Industrial relations and the management of flexibility: factors shaping developments in Spain and the United Kingdom

Any analysis of workforce flexibility within particular countries needs to take account not only of the character of industrial relations and union organization at workplace and company levels, but also of how actions at those levels are influenced by broader regulatory arrangements covering employment and work practices. In other words, to avoid the over-simplifications and over-generalizations which much of the flexibility debate has in the past been (correctly) accused of and to expand the analysis offered by the relatively broad-brush, multi-country studies, it is necessary to locate issues of flexibility more securely within both existing national regulatory and institutional frameworks, and also to take account of patterns of union organization and job regulation at the local level, and the ways unions and workforces have responded to (and at times even shaped) different flexibility initiatives by employers. By analysing different types of enterprise in Spain and the United Kingdom, this article seeks to illustrate the role and significance of these factors for the particular development of workforce flexibility in the two countries.     

Green tax reforms and habits

Using a dynamic general equilibrium model, we explore the role of habit formation when analyzing green tax reforms under the double dividend hypothesis. We assume increases in energy taxes and adjust capital taxation in a revenue-neutral framework to evaluate the effects on welfare. Since the existence of an environmental dividend is uncontroversial, we mainly focus on the efficiency dividend. Our findings show that, when taxes on household energy consumption increase, habits and transitional dynamics alter household decisions, and change the efficiency dividend. However, when the tax increase is on energy used as an input, reform always induces a welfare cost in terms of efficiency. In this case, habits play a less important role.     

Correlation dynamics of global industry portfolios

This paper investigates the time series of realized correlations between global industries and the world market over the 1979–2008 period. The behavior of industry correlations is characterized by long-term swings, with a period of historically low correlations in the late 1990s. The Telecommunications and the Financials industries show a positive secular trend. Global industry correlations move countercyclically. Furthermore, there is evidence that industry correlations are higher for market downside moves than for upside moves.     

TESTING FOR PURCHASING POWER PARITY AND UNCOVERED INTEREST PARITY IN THE PRESENCE OF MONETARY AND EXCHANGE RATE REGIME SHIFTS

Testing for purchasing power parity (PPP) and uncovered interest parity (UIP) has been the focus of many empirically oriented studies. While these simple economic theories of exchange rate and interest rate determination are theoretically attractive, the empirical support for these equilibrium conditions is at best mixed. Many potential reasons have been cited in the literature for the failure of such studies, ranging from market imperfections to inappropriate modelling strategies. The current state‐of‐the‐art procedure involves testing for two cointegrating vectors in a multivariate error correction model which may be economically identified as the PPP and UIP relations. However, such a procedure does not account for policy regime shifts which distort the underlying PPP and UIP relations. In this paper, a Markov‐switching vector error correction model (VECM) is considered for time series data in which monetary and exchange rate regime shifts are known to be present. Weak evidence in favour of PPP and UIP is established in a standard linear VECM, although the residuals of this model indicate that it is inappropriate in terms of functional form. The Markov‐switching VECM, however, provides convincing evidence in favour of both the PPP and UIP relations and a marked improvement in the residual distributions.     

The impacts of congestion on commercial vehicle tour characteristics and costs

Analytical modeling and insights, numerical experiments, and real-world tour data are used to understand the impact of congestion on urban tour characteristics, carriers’ costs, and distance/time traveled. This paper categorizes tours into three classes based on their tour efficiency and variable costs structure. Travel time/distance between customers and depot is found to be a crucial factor that exacerbates the negative impacts of congestion. Travel time variability is a significant factor only when travel time between depot and customers is considerable in relation to the maximum tour duration. For each customer, it is possible to define a dimensionless coefficient that provides an indication of the relative impact of congestion on routing constraints. Congestion also affects carriers’ cost structure, as congestion worsens the relative weight of wages and overtime escalates and the relative weight of distance related costs decrease.     

Adding insult to injury: consumer experiences of being denied credit

To inspire confidence in consumer credit and improve outcomes for consumers, negative experiences such as being denied credit must be handled appropriately. We conducted an online survey with 298 UK citizens who had a credit application denied to gain a better understanding of their experience of being denied credit. We found that privacy issues make this experience more upsetting for consumers than necessary. When being denied credit, respondents are most concerned about (1) being denied credit ‘in public’; and (2) not being informed about the reasons why they are denied. Only 23% of our respondents knew why they had been denied; 116 (62%) believed they had been denied credit because of their credit record, but 28% had never checked it. Out of the 194 respondents who had checked their record, 38 identified errors in their credit reports, and in 14 of these cases (38%) debts that they had paid off were incorrectly listed as outstanding. Based on our findings, we propose several changes to the credit application process: (1) providing sensitive but helpful information in a private manner, e.g. a preview of their credit score before they commit a loan application; (2) credit denial notifications with information on what to do next; and (3) giving applicants more information about checking their credit report and who to contact for correcting errors.     

Competitive product lines with quality constraints

Competing firms often use product lines to screen different types of customers. Examples include, in general markets, product lines that screen the purchasing ability or preference for quality; in credit markets, product lines that screen the risk of the projects with different collateral; in insurance markets, product lines that screen the risk of accident with different coverage; and in labor markets, wage schedules that screen the employees’ abilities with different education levels. In some of these markets there can be some natural quality constraints: a maximum available quality in general markets, no negative collateral in credit markets; coverage not above 100% in insurance markets; minimum education level in labor markets. We present sufficient conditions for the existence of a pure strategies equilibrium (in such markets) under differentiation and a continuous distribution of customer types. We show that the equilibrium exists if there is a sufficiently high degree of differentiation among firms. Furthermore, we show that this equilibrium involves, under certain general conditions, pooling of customer types at the top and at the bottom of the distribution of customer types. The middle types may still be screened by the firms.