Pastoral economics within the framework of a social economy

Eucken, in his paradigm of a functionally competitive social market economy, established the basis for a free market economy which institutionalizes concerns for economic and social justice. The Bishops’ Pastoral (and also the Lay Letter) on the U.S. economy approach the concept of a social and just economy from a Christian moral tradition. A community of interests between these two approaches, as well as Donaldson’s synthesis of Nozick’s and Rawl’s theories of justice, causes a moral-economic dialogue and cross fertilization to emerge. The Bishops postulate that the evolution of a just and fair market economy, as the guarantor of freedom, human dignity, and justice, cannot be left to chance but needs to be consciously guided. Therefore, they emphasize the integration of economic theories and policies with notions of “fairness” and “justice,” advocating a holistic approach in viewing the economic system as an organic whole. This paper shows that the broad economic guidelines, which Bishops suggest, fall within the framework of a functional market economy, i.e., a social market economy. It does not deal with the religious and biblical arguments of the Pastoral Letter.     

The importance of spatial economics for assessing airport competition

This paper explores the relevance of spatial effects on airport competition. Drawing concentric circles of travel distances around it is the most commonly way to define an airport’s catchment area. The characteristics of the catchment area and available substitutes are compared, and assessments of market power made. It is generally recognized that the existence of spatial competition among airports, lies within one market, although sometimes, overlapping circles are examined on the premise that competition lies within these common areas. We look at economic models of spatial competition where there is no overlapping and argue that the stylized facts inferred from economic models of spatial competition have been overlooked. After a short review of airport competition, we introduce economic models for spatial competition and look at the implications of these in the context of airport competition.     

Food Industry Firms' Economic Incentives to Provide Nutritional Information to the Market: European Breakfast Cereals,Snacks, and Soft Drinks Industries

Information asymmetries between producers and consumers exist with respect to nutritional characteristics of foods and beverages. This article aims to analyze firms' methods to supply nutritional information, focusing on 3 specific food industries: breakfast cereals, snacks, and soft drinks. A theoretical model is developed and tested empirically on European firm-level data obtained from company websites. Firms' incentives to provide nutritional information are positively related to their products' healthfulness, to firm size, and to firms' degree of international orientation. These insights may have important implications for the design of regulations to increase efficiency in the supply of nutritional information to consumers.     

The psychological contract in Chinese-African informal labor relations

This qualitative study analyzes Chinese-Ghanaian employment in trade as an example of South-South cross-cultural labor relations. Based on ethnographic fieldwork, employment practices and labor conflicts are discussed with regard to psychological contract and equity. The analysis is guided by a process model of psychological contract that has been adjusted and extended in consideration of the dimensions of foreignness and cross-cultural communication. After briefly introducing the situation in Ghana we elaborate that under conditions of foreignness, employment relations are conflict prone because of contradictory equity expectations of employers and employees. We discuss how Ghanaian employees perceiving their psychological contract as violated attempt to restore equity by means of voice, silence, retreat or destruction and often fail due to lack of mutual cultural understanding between employers and employees. We conclude that exit in contrast to expectations is a viable option for employers rather than employees, but most employment relations, though defective, are perpetuated.     

2001 Lawrence R. Klein Lecture Estimating Distributions of Treatment Effects with an Application to the Returns to Schooling and Measurement of the Effects of Uncertainty on College Choice*

This article uses factor models to identify and estimate the distributions of counterfactuals. We extend LISREL frameworks to a dynamic treatment effect setting, extending matching to account for unobserved conditioning variables. Using these models, we can identify all pairwise and joint treatment effects. We apply these methods to a model of schooling and determine the intrinsic uncertainty facing agents at the time they make their decisions about enrollment in school. We go beyond the “Veil of Ignorance” in evaluating educational policies and determine who benefits and who loses from commonly proposed educational reforms.     

Uncovered interest parity in Central and Eastern Europe: Expectations and structural breaks

This paper examines the empirical validity of the hypothesis of uncovered interest parity (UIP) using data from five Central and Eastern European countries with floating exchange rates for the period 2003 to 2014. The analysis includes forward‐looking as well as static expectations and allows for different types of structural break. The variable depicting the deviation from strict UIP is stationary when expectations are forward looking, suggesting that it is not possible to reject the UIP hypothesis with a constant risk premium. The deviation from strict UIP is however typically not stationary when expectations are static, even when structural breaks are incorporated, leading to the rejection of the UIP hypothesis with a constant risk premium. The results underscore the central role of expectations for the UIP hypothesis.     

A further investigation of unemployment persistence in European transition economies

This paper analyses the dynamics of the unemployment rate in the eight countries from Central and Eastern Europe which joined the EU in 2004. Unit root tests allowing for nonlinearities and structural changes suggest that the unemployment rate is not stationary in most of the sample countries. Tests allowing for fractional integration, however, reveal that shocks are highly persistent, implying a slow rate of convergence to the natural rate of unemployment. The unemployment rate is least persistent in Hungary and Slovenia, more persistent in the Czech Republic, Slovakia and the Baltic States and extremely persistent in Poland. The degree of persistence appears to reflect the different levels of economic and institutional development in the countries and possibly also the role of the government.