis.     

Strategic decisions in turbulent times: Lessons from the energy industry

Most of the firms currently in the S&P 500 probably will not be there in 15 years. In times of great uncertainty, managers are called upon to make the right strategic choices, preserve core businesses, and prepare their organizations for the future. How can managers make these choices when the industry is under transformation? In this article, we explore how the popular VUCA framework can help to make sense of turbulent contexts and drive the decision making of managers. We study the case of the energy industry, in which traditional business models eroded quickly and dominant players lost their positions. Based on personal interviews with the CEOs of RWE (Germany) and NRG Energy (U.S.), we analyze how these executives led transformation of their organizations. We get immersed in their decision-making processes and depict how the VUCA framework helps them to identify, map, and prepare their organizations to respond to the volatility, uncertainty, complexity, and ambiguity in their industry. We propose a guide for executive managers to navigate through VUCA contexts, taking into account the necessity to introduce short- and long-term responses that prepare organizations and stakeholders for an uncertain future.     

Do regional payroll tax reductions boost employment?

Using a Difference-in-Differences approach, we evaluate the effects of a 10 percentage point reduction in the payroll tax introduced in 2002 in northern Sweden. We find no employment effects among firms existing both before and after the reform, whereas the average wage bill per employee increases by about 0.25% per percentage point reduction in the tax rate. Extending the analysis to include entry and exit of firms, we find evidence of positive effects on the number of firms and a tendency to positive employment effects. Moreover, the wage incidence estimates become insignificant when we account for entry and exit of firms.     

Abusive work practices and bullying among chefs: A review of the literature

Discussion in the media suggests that bullying and abuse are rife in commercial kitchens. This paper analyses the issue of abusive work practices among chefs through a review of the literature; it examines the possible causes of bullying and abusive behaviour in the industry and argues that personal characteristics, culture and socialisation, and the transient nature of the industry, may offer some explanations as to why abusive behaviour is tolerated.Evidence from the literature suggests that abuse may be an expected part of the culture of a commercial kitchen; this is supported by both historical and social structures including education and training systems.In conclusion, research into abusive behaviour among chefs has been limited and further research into its true extent, and how it becomes tolerated, would be useful.     

Can smallholder farmers adapt to climate variability,and how effective are policy interventions? Agent‐based simulation results for Ethiopia

Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub‐Saharan Africa. This study applies stochastic bioeconomic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses the agent‐based simulation package Mathematical Programming‐based Multi‐Agent Systems (MPMAS) to capture nonseparable production and consumption decisions at household level, considering livestock and eucalyptus sales for consumption smoothing, as well as farmer responses to policy interventions. We find the promotion of new maize and wheat varieties to be an effective adaptation option, on average, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policy makers to adhere to interventions that are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.     

Bayesian estimation of manufacturing effects in a fuel economy model

The analysis of fuel economy data results in estimates of the technology utilization by manufacturer and vehicle line. The analysis employs a hierarchical Bayesian regression model with random components representing vehicle lines and manufacturers. The model includes predictor variables which describe vehicle features, such as type of transmission, and vehicle line specific measurements, such as compression ratio. Non-informative priors with novel modifications are used and the Bayes estimates are obtained by use of Gibbs sampling. The results show there is substantial variability among manufacturers in efficiently utilizing technology for fuel economy.     

Linkages among Interest Rates in the United States, Germany and Norway

The Johansen multivariate cointegration methodology is used to analyze relationships among short-term and long-term interest rates in the United States, Germany and Norway. A variance decomposition approach is applied to estimate the proportion of each interest rate's forecast error variance attributable to innovations in the other interest rates. Impulse response functions are plotted to illustrate the speed with which interest rate events are transmitted between capital markets. The analyses illustrate that US interest rates have a significant influence on both German and Norwegian interest rates, while the reverse effect is modest. Norway is also strongly exposed to German interest rate movements, which reflects the consequences of a small country linking its currency to the value of European currencies.